MGMT 470: Ch. 7
(4) Types of Particularly Attractive Customers: _________Customers: Return, are already presold, & refer others
loyal
The post tax income the entrepreneur personally seeks from the business
magic number
(5) Stages that shows Industries Move in Predictable Ways: 1. ________ stage 2. ________ stage 3. ________ stage 4. ________ stage 5. ________ stage
introduction, growth, shake-out, maturity, retrenchment
(3) Generic Strategies: A generic strategy that targets a portion of the market, called a segment or niche
focus strategy
(5) Stages that shows Industries Move in Predictable Ways: 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
maturity stage
Most firms use imitation plus or minus ______ _____ _____ _______.
one degree of similarity
___________ __________: An imitative business that competes locally in the same industry
parallel competition
(4) Types of Particularly Attractive Customers: _________ Customers: Not just loyal, they rave about your product!
passionate
A ________ ________: A graphic display that positions products, services, brands, or companies according to their scores on important strategic dimensions
perceptual map
The amount of profit earned by a business before calculating the amount of income tax owed
profit before taxes
(5) Stages that shows Industries Move in Predictable Ways: An organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival
retrenchment
How profits are made - Evaluate: 1. _______ _______ potential 2. If a ______ is potential 3. How to keep _______ & _______ _______ below average
sales growth, premium, costs & operating expenses
(2) Strategic Decisions about your Market: A characteristic of a market that describes the size of the market - a mass market or a nice market
scale
Whom do you plan to sell to - everyone or targeted markets?
scale
(2) Strategic Decisions about your Market in General you need to make early in the process of going into business: 1. The _______ of the market 2. The _______ of the market
scale, scope
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
value proposition
Marketing focuses on the _________ ________. While strategy focuses on the firm's __________ __________.
value proposition, competitive advantage
If you seek _______, having wealthy customers may be rewarding.
wealth
Changes in competitors, sales, and profits in an industry over time
industry dynamics
The Small Business Strategy Process: - Owner Rewards - Product/Service: Industry, Imitation/Innovation - Markets: Scope & Scope Step #_____: __________ TOOL = _______ _______
1, goals, magic number
The Small Business Strategy Process: - Value Benefits - Cost Benefits Step #_____: __________ TOOL = _______ _______ _______
2, customers & benefits, distinctive competence mapping
(6) Pieces of Information that a Basic (IA) Consists of: 1. _________ number & description 2. ________ ________ over time 3. ________ 4. How ______ are made 5. ________ _______ _______ _______ 6. _______ & sources
NAICS, industry size, profitability, profits, target market competitor concentration, analysis
________ defines how your business operates.
Strategy
(5) Initial Key Goal Decisions: 1. As the owner, what do you ______ out of the business? 2. What is your _______ or ________ idea (& its industry)? 3. For your product/service, how ______ or _______ will you be? 4. _______: Whom do you plan to sell to? 5. _______: Where do you plan to sell?
expect, product, service, innovative, imitative, scale scope
(11) Value Benefits: (pt. 2) 6. ________ 7. ________ 8. ________ 9. ________/________ 10. ________ 11. ________
assurance, place, credit, brand/reputation, belonging, altruism
Characterized as value benefits or cost benefits
benefits
_________ _________ _________: A strategy based on creating a new product or service that has no competitors
blue ocean strategy
A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time
boom
The particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry
competitive advantage
Any other business in the same industry as yours
competitors
Skills all competitors have
core competencies
__________ Strategies: Three widely applicable classic strategies for businesses of all types - differentiation, cost, and focus
generic
A _______: An intended outcome for your business
goal
The _______ = The First Step of Strategic Planning
goal
________ ________ set the stage for the kind of business you will have.
goal decisions
(5) Steps of the Small Business Strategy Process: 1. ______ 2. ______ & _______ 3. _______ _______ & _______ 4. _______ _______ 5. _______ _____-_____ _______
goals, customers & benefits, industry dynamics & analysis, strategy selection, post start-up tactics
(7) Common Entry Wedges: Rule changes by the government can help small firms compete
government rules
Funds left over after deducting the cost of goods sold
gross profit
If you seek _______, having customers you can learn from is best.
growth
(5) Stages that shows Industries Move in Predictable Ways: When the general public becomes involved, it leads to either the growth stage or other firms jump in for the boom
growth stage
An _______ Strategy: The classic small business strategy; An overall strategic approach in which the entrepreneur does more or less what other are already doing
imitative
___________ ___________: Imitation plus one degree of similarity; An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas
incremental innovation
If you have a product/service, you also have a __________.
