Chapter Three Flashcards
Entrepreneurial alertness
Readiness to act on existing, but unnoticed, business opportunities
Good investment qualities
- Products that serve clear an important needs
- Products that customers know about
- Products that customers can afford
- good idea is not the same as a good opportunity
Motivations to start a business
- to develop a commercial market for new product or service
- wanting the challenge of succeeding (or failing) on your own
- to tap into unique resources that are available
- to avoid undesirable features of existing companies
Type A (New Market) Idea
Centered around providing customers with an existing product not available in their market
EX. Targeting the “new age” beverage market by selling soft drinks with nutritional value
Type B (New Technology) Idea
Involve new ideas, involve new technology, centered around providing customers with a brand-new product
EX.Using high-tech computers to develop a simulated helicopter ride
Type C (New Benefit) Idea
Centered around providing customers with an improved product
EX.Developing a personal misting device to keep workers cool
Serendipity
A facility for making desirable discoveries by accident
General environment
Encompasses factors influencing business in a society
Industry environment
Combined forces impacting a firm and its competitors
Competitive environment
Focus on the strength, position, and likely moves and countermoves of competitors in an industry
Resources
Basic inputs that a firm uses to conduct its business
Tangible resources
Visible and easy to measure
Intangible resources
Invisible, difficult to quantify
Capabilities
Integration of various organizational resources that are deployed together to the firms competitive advantage
Core competencies
Resources and capabilities that provide a firm with a competitive advantage over its rivals
SWOT analysis
Strengths, weaknesses, opportunities, and threats. Provides concise overview of firm’s strategic situation and helps identify opportunities that match the venture.
Strategy
Plan of action that coordinates resources and commitments of an organization to achieve superior performance
Strategic decision
Decision regarding the direction a firm will take in relating to its customers and competitors
Sustainable competitive advantage
Value creating industry position likely to endure overtime
Broad-based strategy
Seeking an advantage in cost or differentiation
Cost-based strategy
Requiring the firm to be the lowest cost competitor
Differentiation-based strategy
Emphasizing the uniqueness of the firms products or service
Focus strategy
Targeting a specific market slice (niche) using either a cost or a differentiation-based strategy
Feasibility analysis
A preliminary assessment of a business idea that gauges whether or not the venture envisioned is likely to succeed
Fatal flaws
A circumstance or development that in and of itself could render a new business unsuccessful
Opportunity recognition
Identification of potential new products or services that may lead to promising business
Pivot
To refocus or re-create a start up if the initial concept turns out to be flawed
