Entrepreneurship Ch.4

Disadvantages of First Mover Advantage

-high cost -you may get it wrong -have to educate customers on why they need product at all

Tradeoffs of Geographic Expansion

-requires more time/effort -company needs more infrastructure -additional transportation costs

Factors to consider for Geographic Expansion

1) Are customers similar to those in area of existing operation? 2) Vendors: Can you continue to use same vendors? 4) Distribution: Can you continue to use same distribution channels?

2 Ways opportunities are formed

1) Discovered as entrepreneurs seize gaps in knowledge/service 2) Created through innovation

Startup Growth Strategies

1) Franchising 2) Expanding Product Mix 3) Geographic Expansion

Free as a Business Model

1) Free based on multi-sided platforms 2) Freemium 3) Bait and Hook Model

Types of global entrepreneurial firms

1) Gradual Globals 2) Born Global 3) Born-again globals

Building blocks of Business Model Canvas

1) Key Partnerships 2) Key activities 3) Value propositions 4) Customer Relationships 5) Customer Segments 6) Channels 7) Key resources 8) Cost structures 9) Revenue Streams

Lean Startup Canvas

1) Problem 2) Solution 3) Value Proposition 4) Unfair Advantage 5) Customer Segments 6) Key Metrics 7) Channels 8) Cost Structure 9) Revenue Streams

How to Succeed

1) Protect competitive Advantages 2) Learn from others 3) Identify firm's strategy 4) Don't prematurely release product

Submodels of Business Model

1) Revenue Model 2) Cost Model

Marketing Lessons From Candy Crush

1) Scarcity increases desire 2) Free motivates 3) Our brains like easy 4) Candy is likable 5) Rewards keep you going (gamifying) 6) Sense of community

International Expansion Process

1) Technology Transfer 2) Technology Licensing 3) Outsourcing 4) Exporting 5) Foreign Direct Investment 6) Franchising 7) Venture Financing 8) Merger and Acquisition

Business Model Patterns

1) Unbundling 2) Long Tail 3) Multi-sided 4) Free 5) Open

Work Culture Categories

1) Values: beliefs shared by all members 2) Selection: hiring people who fit and reinforce values 3) Structure: flexible, organizational structure that changes as company matures

10x solutions

10x cheaper, faster, better

Merger and Acquisition

Buying overseas firm

Adverse Selection

Difficult for you to confirm the claimed skills of a sales rep/agent

Technology Transfer

Have a partner firm in target country product/distribute your product

Born-Again globals

Moves into international markets only because of a triggering event

Franchising

Replicable business model that brings in new revenues through royalty, franchising and rights fees

Telepresence Systems

Set of technologies that allow people to feel as if they are physically present at a location other than true location

Venture Financing

Venture Capitalist capital allowing firm to go international

Unbundling Model

a model where the business is divided into separate entities, specifically: 1) Customer Relationship 2) Product Innovation 3) Infrastructure

Revenue Model

break down of the sources of revenue that business will generate

COGS

costs of raw materials and direct labour needed to create goods

Moral Hazard

difficult to ensure agent is honouring contract

Gradual Globals

enter international markets in stages

First Mover Advantage

first or early in the market

Geographic Expansion

growth based on assumption that customers should like your product in many different locations

Open Business Model

having a community-based business with open innovation (connecting, building and operating with smart people)

Multi-sided Platforms

model that brings together two or more distinct, interdependent groups of customers and creates facilitating interactions

Born Global

plan to enter international market right from outset

Technology Licensing

secure agent to represent company abroad

Long Tail Business Model

selling few product with high sales and many products with low sales

Cost Model

shows how resources are spent to make money -includes COGS + Operating expenses

Customer Pain Points

unmet wants/needs of current customers within existing markets

Saturation Point

when new expansion within region cannibalizes existing operations