7. Small Business Strategies

Imitative Strategy

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

Market

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

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 stage

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

Retrenchment

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

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.

Industry Cycle

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

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 stage

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

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.

Scope

geographic range covered by the market Local to Global

Mass Market

large portions of the population

Niche Market

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

Strategy Process

prestrategy customer and benefits industry dynamics and Analysis Post start up strategy

Scale

size of the market