Mgmt 470 Test 2

Kanpur: Pivoting into a new space

- Initially in dealing candies produced by others. As competition increased, could not compete on price as costs were higher and was in crisis. Shifted production to neighboring state to reduce costs. - Diversified by manufacturing glucose biscuits --- viewed as extension of the candy business. - Biscuit and candy business on decline. - Shut down candy business. - Diversified into health biscuits thru a partnership with Pearson Health Drinks. Market response was not good.

Four main costs related to ethical failure

- Level 1 Government Fines & Penalties (get most executive attention) - Level 2 Administrative and audit Legal & Investigative Remedial Education Corrective Actions Government Oversight - Level 3 Customer Defections Loss of Reputation Employee Cynicism Lost of Employee Morale Employee Turnover Government Cynicism Government Regulation

Four generic growth strategies

- Lifestyle or part-time firm - traditional small business - high-performing small business - high-growth venture

PAIT Principle

People Assets Information Time

Perseverance

behavior of continued effort to achieve a goal.

Social capital

characteristics of a business, like trust, consistency, and networks, that help make business operations smooth and efficient

Incubator

community-based organizations designed to help small businesses

Intention

desire to start a business Those 56% of young Americans who think about starting their own business are expressing their intentions

Gazelle

high growth company that is making money

License

legal agreement granting you rights to use a particular piece of intellectual property

Multichannel marketing

use of several different channels to reach your customers; for example, a website, direct mail, and traditional retailing

Bootstrapping

using low-cost or free techniques to minimize your cost of doing business

entrepreneurial ecosystem

A specific configuration of the environment that reflects the components that are most central to developing a strong and active community of start-up businesses

Caveat emptor

Latin expression that means "let the buyer beware," which has been made into a philosophy sometimes used by businesses to put the burden for consumer protection onto the customer

Innovation Driven Economies

nation where the major forces for jobs, revenues, and taxes come from high-value-added production based on new ideas and technologies and from professional services based on higher education - Germany, Republic of Korea, US - entrepreneurship is lowest of the 3 types of economies

Royalty

payment to a licensor based on the number or value of licensed items sold

Conflict of Interest

when people do work for their part-time business while they are at their full-time job, blurring the boundary between them

Kanpur: Competition in unorganized market sector

- 70 units in the unorganized sector - Some set up in backyards of entrepreneurs and operated under unhygienic conditions - Unorganized sector avoided paying taxes while manufacturers had to pay duty of 15% and sales tax seven percent above sales value - Sold unbranded biscuits or under brand names similar to leading brands - Imitated packaging of leading brands

Wildfang: Multifaceted platforms

- Allowed for customer to provide feedback - Set up like a franchise - Differentiated business model, allows more tolerance with pricing - Dual business model - bricks & clicks

Wildfang Core competencies

- Brand building - Content creation - Community engagement (while requiring development of IT platform systems and affiliate management systems)

Wildfang: Customer lifetime value

- Product market fit - creates a sense of need for customers - Value proposition: brand value and selling a sense of belonging, redefining a brand

Wildfang: Targeted customer target segments

- Tomboy premise - Not a fad - Women's clothing is often not functional, simple desire to dress like a man - Created a movement

Unicorn

- high growth company that is NOT making money - The most successful high-growth ventures, those with a valuation of $1 billion or more

Family council

- one way to maximize communication in the succession process

Commission

An amount paid to an employee based on a percentage of the employee's sales

Business-to-business sales transaction

Business-to-business transactions using e-commerce

The BRIE Model is

a proven and handy way to think about the activities necessary to get a business started At a minimum you need to have taken at least one action in each of the BRIE categories to successfully start and grow a business

Goal of feasibility study

assess if the idea can be profitably brought to market

Aggrandizing

attempting to make your business or yourself seem more accomplished or grander than reality

Four elements to start a business: BRIE Model

boundary resources intention exchange

Succession

process of intergenerational transfer of a business

incremental strategy

taking an idea and offering a way to do something slightly better than it is done presently

Universalism

the ethical system stating that all people should uphold certain values that society needs to function

