7. Small Business Strategies Entrepreneurship

Perceptual Map

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

Decline

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

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

Growth

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

Magic Number

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

Maturity

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

Strategy Process

the ideas and actions that explain how a firm will make its profit

Target Market

way to know which competitors to worry about most

(5 steps)

1. As owner, what do you expect out of the business? 2. What is your product or service idea (and its industry)? 3. For your product or service, how innovative or imitative will you be? 4. Who do you plan to sell to—everyone or targeted markets? 5. Where do you plan to sell—locally, regionally, nationally, globally?

Scope

1. Knowing your market scope helps deciding where to focus sales and advertising efforts Stitch Fix & Pinterest 2. Knowing your target market

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

Imitative Strategy

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

Gross Profit

Funds left over after deducting the cost of goods sold

Net Profit

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

Introductory

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

Market

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

Mass Market

large portions of the population

Niche Market

narrowly defined segment of the population that is likely to share interests or concerns

Retrenchment

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

Scale

size of the market