Chapter 3 - Starting a small business

Question 1

What is opportunity recognition?

Answer 1

Identifying potential new products or services that may lead to promising business

Question 2

What is Entrepreneurial Alertness?

Answer 2

Readiness to act on existing, but unnoticed business opportunities

Question 3

What is a start up?

Answer 3

A new business venture created from scratch

Question 4

What is a Type A Idea?

Answer 4

Taking an existing product to a new market

Question 5

What is a Type B Idea?

Answer 5

Bringing a new technology to market

Question 6

What is a Type C idea?

Answer 6

Providing customers with a new or improved version of an existing product

Question 7

What are common sources of business inspiration?

Answer 7

Personal Experience, Hobbies, Accidental Discoveries and Eye on Change.

Question 8

What is an Inside-Out business analysis?

Answer 8

Looking at your own abilities first and thinking of new products or services you can take to market

Question 9

What is an Outside-In business analysis?

Answer 9

Looking at the needs of the marketplace first in order to determine how you can pursue those opportunities

Question 10

Define General Environment

Answer 10

The broad factors that influence most businesses in society

Question 11

Define Industry Environment

Answer 11

The factors that directly impact a firm and it’s competitors

Question 12

Define Competitive environment

Answer 12

The strength, position and likely moves/counter-moves of competitors

Question 13

Define Resources

Answer 13

Basic inputs a firm uses to conduct business

Question 14

Define tangible resources

Answer 14

Resources that are visible and easy to measure

Question 15

Define intangible resources

Answer 15

resources that are invisible and difficult to assess

Question 16

Define capabilities

Answer 16

the integration of the firms various resources that are deployed together to the firm’s advantage

Question 17

define competitive advantage

Answer 17

a benefit that exists when a firm has a product or service that is seen by it’s target market as better than those of competitors

Question 18

Define core competencies

Answer 18

Those capabilities that provide a firm with a competitive edge and reflect it’s personality

Question 19

What is a SWOT analysis?

Answer 19

An assessment that provides a concise overview of a firms strategic situation

Question 20

What is a strategy?

Answer 20

A plan of action that coordinates the resources and commitments of an organization to achieve superior performance

Question 21

Define cost-based strategy

Answer 21

A plan of action that requires a firm to hold down it’s costs so that i can charge lower prices and still profit

Question 22

Define differentiation based strategy

Answer 22

A plan of action to provide a product/service with unique attributes that are valued by customers

Question 23

Define Focus Strategy

Answer 23

A plan of action that isolates an enterprise from competitors by targeting a restricted (niche) market segment

Question 24

Define strategic decision

Answer 24

A decision regarding the direction a firm will take in relating to its customer and competitors

Question 25

Define Feasibility Analysis

Answer 25

A preliminary assessment of a business idea that gauges whether or not the venture is likely to succeed

Question 26

What is a fatal flaw

Answer 26

a circumstance or development that could render a new business unsuccessful

Question 27

what are the 3 elements of business success?

Answer 27

Market potential, attractive industry and capability of the team/manager

Question 28

What is a sustainable competitive advantage?

Answer 28

A value-creating industry position likely to endure over time.

Question 29

What are potential fatal flaws?

Answer 29

Market potential, power of competitors, strength of competitive advantage, start-up costs and management capabilities