ENTP 250 - Midterm Exam
Imitative strategy
an overall strategic approach where the entrepreneur does more or less what others are already doing
Pains
any sort of problem, annoyance, source of aggravation, shortcoming, or suboptimal situation customers or potentialcustomers face
Core Product
basic description of what a product is
Mass Market
large portions of the population
License
legal agreement ranting you rights to use a particular piece of intellectual property
Niche Market
narrowly defined segment of the population that is likely to share interests or concerns
Gross Margin
net sales revenue minus its cost of goods sold
Causal model of entrepreneurship
one in which you wantto create a particular product or service that does not yet exist. (learn new skills)
Vision statement
a simple 5-10 wordsentence or tagline that expresses the fundamental idea or goal of the firm
Pitch Deck
a slideshow presentation that summarizes a business or more often a business plan
Entrepreneurial Alertness
a special set of observational and thinking skills that help entrepreneurs identify good opportunities (ability to notice things that have been overlooked)
Business model canvas
a way to identify and organize key information on a business and how it achieves its goals (analytical or way to do business)
Total Available Market
all of the people or organizations (in one nation, region, or the world) who might consider a product or service being offered
Value and Cost Benefits
best way to identify desirable benefits is through potential customers
Gains
can be any sort of outcome (a product, service, outcome, or situation) customers or potential customers would like to encounter or be able to depend on
Supra Strategies
classic benefit combinations which are designed to work where there are many small businesses in an industry, along with a few larger firms
Arbatration
dispute resolution process held instead of court cases in which both sides present their case to a legal professional
General (Macro) Environment
external environment made up of sectors of major forces that shape the people and institutions of the task and internal environments (economic sector)
Litigation
formal dispute resolution method that operates using the court system, typically with a lawyer representing each party
RBI screen
"Really Big Idea", a fast technique for making initial assessments (called screens) of prospective business ideasbased on five questions.
Business accelerators
"accelerate" growth of an existing company. goal of an accelerator is to accelerate a start-up from its early stages to being ready to pitch for investment.
Business incubators
"incubate" disruptive ideas with the hope of building out a business model and company.
Elevator pitch
30-second action-oriented description of a business designed to sell the idea of the business to another (Leads with the hook, follows up with purpose of the service, ends with where business is now)
Heterogeneity
A quality of a service in which each time it is provided it will be slightly different from the previous time
Industry analysis
A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends
Cash Flow Statement
A statement of the sources and uses of cash in a business for a specific period of time
Tax Accounting
An accounting approach based on specific accounting requirements set by governmental taxing agencies
The accounting equation
Assets = Liabilities + Owners' Equity
The small business strategy process
Goals, Customers & Benefits, Industry Analysis/Dynamics, Strategy Selection, Post Start-Up Practices.
Liabilities
Legal obligations to give up things of value in the future
Tagline
Memorable catchphrase that captures the key idea of a business, its service, product, or customer (slogan)
Distribution channels
People and firms who connect producers of goods and services with customers
Sources of new business ideas
Personal experience, similar business, chance, family/friends, education, idea sites
Depreciation
Regular and systematic reduction in income that transfers asset value to expense over time
Prestige/Premium Pricing
Setting a price above that of the competition so as toindicate a higher quality or that a product is a status symbol
Skimming
Setting a price at the highest level the market will bear, usually because there is no competition at the time
Odd-even Pricing
Setting a price that ends in the number 5, 7, or 9
Partitioned Pricing
Setting the price for a base item and then charging extra for each additional component
Captive Pricing
Setting the price for an item relatively low and then charging much higher prices for the expendables it uses
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
Assets
Something the business owns that is expected to have economic value in the future
SEO (Search Engine Optimization)
Techniques applied to web pages in order to obtain favorable placement on Internet search page results
Competitive Advantage
The particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry
Price Lining
The practice of setting (usually) three price points: good quality, better quality, best quality
Product Development
The procedure to organize and pursue the creation of new goods or services.
