Chapter 3: Starting a Small Business
competitive advantage
A benefit that exists when a firm has a product or service that is seen by its target market as better than those of competitors.
fatal flaw
A circumstance or development that alone could render a new business unsuccessful.
differentiation-based strategy
A plan of action designed to provide a product or service with unique attributed that are valued by consumers.
strategy
A plan of action that coordinates the resources and commitments of an organization to achieve superior performance.
focus strategy
A plan of action that isolates an enterprise from competitors and other market forces by targeting a restricted market segment.
cost-based strategy
A plan of action that requires a firm to hold down its costs so that it can compete by charging lower prices and still make a profit.
feasibility analysis
A preliminary assessment of a business idea that gauges whether the venture envisioned is likely to succeed.
SWOT analysis
An assessment that provides a concise overview of a firm's strategic situation.
opportunity recognition
Identification of potential new products or services that may lead to promising businesses.
startups
New business ventures created from scratch.
resources
The basic inputs that a firm uses to conduct its business.
competitive environment
The environment that focuses on the strength, position, and likely moves and countermoves of competitors in an industry.
industry environment
The environment that includes factors that directly impact a given firm and all of its competitors.
intangible resources
Those organizational resources that are invisible and difficult to assess.
tangible resources
Those organizational resources that are visible and easy to measure.
pivot
To refocus or recreate a startup if the initial concept turns out to be flawed.