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Business Plan Development Flashcards

1
Q

What is entrepreneurship? (Creative destruction)

A

Is a mindset or way of thinking

  • Opportunity focused
  • Innovative
  • Growth related
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2
Q

Explain the entrepreneurial process?

A

Idea Generation - what is the concept?
Opportunity evaluation - Is this worth pursuing?
Planning - How are we going to do it?
Company formation/launch - The act of putting the plan in motion
Growth - The expansion of the idea and further improving on it

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3
Q

What is RBV?

A

Sustainable competitive advantage is created when firms possess and employ resources that

  • Valuable
  • Rare
  • Can not be copied
  • No substitutes
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4
Q

Describe Churchill & Lewis Life Cycle theory

A

Existence - ideas, skills, supplies, cash
Survival - Employees, planning, technology info
Success - Cash, mgmt abilities, planing sys, org sys
Take-off - Money, personnel
Maturity - Organizational structure, capabilities of mgmt, systems

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5
Q

What is Effectual reasoning?

A

Creative problem solving, working with the resources that you have and making something profitable from those resources.

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6
Q

Explain opportunity recognition

A

Proactively brainstorming a new business venture. Only happens once the idea has strength.

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7
Q

What are Porter’s generic strategies

A

Product Uniqueness - ability to differentiate the product/service from those of the market’s competitors
Low Cost - Ability to reduce costs and sustain a price advantage
Focus - Targeting a particular market segment

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8
Q

What is the value chain?

A 
Value chain is made up of many elements
- Inbound logistics
- Operations
- Outbound logistics
- Marketing & Sales
- After sales service
Support activities
- HRM
- Technology
- Procurement
- Firm infrastructure
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9
Q

Explain venture concept

A

Defines who and what you want your business to do and serve.

  • Target Market niche
  • Target Customers
  • Products & Services
  • Positioning
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10
Q

What are the elements of a business model

A

A business model describes the rational of how an organization creates, delivers and captures value

  • The structure and nature of revenues
  • Approach to R&D
  • Production model
  • Go-to-market model
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11
Q

What are some competitive advantage factors

A

Efficiency - high output for minimal input
Quality - exhibit attributes that satisfy the customers needs
Innovation - creating and improving p/s
Customer responsiveness - meeting the needs of your customers

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12
Q

What is the purpose of market research?

A
  • Understand if you have a viable market for your P/s
  • Helps reduce risks
  • Create a product positioning strategy
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13
Q

What is market research?

A

Gathering of data about your market and analyzing it to make assumptions

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14
Q

Explain the 4 of stages product life cycle

A
  1. Introduction
  2. Growth
  3. Maturity
  4. Decline
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15
Q

What are Porters 5 forces analysis?

A 
Threat of new entrants
Bargaining power of Suppliers
Bargaining power of Buyers
Threat of substitutes
Rivalry against competitors
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16
Q

What is the purchase decision making process?

A
  • Awareness of a need
  • Information search
  • Evaluation of alternatives
  • Decision to purchase
  • Evaluation of purchase
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17
Q

Explain the business venture life cycle

A

Diagram with the cash burn stage (neg cash flow). Shows how most businesses operate for concept to maturity over time in relation to cash flow and time. Investors experience higher risk at the start compared to the end. The cost of operating are also more expensive at the start.

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18
Q

What are the stages in the business venture life cycle

A
  • Concept
  • Startup
  • Early Growth
  • High growth
  • Maturity
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19
Q

What are the sources of funding?

A

Founder self financing
Friends and family
Angel investors/Venture capitalists

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20
Q

Explain the concept of growing the pie

A

Growing the pie is the idea of making the business worth more over time to increase all key steak holders share in the business.

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21
Q

What is debt funding?

A

The selling of bonds, bills, or notes to individuals. In return for lending the money, the individuals become creditors and receive a promise that the principal and interest on the debt will be repaid

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22
Q

What are the three types of innovation?