Customer Development
The procedure to organize and pursue the finding, obtaining and keeping of new customers
Due diligence
The process of investigating a business to determine its value
Retained Earnings
The sum of all profits and losses, less all dividends paid since the beginning of the business
Guerrilla marketing
The use of creative and relatively inexpensive ways to reach your customer (flyers, door-knob hangers)
Variable Costs
Those costs that change with each unit produced (raw materials)
Fixed Costs
Those costs that remain constant regardless of quantity of output (rent)
The Generic Strategies
Three widely applicable classic strategies for businesses of all types—differentiation, cost, and focus
Mission statement
a paragraph that describes the firm's goals and competitive advantages (fell out of favor)
Profit & Loss Statement
financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year
Royalty
payment based on the number or value of licensed items sold
Breakeven Point
point at which total costs equal gross revenue
Net Profit
profit after all of its expenses have been deducted from revenues
Scale
size of the market
Managerial Accounting
specifically intended to be used by managers for planning, directing, and controlling a business
Incremental strategy
taking an idea and offering a way to do something better than it is done presently
Focus group
A form of data gathering from a small group led by a moderator
Financial Accounting
A formal, rule-based set of accounting principles and procedures intended for use by outside owners, investors, banks, and regulators
Five Forces Model
A framework that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy. Suppliers, buyers, rivals, alternatives, and new entrants
Tangibility
An item's capability of being touched, seen, tasted, or felt
AIDA
Awareness, Interest, Desire, Action
Strategic Action
Competitive responses requiring a major commitment of resources
Tactical Actions
Competitive responses with low resource requirements
Customer Retention Management (CRM)
Techniques that focus on efforts to promote satisfaction with and interest in the firm
Owner's Equity
The difference between assets and liabilities of a business
The 4 Ps
The four major components of a marketing effort—Product, Price, Promotion, and Placement
Brand Promise
The gains provided (i.e., the benefits) or the help given (i.e., the pains removed) by theproduct or service your firm offers
Business entity concept
concept that a business has an existence separate from that of its owners
Augmented
core product plus features that tend to differentiate it from the competition (brand name)
Value Pricing
customer-focused pricing, meaning companies base their pricing on how much the customer believes a product is worth.
Expenses
decrease in owners' equity caused by consuming your product or service
Distribution methods
direct marketing (selling directly to consumers w/o intermediaries); Direct Sales (directly to customer, vending machine)
Scope
geographic range covered by the market
Perceptual map
graphic display which positions products, services, brands, or companies according to their scores of important strategic dimensions
KPIs (Key Performance Indicators)
helps determine whether the project is on track and progressing as planned.
Promotional Mix
how much of each message conveyance you will use to sell your product as well as your objective in using each one
Feasibility Study
if idea is viable and realistic and are you are aware of internal and external forces that could affect your business
Penetrated Market
the actual number of customers of an operating firm, divided by the size of the target market, which gives a percentage of the market the firm (or product/service) has attained so far.
Total Product
the entire bundle of products, services, and meanings of your offering; includes extras like service, warranty, or delivery, as well as what the product means to the customer
Primary Research
the gathering of new information, using techniques such as interviewing, surveying, and observation.
