Chapter 3 - Small Business Strategy Flashcards
What is a goal?
an intended outcome for your business.
What is a magic number?
The post-tax income the entrepreneur personally seeks from the business.
What is industry?
the general name for the line of product or service being sold, or the firms in that line of business.
What is a competitor?
any other business in the same industry as yours.
What is imitative strategy?
an overall startegic approach in which the entrepreneur does more or less what others are already doing
What is innovative startegy
An overall startegic approach in which a firm seeks to do something that is very different from what others in the industry are doing.
What is degree of similarity?
The extent to which a product or service is like another.
What is parallel competition?
An imitative business that competes locally with others in the same industry.
What is incremental inoovation?
an overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas.
What is pure innovation?
The process of creating new products or services, which results in a previously unseen product or service.
What is blue ocean strategy?
A strategy based on creating a new product or service which has no competitors.
What is a market?
the business term for the population of customers for your product or service.
What is scale?
A characteristic of a market that describes the size of the market a mass market or a niche market.
What is scope?
a characteristic of a market that defines the geographi crange covered by the market from local to global.
What is mass market?
A customer group that involves large portions of the population
What is niche market?
A narrowly defined segment of the population that is likely to share interests or concerns.
What are four types of customers?
corporate, loyal, local, passionate
What is a perceptual map?
A graphic display which positions products, services, brands or companies according to their scores or important strategic dimensions.
What are industry dynamics?
Changes in competitors, sales and profits in an industry over time.
What is the introduction stage?
the life cycle stage in which the product or service is being invented and initially developed.
What is the growth stage?
An industry life cycle stage in which customer purchases increase at a dramatic rate.
What is a boom?
A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time.
What is a shake-out?
A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry.
What is the maturity stage.
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.
What is the decline stage?
A life cycle stage in which sales and profits of the firms in the industry begin a falling trend.
What is retrenchment?
An organization life cycle stag in which established firms must find new approaches to improve the business and its chances for survival.
What is industry analysis(IA)?
A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends.
What is gross profit?
funds left over after deducting the cost of goods sold.
What is net profit?
The amount of money left after operating expenses are deducted from the business.
What is profit before taxes?
The amount of profit earned by a business before calculating the amount of income tax owed.
What are generic strategies?
Three widely applicable classic strategies for businesses of all types; differentiation, cost, and focus.
What is a differentiation strategy?
A type of generic strategy aimed at clarifying how one product is unlike another in a mass market.
What is a cost strategy?
A generic strategy aimed at mass markets in which a firm offers a combination of cost benefits that appeals to the customer
What is a focus strategy?
A generic strategy that targets a portion of the market, called a segment or niche.
What is an entry wedge?
An opportunity that makes it possible for a new business to gain a foothold in a market.
What is a competitive advantage?
the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry.
What are strategic actions?
Competitive responses requiring a major commitment of resources.
What are tactical actions?
competitive responses with low resource requirements.
