MGMT 470: Ch. 7

(4) Types of Particularly Attractive Customers: _________Customers: Return, are already presold, & refer others

loyal

The post tax income the entrepreneur personally seeks from the business

magic number

(5) Stages that shows Industries Move in Predictable Ways: 1. ________ stage 2. ________ stage 3. ________ stage 4. ________ stage 5. ________ stage

introduction, growth, shake-out, maturity, retrenchment

(3) Generic Strategies: A generic strategy that targets a portion of the market, called a segment or niche

focus strategy

(5) Stages that shows Industries Move in Predictable Ways: The third life cycle stage, marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies

maturity stage

Most firms use imitation plus or minus ______ _____ _____ _______.

one degree of similarity

___________ __________: An imitative business that competes locally in the same industry

parallel competition

(4) Types of Particularly Attractive Customers: _________ Customers: Not just loyal, they rave about your product!

passionate

A ________ ________: A graphic display that positions products, services, brands, or companies according to their scores on important strategic dimensions

perceptual map

The amount of profit earned by a business before calculating the amount of income tax owed

profit before taxes

(5) Stages that shows Industries Move in Predictable Ways: An organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival

retrenchment

How profits are made - Evaluate: 1. _______ _______ potential 2. If a ______ is potential 3. How to keep _______ & _______ _______ below average

sales growth, premium, costs & operating expenses

(2) Strategic Decisions about your Market: A characteristic of a market that describes the size of the market - a mass market or a nice market

scale

Whom do you plan to sell to - everyone or targeted markets?

scale

(2) Strategic Decisions about your Market in General you need to make early in the process of going into business: 1. The _______ of the market 2. The _______ of the market

scale, scope

Small business owners' unique selling points (also known as benefits) that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition

value proposition

Marketing focuses on the _________ ________. While strategy focuses on the firm's __________ __________.

value proposition, competitive advantage

If you seek _______, having wealthy customers may be rewarding.

wealth

Changes in competitors, sales, and profits in an industry over time

industry dynamics

The Small Business Strategy Process: - Owner Rewards - Product/Service: Industry, Imitation/Innovation - Markets: Scope & Scope Step #_____: __________ TOOL = _______ _______

1, goals, magic number

The Small Business Strategy Process: - Value Benefits - Cost Benefits Step #_____: __________ TOOL = _______ _______ _______

2, customers & benefits, distinctive competence mapping

(6) Pieces of Information that a Basic (IA) Consists of: 1. _________ number & description 2. ________ ________ over time 3. ________ 4. How ______ are made 5. ________ _______ _______ _______ 6. _______ & sources

NAICS, industry size, profitability, profits, target market competitor concentration, analysis

________ defines how your business operates.

Strategy

(5) Initial Key Goal Decisions: 1. As the owner, what do you ______ out of the business? 2. What is your _______ or ________ idea (& its industry)? 3. For your product/service, how ______ or _______ will you be? 4. _______: Whom do you plan to sell to? 5. _______: Where do you plan to sell?

expect, product, service, innovative, imitative, scale scope

(11) Value Benefits: (pt. 2) 6. ________ 7. ________ 8. ________ 9. ________/________ 10. ________ 11. ________

assurance, place, credit, brand/reputation, belonging, altruism

Characterized as value benefits or cost benefits

benefits

_________ _________ _________: A strategy based on creating a new product or service that has no competitors

blue ocean strategy

A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time

boom

The particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry

competitive advantage

Any other business in the same industry as yours

competitors

Skills all competitors have

core competencies

__________ Strategies: Three widely applicable classic strategies for businesses of all types - differentiation, cost, and focus

generic

A _______: An intended outcome for your business

goal

The _______ = The First Step of Strategic Planning

goal

________ ________ set the stage for the kind of business you will have.

goal decisions

(5) Steps of the Small Business Strategy Process: 1. ______ 2. ______ & _______ 3. _______ _______ & _______ 4. _______ _______ 5. _______ _____-_____ _______

goals, customers & benefits, industry dynamics & analysis, strategy selection, post start-up tactics

(7) Common Entry Wedges: Rule changes by the government can help small firms compete

government rules

Funds left over after deducting the cost of goods sold

gross profit

If you seek _______, having customers you can learn from is best.

growth

(5) Stages that shows Industries Move in Predictable Ways: When the general public becomes involved, it leads to either the growth stage or other firms jump in for the boom

growth stage

An _______ Strategy: The classic small business strategy; An overall strategic approach in which the entrepreneur does more or less what other are already doing

imitative

___________ ___________: Imitation plus one degree of similarity; An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas

incremental innovation

If you have a product/service, you also have a __________.

industry

The general name for the line of product or service being sold, or the firms in that line of business

industry

(11) Supra-Strategies: (pt. 2) 6. _________-___________ 7. __________ 8. __________ __________ or no-frills 9. __________ __________ ____ __________ 10. Tightly __________ __________

single-mindedness, comprehensiveness, bare bones, cutting out the intermediary, managed decentralization

