Small Business Management

boom

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

service

activities undertaken on a customers behalf

blue ocean strategy

blue ocean strategy A strategy based on creating a new product or service that has no competitors.

competitive advantage

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

competitor

competitor Any other business in the same industry as yours.

core competency

core competency The main work of a firm in a particular line of business.

cost strategy

cost strategy A generic strategy aimed at mass markets in which a firm offers a combination of cost benefits that appeals to the customer.

decline stage

decline stage A life cycle stage in which sales and profits of the firm begin a falling trend.

degree of similarity

degree of similarity The extent to which a product or service is like another.

differentiation strategy

differentiation strategy A type of generic strategy aimed at clarifying how one product is unlike another in a mass market.

industry

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

industry analysis

industry analysis (IA) A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends.

introduction stage

introduction stage The life cycle stage in which the product or service is being invented and initially developed.

Local customers

keep tabs on satisfaction and stay in touch with customers more easily.

maturity stage

maturity stage 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.

industry analysis

study dynamics and trends of your industry.

imitative strategy

imitative strategy An overall strategic approach in which the entrepreneur does more or less what others are already doing.

incremental innovation

incremental innovation An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas.

industry dynamics

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

innovative strategy

innovative strategy An overall strategic approach in which a firm seeks to do something that is very different from what others in the industry are doing.

distinct competency map

distinctive competence map A graphic display that compares your company's product or service to that of your competitors, in order to identify your core (shared) competencies and those unique to you and to your competitor.

entry wedge

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

Magic number

first step in 4 step process of strategic planning

focus strategy

focus strategy A generic strategy that targets a portion of the market, called a segment or niche

generic strategies

generic strategies Three widely applicable classic strategies for businesses of all types—differentiation, cost, and focus.

Goal

goal An intended outcome for your business.

gross profit

gross profit Funds left over after deducting the cost of goods sold.

Passionate Customers

loyal and will rave about your product.

magic number

magic number The posttax income the entrepreneur personally seeks from the business.

market

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

mass market

mass market A customer group that involves large portions of the population.

post start up

refine firms strategy and tactics to maintain competitive advantage.

Corporate customers

retain sales, selling to other businesses to produce greater profits.

retrenchment

retrenchment An organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival.

Loyal Customers

return customers and already presold making your life easier.

scale

scale A characteristic of a market that describes the size of the market—a mass market or a niche market.

scope

scope A characteristic of a market that defines the geographic range covered by the market—from local to global.

shake out

shake-out A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry.

product

something physical a customer buys

strategy actions

strategic actions Competitive responses requiring a major commitment of resources.

value proposition

value proposition 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.

Destinctive Competence

what benefits you offer and how they are better than competitors

supply chain

suppy chain 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.

tactical actions

tactical actions Competitive responses with low resource requirements.

distinctive competence

distinctive competence Those features, benefits, or aspect of your business that are unique to your firm, or more strongly identified with your firm than with your competitors. This is the specialty for which your firm is best known.

growth stage

growth stage An industry life cycle stage in which customer purchases increase at a dramatic rate.

Strategy

ideas and actions that explain how a firm will make its money.

marketing

marketing The actions of a business related to promoting and selling products or services.

niche market

niche market A narrowly defined segment of the population that is likely to share interests or concerns.

parallel competition

parallel competition An imitative business that competes locally with others in the same industry.

profit before taxes

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

pure innovation

pure innovation The process of creating new products or services, which results in a previously unseen product or service.