Industry Life Cycle
the stages of introduction, growth, maturity, and decline that typically occur over the life of an industry
Secondary Research
use of existing information, often from government,commercial, or academic databases and research efforts
Customer job
what a potential customer is trying to do—perform or complete some sort of task, solve some problem, or try to achieve some outcome
Handling a Crisis
1.Admit you're in trouble - quickly 2.Get to the scene as soon as possible 3.Communicate facts you know 4.Have one person serve as the firm's spokesperson 5.Separate crisis management from the everyday management of the firm 6.Deal with the crisis quickly
Legitimacy
9belief that a firm is worthy of consideration or doing business with because of the impressions or opinions of customers, suppliers, investors, or competitors
Negotiation
A form of communication between opposing sides in a conflict in which offers and counteroffers are made and a solution occurs only when both parties agree
Contract manufacturing
An existing firm with the correct manufacturing capabilities makes your product for you
Partnerships
Business organizations in which two or more persons share responsibilities, costs, profits, and losses. Pro: formed easily, shared responsibility Con: unlimited liability & debts
Bundling
Combining two or more products in one unit and pricing it less than if the units were sold separately
Business plan components and audiences
Cover Letter, Title Page, Table of Contents, Executive Summary, The Company, The Industry, The Market, The Organization, The Financials, The Appendixes
Trademark
Distinctive word, slogan, or image that identifies a product and its origin
Single Taxation
Earnings of the business are taxed once with the owners paying the taxes
Double Taxation
Earnings of the business are taxed twice with the business as well as its owners being subject to tax
Copyright
Exclusive right given to the creator of a literary or artistic work to make use of that work
Vicarious (indirect) Liability
Indirect liability or responsibility for the actions of another
Independent Contractor
Persons working to achieve a certain goal without being subjected to substantial controls by another
Piercing The Veil
a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders
Patent
a grant by the U.S. government to an inventor for an idea that is new, useful, and non-obvious, giving the inventor the exclusive right to make, use, or sell his idea (design, utility, and plant patents)
Small Business Ethics
a system of values that people consider in determining whether actions are right or wrong
Pivot
a term describing a change of direction in the thinking of an entrepreneur or a firm, often based on new data or other findings
Achieving Sustainability
identifies or creates and then exploits opportunities to make a profit in a manner that minimizes the depletion of natural resources (green entrepreneurship)
Steve Blank's Get, Keep and Grow funnels
in powerpoint
Revenue
increase in ownersequitycaused by selling your product orservice
Opportunity Recognition
searching and capturing new ideas that lead to business opportunities by creatively thinking to discover new ideas
Market Segmentation
process of dividing the market into groups that have somewhat homogeneous needs for a product or service
Customer Relationship Management (CRM)
process of tracking the customer's different contacts with the firm, andusing this data to help improve sales as well as the customer's experience.
Gross Profit
profits earned after subtracting the costs of producing and distributing its products
Inseparability
quality of a service in which the service being done cannot be disconnected from the provider of the service
Serviceable Available Market
refers to the customers within the geographic reach of a firm
Target market
refers to the group of customers in the area you plan to serve who would be likely to be interested in your product, or those of competitors
Radical innovation strategy
rejecting existing ideas, andpresenting a way to do things differently.
Serviceable Obtainable Market
represents the customers that a firm expects to be interested in its particular productor service, and able to be serviced by the firm.
Marketing Funnel
rule of thumb in marketing that it takes a large number ofpeople to be made aware of your product in order to find a purchaser.
Balance sheet
statement of what a business owns (assets), what it owes to others (liabilities), and how much value the owners have invested in it (equity).
Mediation
the dispute is put to a neutral third party who is not a judge
Social Networking
the entrepreneur's set of relationships and contacts with individuals and institutions (work trust & long-term relationships into business)
Internal Environment
the people and groups within the boundary of a firm, including the owners, managers, employees, and board members of the firm
Task Environment
external environment made up of those components that the firm deals with directly such as customers, suppliers, consultants, media, interest groups.
Perishability
service exhibits perishability in that if it is not used when offered, it cannot be saved for later use
Sole Proprietorships
businesses owned and operated by one individual; most common form of business organization in the United States Pro: secrecy, tax advantages Con: limited capital, unlimited liability
Corporations
businesses that are owned by many investors who buy shares of stock Pro: shield the owners from personal liability and company debt Con: impersonal, owners only interested in profit
Employees
the people who make the products and provide the services that allow a firm to exist
Environmental Scanning
the process of continually acquiring information on events occurring outside the company to identify and interpret potential trends