bsm 200 midterm Flashcards
what is the SME
small to medium enterprise
characteristics of the SME (2)
- sole proprietorship
- local operation
Characteristics of a startup (3)
- growth-oriented founders
- mass-market potential
- has early investors
Growth challenges of the entrepreneur (3)
- loyal to early hires
- focused on short term objectives/tasks 3. networking ability,
What factors influence growth? (5)
- Industry life cycle change
- competition
- demand
- investor pressure
- entrepreneurial preference
The growth process (6)
- a complex process
- depends on people/leader/culture
- needs diversity of thinking
- strategic reframing
- tolerance of mistakes
- requires change
Are growing businesses different from startups? Why? (4)
Yes, in their
1. capital
2. personnel
3. management
4. organizational requirements
Hess’ Growth Decision Template (9)
- why should we grow
- how should we grow
- how much should we grow
- how fast should we grow
- do we have the right people, processes, and controls in place to support growth?
- what are the risks of growth
- what are the risks of not growing
- do the benefits of growth outweigh the risks
- how do we manage the risks created by our decisions
What are the preconditions to growth?
Internal: why should we grow? are the founders ready for change?
External: attention to customer value proposition
How to prepare for growth (3)
- install accounting systems, have good customer relationship
- evaluate costs of expanding
- demand forecast
How to grow organically (3)
- improvements
- innovations
- scaling
how to grow inorganically (3)
- acquisitions (very risky, but fast)
- strategic alliances
- joint ventures
growth stressors
understand that growth puts you in a competitive space
risk management in business growth (4)
- avoid doing the same thing as competition
- attract risk intolerant investors
- risk of equity
- ensure growth is well managed and successful
what is the customer value proposition
why a customer should buy a product
growth through improvement (4)
- needs to be ahead of the competition
- deliver what the customer needs faster than competition
- deliver less expensively
- improve operating systems to enhance profitability and prepare for growth
growth through innovation (3)
- combining features or products in new ways
- transferring concepts from one industry to another
- collaborating with another business
growth boosters (4)
- new products/quality changes
- new channels
- pricing, branding, and payment innovations
- bundling
Scaling - The Business Model (9)
- Key partners: who are our suppliers
- Activities: what do we do with our resources
- Resources: what goods, services, and infrastructure do we use
- Value Proposition: what problems need to be solved and what product does it best
- Customer relationships: how do we interact with customers
- Channels: How do our customers find, buy, and use the products
- Customer Segments: Who are our users and who are our paying customers?
- Cost Structure: What is the total cost of production?
- Revenue Model: where does revenue come from?
Scaling within a business (3)
- means doing more with the same amount of money
- means ramping up all aspects of business operations at the same time/doing more of the same
- related to the economics of scale in that one is a precondition to the other
What is the scaling business model?
the core of what a business does
The Right Amount of Growth
Ensure your business has the right size, brand credibility, and financial ability
Ex: if a small businesses products are being sold in a major corporation, there may not be enough product to keep up with the demand
What is aquisition?
when one business buys another
What were Shopify’s growth methods? (4)
- improvements to software, payment processing, and enterprise plan
- innovation: shifted to an e-commerce service
- strategic alliances: tiktok and paypal
- NO joint ventures
What is the goal of a business strategy?
to establish competitive advantage and therefore sustainable financial performance
What does a business strategy consist of? (4)
- vision/mission
- industry attractiveness
- inimitable capabilities
- implementation, use of resources, management decisions
Defining the business: Values
HOW: a set of fundamental beliefs that guide a business in the decisions it makes
Defining the business: Vision
WHERE: an explanation of why the company exists and where it is trying to head
Defining the business: Mission Statement
WHY: an outline of the fundamental purposes of an organization
Defining the business: Strategy
WHAT: the broad, long-term accomplishments an organization wishes to attain
Defining the business: Goals and Objectives
HOW: specific, measurable, short-term statements detailing how to achieve the organization’s goals
What is SWOT analysis?
the planning tool used to analyze an organization’s strengths, weaknesses, opportunities, and threats
SWOT Analysis includes… (4)
- potential internal strengths
- potential internal weaknesses
- potential external opportunities
- potential external threats
Management Executing Strategy (4)
- organizing
- controlling
- planning
- leading
Management Hierarchy (3)
- top management
- middle management
- first line management
Management Hierarchy: Top Management Responsibilities (3)
- articulate vision
- establish priorities
- overseeing why the company exists
Management Hierarchy: Middle Management Responsibilities (2)
- facilitate communication
- coordinate teams
Management Hierarchy: First Line Management Responsibilities (2)
- train, motivate, and evaluate employees
- manage daily processes
Forms of Planning (4)
- strategic planning
- tactical planning
- contingency planning
- operational planning
Forms of Planning: Strategic Planning
setting broad, long-range goals, done by top managers
Forms of Planning: Tactical Planning
identifying specific, short-term objectives, done by middle management
Forms of Planning: Contingency Planning
backup plans in case primary plans fail. these plans focus on issues that are most probable and potentially harmful. established through risk factors
Forms of Planning: Operational Planning
the setting of work standards and schedules. done by first line management
Employee Management Theories (5)
- Maslow’s Hierarchy of Needs
- Theory X and Theory Y
- Hawthorne Effect
- Scientific Management
- Herzberg Motivating Factors
Maslow’s Hierarchy of Needs Levels (4)
physiological, safety, social, esteem, actualization
Theory X and Theory Y
the primary motivator is fear, people must be controlled, and people avoid work
Who developed Theory X and Theory Y
Douglas McGregor
Hawthorne Effect
people behave differently if they think they are being watched
Who developed the Hawthorne Effect
Elton Mayo
Scientific Management
studying workers to identify the most efficient way to do things, then teaching others those methods. goal is to increase worker productivity
Who developed scientific management
Frederick Taylor
Herzberg Motivating Factors
the relationship between motivation and job-related factors. found that the absence of certain factors in the work environment will cause dissatisfaction
Motivators based on Herzberg’s Factors
work itself, achievement, recognition, responsibility, growth, and advancement
Benefits of Organization (6)
- specialization
- coordination
- culture and cooperation (employee motivation)
- budgeting
- accountability
- decision-making
Why is organizing important?
vital part of business growth, allows for communication, coordination, control, and efficiency
Organizing consists of… (5)
- dividing labour
- creating teams to do specific tasks
- assigning responsibility and authority
- allocating resources
- establishing procedures for accomplishing the organizational objectives
Fayol - Principles of Organization
concerned with how workers were managed and how they contributed to the organization. HR style
Max Weber - Principles of Organization
bureaucratic management style
what are the variables in organizational structure (4)
- centralization vs decentralization of authority
- span of control
- tall vs flat organizational design
- departmentalization or not
What are the 6 considerations of promotional programs?
- motives
- message
- market
- medium
- money
- measure of success
what is included in the promotion mix? (6)
- advertising
- personal selling
- direct marketing
- sales promotion
- public relations
- product
What is the push strategy
convince wholesalers and retailers to stock and sell merchandise
what is the pull strategy
consumers requesting products from retailers
what is a marketing intermediary?
middlemen that distribute products from the distributor to the retailer
5 impacts of pricing strategies
- return on investment
- building traffic
- increasing market share
- creating image/building brand
- addressing social objectives
What is the break-even analysis?
the process used to determine profitability at various levels of sales
what is total fixed costs
all expenses remain the same no matter how many products are made or sold
what are variable costs
costs that change according to the level of production
what is the breakeven (BEP) formula?
total fixed costs DIVIDED BY (unit price - variable cost/unit)