___________ Actions: Competitive responses requiring a major commitment of resources

strategic

How to cope with competitive pressures → Using a combination of: ________ actions & ________ actions

strategic, tactical

The idea and actions that explain how a firm will make its profit

strategy

(7) Common Entry Wedges: Occur when a new product is in demand

supply shortages

____________ Step: Refining your strategies/tactics to maintain a competitive advantage

post-start-up

(4) Types of Particularly Attractive Customers: __________ Customers: Produce greater profits

corporate

(4) Types of Particularly Attractive Customers: 1. _________ Customers 2. _________ Customers 3. _________ Customers 4. _________ Customers

corporate, loyal, local, passionate

___________ Benefits: Ways a firm keeps costs low for the customer

cost

(3) Generic Strategies: A generic strategy aimed at mass market in which a firm offers a combination of cost benefits that appeals to the customer

cost strategy

(11) Supra-Strategies: (pt. 1) 1. __________ 2. _________ 3. _______-________ 4. Serving the ______/______ 5. __________

craftsmanship, customization, super-support, undeserved/interstices, elite

(7) Common Entry Wedges: Occurs when a customer, most often a business, is willing to sign a contract with a small business to ensure a product or service

customer contracting

________ Stage: A life cycle stage in which sales and profits of the firm begin a falling trend

decline

(4) Steps to the Strategic Planning Process: 1. Reviewing & confirming the goals that ______ _____ _____ and knowing your _____ _____ 2. Finding your ______ ______ - plot your customers & the benefits you want to offer against competitors 3. Studying dynamics & trends using _____ ______ 4. Building on the prior three steps to determine the ______ _____ _____ & ______ for the firm

define your firm, magic number, distinctive competence, industry analysis, best strategic direction, strategy

The _________________: The extent to which a product or service is like another

degree of similarity

(3) Generic Strategies: A type of generic strategy aimed at clarifying how one product is unlike another in a mass market

differentiation

(3) Generic Strategies: 1. _________ 2. ________ strategies 3. ________ strategies

differentiation, cost, focus

- How your firm differs - Represent your competitive advantage

distinctive competence

As you decide what benefits to offer, you can use a _______ _________ _______.

distinctive competence map

An opportunity that makes it possible for a new business to gain a foothold in a market

entry wedge

(7) Common Entry Wedges: Occurs because government agencies, government-sponsored commercial contracts, and many big businesses have policies that provide for set-asides or quotas for purchases from small businesses

favored purchasing

(3) Universal Rewards Sought by Entrepreneurs: 1. _________ 2. _______ _______ 3. _______ _______

flexibility, personal growth, personal income

_________ _________ allows an entrepreneur to see how profits are generated, which tells if an industry is growing, stable, or in decline.

industry analysis

_________ _________ (_____): A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends

industry analysis (IA)

Look at the changes in competitors sales and profits - the _______ _______ - to make sure it is a good time to enter into a business

industry dynamics

An _______ Strategy: When they do something very different; An overall strategic approach in which a firm seeks to do something that is very difficult from what others in the industry are doing

innovative

(5) Stages that shows Industries Move in Predictable Ways: The life cycle stage in which the product or service is being invented and initially developed

introduction stage

(4) Types of Particularly Attractive Customers: __________ Customers: (Now less about geographic distance), and more about social relationships

local

(5) Cost Benefits: 1. _______ costs 2. _______ savings 3. _______ savings 4. _______ 5. ________ _______

lower, scale, scope, learning, organizational practices

You need to find your "_________ _________" or how much you want to make

magic number

The business term for the population of customers for your product or service

market

(7) Common Entry Wedges: Occurs when business firms leave a market

market relinquishment

___________: The actions of a business related to promoting and selling products or services

marketing

_______ Market: A customer group that involves large portions of the population

mass

A _______-market is broad, while a _______-market is narrowly defined.

mass, niche

The industry eventually reaches a stable number of firms in the _______ stage before entering the ________ stage.

maturity, decline

The amount of money left after operating expenses are deducted from the business

net profit

(4) Strategic Actions include: 1. Entering ________ ________ 2. New ________ _______ 3. Changing _______ ________ 4. _______/_______

new markets, product introductions, production capacity, mergers/alliances

_______ Market: A narrowly defined segment of the population that is likely to share interests or concerns

niche

After the 4-step Strategic Planning Process, there is a continuing effort called _________ __________.

post-start-up

(4) Tactical Actions include: 1. _______ _______ (or increases) 2. ______/______ enhancements 3. Increased ______ ______ 4. New ______ ______

price cutting, product/service, marketing efforts, distribution channels

______________ / _______________: When a new product or service is introduced; The process of creating new products or services, which results in a previously unseen product or service

pure innovation / blue ocean strategy

(11) Value Benefits: (pt. 1) 1. _______ & ________ 2. ________ & ________ 3. ________ 4. ________ ________ 5. ________

quality & style, delivery & service, technology, shopping ease, personalization

(2) Strategic Decisions about your Market: A characteristic of a market that defines the geographic range covered by the market - from local to global

scope

Where do you plan to sell - locally, regionally, nationally, globally?

scope

(7) Common Entry Wedges: Seeks out customers who are already being serviced by another firm

second sourcing

(5) Stages that shows Industries Move in Predictable Ways: A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry

shake-out stage

All booms come to an end, and there is the ____-____ _________ and many firms close down

shake-out stage

A way to think about the line of distribution of a product from its start as materials outside the target firm, to its handling in the target firm, to its handling by sellers, with placement into the hands of customers

supply chain

(4) Sources of Competition for Any Business: 1. The _______ ________ you face 2. _______ _______ in your industry 3. The potential for __________ ________ 4. The _______ _______ ___ ________

supply chain, existing firms, new entrants, broad threat of substitutes

(7) Common Entry Wedges: 1. ________ _________ 2. _________ _________ 3. _________ _________ 4. _________ _________ 5. _________ _________ 6. _________ _________ 7. _________ _________

supply shortages, unutilized resources, customer contracting, second sourcing, market relinquishment, favored purchasing, government rules

___________ Actions: Competitive responses with low resource requirements

tactical

What is the best way to orient your strategic planning process?

thinking ahead about your customers

The goal of strategy after the start-up = _______________________.

to secure competitive advantage

(7) Common Entry Wedges: Can be a physical resource or a human resource

unutilized resources

___________ Benefits: What a customer senses in the product/service

value