Boundary

- a business name or government registration - a phone or email address dedicated to the business, or a specific location for the firm in a home - commercial space, or even on the Internet

Starting an Entrepreneurial Small Business: Four (4) Key Ideas

1. Believe that you can do this 2. Planning + Action = Success 3. Help Helps 4. Do well. Do good.

Crowdfunding

Funding a business online through the collective involvement of others who provide donations, loans, or investments

Opportunity Recognition Behavior

Searching and capturing new ideas that lead to business opportunities. This process often involves creative thinking that leads to discovery of new and useful ideas

Website conversion rate

The measure of how many visitors to your website (or people who click on your online advertisement) are actually willing to make a commitment to the product or service promoted on the site

Creative destruction

The way that newly created goods, services, or firms can hurt existing goods, services, or firms

Exchange

This refers to moving resources, goods, or service to others in exchange for money or other resources

Poisoning the Well

creating a negative impression among your employers' customers

Business Plan

document designed to detail the major characteristics of a firm—its product or service, its industry, its market, its manner of operating (production, marketing, management), and its financial outcomes on the firm's present and future

critical-point planners

entrepreneurs who develop plans focused on the most important aspect of the business first

Charge-back

fee the service charges you for any of a variety of problems related to the sale—for example, a lost, stolen, or fraudulent card was used, the customer reports nothing was received, the product was not the one promised, or there were problems with the product

Utilitarianism

idea that the goal of society should be to bring about the greatest happiness for the greatest number of people

Licensee

person or firm that is obtaining the rights to use a particular piece of intellectual property

Pilot testing

preliminary run of a business, sales effort, program, or website with the goal of assessing how well the overall approach works and what problems it might have

Causation

second way to think about opportunities and business creation depends on your dreams or ideas about new or not-yet-created products or services

Three classes of ethical standards

- Employees Should Be Dependable Organizational Citizens - Do Not Do Anything That Will Harm the Organization - Be Good to Customers

Code of Ethics

reflect the passions of the founder, the culture of the firm, and three (3) classes of ethical standards

Product-based legitimacy

- customer assurance - experiential supports - customer service - quality standards - environmental friendliness - certifications - testimonials - intellectual property - industry leadership - media product/service visibility

LaRue Hosmer's approach to ethical decision making

- define - generate - implement

The business idea component of the feasibility study

- description of your business - your customer - trends related to the product or service

4 stages of business

- emergence - existence, survival - success - resource maturity

Effectuation model of entrepreneurship

- feel - check - plan - do

Kanpur: Decision making by the CEO and other family members

- regarded as a participative process within the family. They felt free to disagree on issues without disrespect to the fraternal hierarchy. - if APL took over, there would be possible loss of independence in decision making

The difference between a small business and a high-growth venture

- small businesses are usually intended to remain small, generally a size that the owner feels comfortable controlling personally - High-growth ventures start small but are intended to grow rapidly, often requiring a team of partners or managers to handle the growth

Billboard principal

asks whether you'd be comfortable having your decision (with your name, of course) advertised on a billboard for everyone you know to see

7 Measures of quality leadership

- strategic planning - customer and market focus - measurement, analysis and knowledge mgmt - human resource focus - process mgmt - results

Business Cannibalization

- taking business away from your employer - this can come from your taking sales away from your employer or taking working hours away to do your own business

Feasibility Study

- the overall business idea - the product/service - the industry and market - financial projections (profitability) - the plan for future action

Resource

- the product or service to be offered - informational resources on markets and running a business - financial resources - human resources such as your own time to devote to the business or that of others working with you or for you

Episodic Business

A temporary, project-based, or sporadically operating business - pop ups - college student painting houses for a summer

Baldridge Award

Annual award given by the U.S. government to recognize quality achievements of U.S. companies measured by the 7 measures of quality leadership

second-career entrepreneur

Person who begins a business after having left, retired, or resigned from work. Can include veterans of the armed forces and civilians from a broad range of industries

SCAMPER Tool

Substitute Combine Adapt Magnify or Modify Put to other uses Eliminate Rearrange - set of cues that trigger new ideas for your business

Design thinking

customer-focused approach to creating products and services that truly solve customers' problems