A
  1. Incremental innovation
  2. Breakout innovation
  3. Disruptive innovation
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23
Q

Describe Incremental innovation

A

More of the same with a slight twist or variation of a theme i.e. extra strength razor blades

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24
Q

Describe Breakout Innovation

A

Significantly ups the ante in a market by changing perceptions but essentially offers same product i.e. iPhone

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25
Describe Disruptive innovation
Totally disrupts the market, render current technology obsolete, change value propositions. I.e. iPhone
26
What are the 5 stages of diffusion of innovation?
Knowledge: exposed to innovation, but lacking in information Persuasion: Interested in innovation & actively seeking details on it Decision: Weighs pros & cons, makes decision Implementation: uses the innovation, determines usefulness Confirmation: Finalises decision about whether or not to continue use.
27
What are Shumpeter's Sources of Opportunity
- Use a new tech to produce a new p - Use an existing tech to produce new p - Use existing tech to produce old p in new way - New resource to produce more efficiently - Develop a new market for an existing product
28
What are the four characteristics of Timmons' business opportunity
1. Attractive to customers 2. Will work in the business environment 3. Can be executed now 4. have all the resources needed
29
What are the Five roots of opportunity?
- Problems - Changes - Inventions - Competition - Technological Advances
30
What is equity funding?
The process of raising capital through the sale of shares in an enterprise. Its the sale of ownership of your business.
31
What is the accounting equation?
What the business owns = What the business owes Assets = Liabilities + OE
32
What are some examples of Goal posts?
- Start up costs - Time to first dollar - Time to first profit - 1st round and 2nd round financing - Potential value for exit - ROI - Payback period
33
What is ROI?
Return on investment measures return as a percentage of the original investment (net profit / investment) x 100 = ROI%
34
Define Net Profit
amount the firm has earned beyond what it has spent
35
Define Total investment (ROI)
Start up investment plus any additional money invested later
36
Define Period of time (ROI)
For which you are calculating ROI- typically one more or one year
37
What are COGS and COSS?
Cost of Goods sold | Cost of service sold
38
What are some variable costs?
Cost of materials Cost of labor Sales commissions Shipping and handling
39
What are some Fixed costs?
Utilities, Salaries, Advertising, Insurance, Depreciation, Interest, Rent
40
Why are fixed cost bad for business?
- They must be paid regardless of gross profit | - Keep a cash reserve as a cushion of protection ICE
41
What is the purpose of a Profit and Loss forecast?
Evaluate the gross profit margin (COGS) | - Indicates pricing policy and buying capabilities
42
What is a cash-flow statement?
Estimates what the business cash position will be at a future point in time - Shows cash shortages or surplus - knowledge og when allows the team to develop strategies
43
What is the purpose of the Balance Sheet?
- Estimate the various asset balances that will require support the expected sales - Estimate the indebtedness required to finance the above asset base - Estimate the level of owner's equity required to finance the required asset base
44
Explain a sensitive analysis?
- Expect scenario - Worst case scenario - Best case scenario Based around a solid macro analysis Should be based around the three finical statement forecasts
45
Elements of organizing then venture team!
- Good ideas and good products are a dime a dozen. - Good execution and good management - Good people, are rare
46
What are some characteristics of a successful entrepreneurial management team?
- Drive and energy - Self Confidence - Set challenging and realistic objectives - Long term involvement - Use money as a scorecard
47
What are some business skills to have in a team?
- Sales and marketing experience - Research and development - Operations - Supply chain management
48
What are the 3 elements of leadership?
- Goal or vision that people can desire - People to follow the leader toward that goal. - Mutually beneficial to the followers and leaders.
49
Describe the Authoritative leadership style
- Strict control over followers by directly regulating policy procedures and behavior - Create distance between themselves and followers - Direct supervision
50
Describe the Democratic leadership style
- Engage in supportive communication that facilitates interaction between followers and leaders - Encourages involvement and participation of followers - Believe followers are capable of making informed decisions - Two heads are better than one - contributions can improve quality of decision making
51
Describe the Laissez-Faire leadership style
