Chapter 7-ENTR-202-Small Business Strategies: Imitation with a Twist

Gross profit

______ is what is left after deducting the cost of goods sold.

The scale is a

characteristic of a market that describes the market's size.

A(n) ______ is any other business in the same industry as your business.

competitor

A ______ is the business term for the population of customers for the business' product or service.

market

A business' supply chain is a

way to think about the line of distribution of a product from its start as raw materials to the finished goods into the hands of customers.

______ is the actions of a business related to promoting and selling products or services.

Marketing

Which of the following statements describe the shake-out stage of the industry life cycle? (Check all that apply.)

It ends when the rapid die-off of firms comes to an end. It comes after the boom stage. It is the industry life cycle that is characterized by a decrease in the number of firms in an industry.

Which of the following statements about a company's value proposition are correct? (Check all that apply.)

It focuses on delivering unique value to customers. It includes benefits that differentiate a business' offering from those of its competition. It is a business' unique selling points that customer can expect from its goods and services.

A mass market is

a customer group that involves large portions of the population.

A competitor is

any other business in the same industry.

The ______ of the industry life cycle is when the product or service is being invented and initially developed.

introduction

Core comptency

refer to the skills that an organization and all its competitors have. (Enter one word in each blank.)

Net profit

______ is the money left after operating expenses are deducted from a business.

The ______ stage of the industry life cycle is the third stage, which is marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies.

maturity

Industry dynamics

are changes in competitors, sales, and profits in an industry over time.

True or false: Net profit is the amount of money left over after deducting the cost of goods sold.

False

True or false: To shine in any industry, a firm must avoid meeting the core competencies of its competitors and thus refrain from offering something distinctive that it may do well.

False

Which of the following are true statements in the context of strategy in the small business? (Check all that apply.)

A strategy may be thought of as a blueprint for planning or a standard for comparison of actions. A good strategy results in increased survival chances and more profits for a small business.

______ is the extent to which a product or service is like another.

Degree of similarity

______ strategies are three widely applicable classic strategies for businesses of all types-differentiation, cost, and focus.

Generic

______ is an overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas.

Incremental innovation

______ is the general name for the line of product or service being sold or the firms in that line of business.

Industry

Which of the following statements about a boom are correct? (Check all that apply.)

Original firm(s) are unable to keep up with consumer demand. It is a type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time. This happens when a product or service is extremely popular or "hot".

_____ refers to the notions and actions that explain the profit-making means of a firm.

Strategy

Select the description that defines the term market.

The business term for the population of customers for the business' product or service.

Parallel competition is

an imitative business that competes locally with others in the same industry.

A _____ is a type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time.

boom

A ______ strategy is a type of generic strategy aimed at clarifying how one product is unlike another in a mass market.

differentiation

The ___ strategy is one of three generic strategies that is aimed at clarifying how one product is unlike another in a mass market.

differentiation strategy

An overall strategic approach in which an entrepreneur does more or less what others are already doing is called a(n) ______ strategy.

imitative

Unlike value benefits, cost benefits _____.

include scale and scope savings

Incremental innovation is an overall strategic approach in which a firm

patterns itself on other firms, with the exception of one or two key areas.

The ______ is the post tax income an entrepreneur personally seeks from an business.

magic number

A ______ is an intended outcome for a business.

goal

______ is the amount of profit earned by a business before calculating the amount of income tax owed.

Profit before taxes

Which of the following statements about the generic strategies are correct? (Check all that apply.)

The differentiation and cost strategies are aimed at mass markets. The term "generic" comes from the fact that they are so widely applicable. They are three applicable classic strategies for businesses of all types--differentiation, cost, and focus.

Which of the following is an example of an initial goal decision? (Check all that apply.)

Whom the target customer will be? What is expected out of the business? What is the product and/or service idea.?

Benefits

_____ are characteristics of a product or service, such as low cost or high quality, which target consumers are likely to consider worthwhile.

Marketing is

the actions of a business related to promoting and selling products or services.

The degree of similarity is

the extent to which a product or service is like another.

A company's ______ its unique selling points that customers can expect when they purchase its goods or services.

value proposition

Which of the following statements about cost strategies are correct? (Check all that apply.)

It is a generic strategy in which a firm offers a combination of cost benefits that appeals to the customer. Small businesses can pursue cost mass-market cost strategies when they have low cost operations. They are aimed at mass markets.

Which of the following statements regarding profit before taxes are correct? (Check all that apply.)

It is the amount of profit earned by a business before calculating the amount of income tax owed. When a business can support it, owners tend to put salaries in the operating expense category. It represents the amount of money the owners take out of the firm annually and on which they pay taxes.

Which of the following statements characterize the growth stage of the industry life cycle? (Check all that apply.)

It is where customer purchases increase at a dramatic rate. Sometimes products or services becomes so popular that the firm(s) are unable to keep up with demand and it becomes known as a "hot" product. Sometimes other firms jump in to take advantage of the growth and may be called the boom

A(n) ______ strategy is an overall strategic approach in which a firms seeks to do something that is very different from what others in the industry are doing.

innovative

While _____ refer to what customers sense in a product or service, _____ refer to the ways by which firms can keep costs low for customers.

value benefits; cost benefits

A characteristic of a market that defines the geographic range covered by the market, from local to global is called the ______.

scope

The maturity stage of the industry life cycle is the third stage,

which is marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies.