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