- French "leave them alone" - Sometimes called non leadership - Avoidance of taking the lead - Abdication of responsibility, offer little guidance or support - Can be positive: offers high degree of autonomy and self-rule, and guided freedom
52
What are some attributes of managers?
- Plan, react, accommodate, distant relationship, group orientation, formal, impersonal, coerce, control - Transact, avoid change, avoid risk, do things correctly, follow a plan, stables, position power, monitor
53
What are some attributes of leaders?
- Envision, act, initiate, face-to-face contact, individualized orientation, informal, personal, encourage, delegate - Transform, thrive of change, take risks, do the correct things, communicate a vision, advance, personal power, empower.
54
What are 5 cultures of teamwork success?
1. Practice what you preach communicate the values vision and objectives 2. Be selective in hiring (culture first, skills second) 3. Make use of small talented teams  give them authority to act 4. Reward excellence where performance is above and beyond 5. Listen hard, talk straight honest two way communication
55
What are the 3 hierarchy of strategy?
- Corporate Level - Business Level: cost leadership, focus, differentiation - Functional Level: Top down, bottom up
56
What is strategic human resource management?
It is the effective management of people as a source of competitive advantage (Rational choice, constituency based)
57
What is an outcome? (SHRM)
‘Organisational systems designed to achieve sustainable competitive advantage through people’ ‘The mission, vision & priorities of the HR function’
58
What is a process? (SHRM)
- Linking HR practices (human, social and intellectual capacity) to the business strategy
59
What is the proactive orientation in SHRM about?
It is where SHRM has a seat at the table, it is fully involved in the business strategy formulation
60
What is the reactive orientation in SHRM about?
Regards that the organisation strategy determines the HR strategy. Subservient to corporate & business level strategy
61
What are the 5P's regarded with reactive SHRM orientation?
1. Philosophy 2. Policies 3. Programmes 4. Practices 5. Processes
62
Environmental variables effecting SHRM
- product market - capital market - technology - labour market - Stakeholder interests
63
What must you consider when integrating SHRM into a business?
- The competitive environment - Business conditions - Importance of HR by line managers
64
What are the 3 Ideal strategy models? (SHRM)
1. Control based 2. Resource based 3. Integrative based
65
What is the control based strategy model?
- Control all aspects of work to secure a high level of labour productivity and profitability - Considers: Rewards, job security, pace of work
66
What are the types of control in the control based strategy model?
- Bureaucratic - Technical - Process based - Outcome based - Discipline
67
What is resources based strategy management?
It is the degree to which managers view their HR as an asset as opposed to a variable cost
68
What are the 4 characteristics of resource based strategy?
- Scarce - Durable - Not easily traded - Difficult to imitate
69
What is an integrative strategy model?
Provides a framework to cope with the ebb and flow of intensity and direction in HR
70
2 dimensions of integrative strategy model?
1. Acquisitions and development (Making or buying staff) | 2. Locus of control (focus on outcomes, encourage mutual trust and respect)
71
What are the 3 levels of organisational culture?
1. Assumptions 2. Values 3. Symbols
72
What are assumptions?
They are unstated beliefs about human relationships, human nature, truth and environment
73
What are values?
They reflect what the organisation feels it should do, what it believes, its vision and mission statements
74
What are symbols?
The top level of culture, it is the visual elements of an organisations culture such as the stories, rituals, dress and physical appearance, language
75
What are the 3 aspects that integrate business strategy with HR strategy?
1. Linking of HR policies and practices with the strategic management process in an org. 2. internalization of the importance of HR on all managers 3. Integration of the workforce into the organisation to foster commitment
76
Explain Crazy Quilt
- Self selection of stakeholders - Build Partnerships - Reduces uncertainty
77
Explain Bird in the hand
Investors prefer the certainty of dividend payments to the possibility of substantially higher future capital gains.
78
Explain Pilot in the plane
In this stage all the previous principles are put together. The future cannot be predicted, but entrepreneurs can control some of the factors which determine the future.
79
Explain the Lemonade principle
Entrepreueurs cooperate with parties they can trust. These parties can limit the affordable loss by giving pre-commitment
80
Explain the Affordable loss principle
An entrepreneur does not focus on possible profits, but on the possible losses and how they can minimize those losses.

SEM142 (3 decks)

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