Small business strategies chapter 7

Perceptual Map

A graphic display which positions products, services, brands, or companies according to their scores of important strategic dimensions

Retrenchment

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

Scope

-geographic range covered by the market Local to global

Target Market

-geographic range covered by the market Local to global

Industry Cycle

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

Gross Profit

Fund left over after deducting the cost of goods sold.

Strategy Process

Good strategy leads to greater chances for survival and higher profits for small businesses What makes a strategy good is its fit to the particulars of your business and the resources you can bring to it

Imitative Strategy vs. Innovative Strategy

Imitate others, do what others are already doing seeks to do something that is very different from what others in the industry are doing

Introductory, growth, boom, shake-out, maturity, decline,

Introduction stage the life cycle stage in which the product or service is being invented and initially developed Growth stage An industry life cycle stage in which customer purchases increase at a dramatic rate Boom A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time 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 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. Decline stage Begin a falling trend

Scale

Knowing your market scope helps deciding where to focus sales and advertising efforts

Net Profit

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

Magic Number

The post-tax income the entrepreneur personally seeks from the business

Market

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

Mass Market vs. Niche Market

characteristics of a product or service that the target customer would consider worthwhile value benefit, cost benefit

All 5 Steps

1. prestrategy 2. Customers & benfits 3. Industry dynamics and analysis 4. strategy selection and implement 5. Post start-up strategy