entr 101: exam two
opportunity identification
ability to recognize a viable business opportunity within a variety of good ideas
triple bottom line (tbl)
accounting framework that goes beyond the traditional measures of profit, return on investment, and shareholder value to include environmental and social dimensions
manipulation
an entrepreneur attempts to make changes in the external environment to achieve consistency between an organization and its environment
international alliances
another alternative available to the entrepreneur in the international arena, three main types of these strategic alliances: informal international cooperative alliances, formal international cooperative alliances (ICAs), and international joint ventures
marketability
assembling and analyzing relevant information about a new venture to judge its potential success
product availability
availability of a salable good or service at the time the venture opens its doors
failure prediction model
based on financial data from newly founded ventures; assumes the financial failure process is characterized by too much initial indebtedness and too little revenue financing
synthesis
basic type of innovation that involves combining existing concepts and factors into a new formulation
extension
basic type of innovation that involves extending the life of a product, service, or process already in existence
invention
basic type of innovation that involves the creation of a new product, service, or process that is often novel or untried
duplication
basic type of innovation that involves the replication of an already existing product, service, or process
licensing
business arrangement in which the manufacturer of a product (or a firm with proprietary rights over technology or trademarks) grants permission to a group or an individual to manufacture that product in return for specified royalties or other payments
importing
buying and shipping foreign-produced goods for domestic consumption
social value
contribution to the welfare or well-being in a given community
resource-rich countries
countries have something that others need, thus forming the basis of an interdependent international trade system
feasibility criteria approach
criteria selection list from which entrepreneurs can gain insights into the viability of their venture
european union (EU)
economic and political union of 27 member states, located primarily in europe
global entrepreneurs
entrepreneur who relies on global (international) networks for resources, design, and distribution
ecopreneurship
environmental entrepreneurship with entrepreneurial actions contributing to preserving the natural environment, including the Earth, biodiversity, and ecosystems
benefit corporation
exactly the same as traditional corporations except for a few specific elements that make them more socially sustainable enterprises: purpose, accountability, transparency
sustainable entrepreneurship
focused on the preservation of nature, life support, and community in the pursuit of perceived opportunities to bring into existence future products, processes, and services for gain, where gain is broadly construed to include economic and noneconomic gains to individuals, the economy, and society
creative process
four phases of creative development: background or knowledge accumulation, incubation process, idea experience, and evaluation or implementation
creativity
generation of ideas that results in an improvement in the efficiency or effectiveness of a system
growth of sales
growth pattern anticipated for new-venture sales and profits
customer availability
having customers available before a venture starts
critical factors
important new-venture assessments
MICROiterations
in design-centered entrepreneurship it is iterating within each action stage to improve the outcome
MACROiterations
in design-centered entrepreneurship it is moving from one particular action stage back to a previous stage for further development
design-centered entrepreneurship
in essence, the entrepreneur applies design methods in four action stages of developing an opportunity: Ideation, market engagement, and business model
political risks
include unstable governments, disruptions caused by territorial conflicts, wars, regionalism, illegal occupation, and political ideological differences
north american free trade agreement (nafta)
international agreement among canada, mexico, and the united states that eliminates trade barriers among the three nations
internal problems
involve adequate capital, cash flow, facilities/equipment, inventory control, human resources, leadership, organizational structure, and accounting systems
ecovision
leadership style for innovative organizations, encourages open and flexible structures that encompass the employees, the organization, and the environment, with attention to evolving social demands
b corporation
legal structure that expands corporate accountability to make decisions that are good for society, not just shareholders, their performance standards enable consumers to support businesses that align with their values
social entrepreneurship
new form of entrepreneurship that exhibits characteristics of nonprofits, government, and businesses; it applies traditional (privatesector) entrepreneurship's focus on innovation, risk taking, and large-scale transformation to social problem solving
creation
new social context developed by an entrepreneur with new rules, norms, values, scripts beliefs, or models
conformance
new venture does not question, change, or violate the social structure but rather "follows the rules"
selection
new venture locating in a favorable environment
left brain
part of the brain that helps an individual analyze, verbalize, and use rational approaches to problem solving
right brain
part of the brain that helps an individual understand analogies, imagine things, and synthesize information
start-up problems
perceived problem area in the start-up phase of a new venture, such as lack of business training, difficulty obtaining lines of credit, and inexperience in financial planning
prototyping
physical representation of the venture that captures the essence of an idea in a form that can be shared with others for communication and feedback that closes the gap between concept and reality
innovation
process by which entrepreneurs convert opportunities into marketable ideas
technical feasibility
producing a product or service that will satisfy the expectations of potential customers
lean start-up methodology
provides a scientific approach to creating early venture concepts and delivers a desired product to customers' hands faster. It is hypothesis-driven and entrepreneurs must work to gather and incorporate customer feedback early and often
social impact investing
raising funds for socially motivated causes
stereotyping
refers to averages that people fabricate and then, ironically, base decisions on as if they were entities existing in the real world
external problems
related to customer contact, market knowledge, marketing planning, location, pricing, product considerations, competitors, and expansion
diaspora networks
relationships among ethnic groups that share cultural and social norms
probability thinking
relying on probability to make decisions in the struggle to achieve security
legitimacy
resource that enables new ventures to overcome the "liability of newness," allowing for the acquisition of other resources such as financial capital, human resources, and strategic relationships
lifestyle ventures
small venture in which the primary driving forces include independence, autonomy, and control
institutional logics
socially constructed, historical patterns of practices, assumptions, values, beliefs, and rules by which individuals provide meaning
pivot
structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth
comprehensive feasibility approach
systematic analysis incorporating external factors
design methodology
takes an initial concept idea and develops a proof of concept that elicits feedback from relevant stakeholders
minimum viable product (mvp)
the early version of the product that enables a full turn on the feedback loop with a minimum of effort
exporting
the shipping of a domestically produced good to a foreign destination for consumption, important for entrepreneurs because it often means increased market potential
growth stage
third stage of a new venture life cycle, typically involving activities related to reformulating strategy in the light of competition
shared value
transformation of business thinking recognizing societal weaknesses that create internal costs for firms (e.g., wasted energy, accidents, inadequacies in education)
world trade organization (wto)
umbrella organization governing the international trading system. Its job is to oversee international trade arrangements, but, contrary to popular belief, the WTO does not replace the General Agreement on Tariffs and Trade (GATT)
small profitable ventures
venture in which the entrepreneur does not want venture sales to become so large that he or she must relinquish equity or ownership position and thus give up control over cash flows and profits, which it is hoped will be substantial
functional perspective
viewing things and people in terms of how they can be used to satisfy one's needs and to help complete a project
high-growth venture
when sales and profit growth are expected to be significant enough to attract venture capital money and funds raised through public or private placements
joint venture
when two or more firms analyze the benefits of creating a relationship, pool their resources, and create a new entity to undertake productive economic activity
incongruities
whenever a gap or difference exists between expectations and reality