industry
The general name for the line of product or service being sold, or the firms in that line of business
industry
(11) Supra-Strategies: (pt. 2) 6. _________-___________ 7. __________ 8. __________ __________ or no-frills 9. __________ __________ ____ __________ 10. Tightly __________ __________
single-mindedness, comprehensiveness, bare bones, cutting out the intermediary, managed decentralization
___________ Actions: Competitive responses requiring a major commitment of resources
strategic
How to cope with competitive pressures → Using a combination of: ________ actions & ________ actions
strategic, tactical
The idea and actions that explain how a firm will make its profit
strategy
(7) Common Entry Wedges: Occur when a new product is in demand
supply shortages
____________ Step: Refining your strategies/tactics to maintain a competitive advantage
post-start-up
(4) Types of Particularly Attractive Customers: __________ Customers: Produce greater profits
corporate
(4) Types of Particularly Attractive Customers: 1. _________ Customers 2. _________ Customers 3. _________ Customers 4. _________ Customers
corporate, loyal, local, passionate
___________ Benefits: Ways a firm keeps costs low for the customer
cost
(3) Generic Strategies: A generic strategy aimed at mass market in which a firm offers a combination of cost benefits that appeals to the customer
cost strategy
(11) Supra-Strategies: (pt. 1) 1. __________ 2. _________ 3. _______-________ 4. Serving the ______/______ 5. __________
craftsmanship, customization, super-support, undeserved/interstices, elite
(7) Common Entry Wedges: Occurs when a customer, most often a business, is willing to sign a contract with a small business to ensure a product or service
customer contracting
________ Stage: A life cycle stage in which sales and profits of the firm begin a falling trend
decline
(4) Steps to the Strategic Planning Process: 1. Reviewing & confirming the goals that ______ _____ _____ and knowing your _____ _____ 2. Finding your ______ ______ - plot your customers & the benefits you want to offer against competitors 3. Studying dynamics & trends using _____ ______ 4. Building on the prior three steps to determine the ______ _____ _____ & ______ for the firm
define your firm, magic number, distinctive competence, industry analysis, best strategic direction, strategy
The _________________: The extent to which a product or service is like another
degree of similarity
(3) Generic Strategies: A type of generic strategy aimed at clarifying how one product is unlike another in a mass market
differentiation
(3) Generic Strategies: 1. _________ 2. ________ strategies 3. ________ strategies
differentiation, cost, focus
- How your firm differs - Represent your competitive advantage
distinctive competence
As you decide what benefits to offer, you can use a _______ _________ _______.
distinctive competence map
An opportunity that makes it possible for a new business to gain a foothold in a market
entry wedge
(7) Common Entry Wedges: Occurs because government agencies, government-sponsored commercial contracts, and many big businesses have policies that provide for set-asides or quotas for purchases from small businesses
favored purchasing
(3) Universal Rewards Sought by Entrepreneurs: 1. _________ 2. _______ _______ 3. _______ _______
flexibility, personal growth, personal income
_________ _________ allows an entrepreneur to see how profits are generated, which tells if an industry is growing, stable, or in decline.
industry analysis
_________ _________ (_____): A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends
industry analysis (IA)
Look at the changes in competitors sales and profits - the _______ _______ - to make sure it is a good time to enter into a business
industry dynamics
An _______ Strategy: When they do something very different; An overall strategic approach in which a firm seeks to do something that is very difficult from what others in the industry are doing
innovative
(5) Stages that shows Industries Move in Predictable Ways: The life cycle stage in which the product or service is being invented and initially developed
introduction stage
(4) Types of Particularly Attractive Customers: __________ Customers: (Now less about geographic distance), and more about social relationships
local
(5) Cost Benefits: 1. _______ costs 2. _______ savings 3. _______ savings 4. _______ 5. ________ _______
lower, scale, scope, learning, organizational practices
You need to find your "_________ _________" or how much you want to make
magic number
The business term for the population of customers for your product or service
market
(7) Common Entry Wedges: Occurs when business firms leave a market
market relinquishment
___________: The actions of a business related to promoting and selling products or services
marketing
_______ Market: A customer group that involves large portions of the population
mass
A _______-market is broad, while a _______-market is narrowly defined.
mass, niche
The industry eventually reaches a stable number of firms in the _______ stage before entering the ________ stage.
maturity, decline
The amount of money left after operating expenses are deducted from the business
net profit
(4) Strategic Actions include: 1. Entering ________ ________ 2. New ________ _______ 3. Changing _______ ________ 4. _______/_______
new markets, product introductions, production capacity, mergers/alliances
_______ Market: A narrowly defined segment of the population that is likely to share interests or concerns
niche
After the 4-step Strategic Planning Process, there is a continuing effort called _________ __________.
post-start-up
(4) Tactical Actions include: 1. _______ _______ (or increases) 2. ______/______ enhancements 3. Increased ______ ______ 4. New ______ ______
price cutting, product/service, marketing efforts, distribution channels
______________ / _______________: When a new product or service is introduced; The process of creating new products or services, which results in a previously unseen product or service
pure innovation / blue ocean strategy
(11) Value Benefits: (pt. 1) 1. _______ & ________ 2. ________ & ________ 3. ________ 4. ________ ________ 5. ________
quality & style, delivery & service, technology, shopping ease, personalization
(2) Strategic Decisions about your Market: A characteristic of a market that defines the geographic range covered by the market - from local to global
scope
Where do you plan to sell - locally, regionally, nationally, globally?
scope
(7) Common Entry Wedges: Seeks out customers who are already being serviced by another firm
second sourcing
(5) Stages that shows Industries Move in Predictable Ways: A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry
shake-out stage
All booms come to an end, and there is the ____-____ _________ and many firms close down
shake-out stage
A way to think about the line of distribution of a product from its start as materials outside the target firm, to its handling in the target firm, to its handling by sellers, with placement into the hands of customers
supply chain
(4) Sources of Competition for Any Business: 1. The _______ ________ you face 2. _______ _______ in your industry 3. The potential for __________ ________ 4. The _______ _______ ___ ________
supply chain, existing firms, new entrants, broad threat of substitutes
(7) Common Entry Wedges: 1. ________ _________ 2. _________ _________ 3. _________ _________ 4. _________ _________ 5. _________ _________ 6. _________ _________ 7. _________ _________
supply shortages, unutilized resources, customer contracting, second sourcing, market relinquishment, favored purchasing, government rules
___________ Actions: Competitive responses with low resource requirements
tactical
What is the best way to orient your strategic planning process?
thinking ahead about your customers
The goal of strategy after the start-up = _______________________.
to secure competitive advantage
(7) Common Entry Wedges: Can be a physical resource or a human resource
unutilized resources
___________ Benefits: What a customer senses in the product/service
value
