Midterm 1 Flashcards
definition of entrepreneurship
the art of turning an idea into a business and then pursuing opportunities
what are the key elements to entrepreneurship?
opportunity, future, newness/innovative
what are the key abilities entrepreneurs need?
identify a key problem and create a solution for it
definition of idea
notion, thought, impression
definition of opportunity
something allows us to create a need for a new product, service, or business
what are the factors of a good opportunity?
- attractiveness
- timely
- durableness
- anchored to value-creating product/service
a __ cannot be useless but a __ can
opportunity, idea
what are the 4 opportunity trends
- economic forces
- social forces
- technological advances
- political / regulatory
what are some examples of economic forces that can impact an opportunity?
disposable income, change in consumer spending patterns
what are some examples of social forces that can impact an opportunity?
demographic changes, cultural changes, fashion/lifestyle changes
what are some examples of technological advances that can impact an opportunity?
new tech, advancing tech
what are some examples of political and regulatory forces that can impact an opportunity?
new laws and regulations, changes in political arena
why do some problems go unsolved?
- no market
- societal forces can mask a problem
- lack of imagination
- economic forces may make a problem acceptable
what is a social venture?
an opportunity that seeks to solve a social problem and provide a social good
what makes an entrepreneur able to recognize an opportunity?
- opportunity recognition
- industry experience
- cognitive differences (entrepreneurial awareness)
- non industry connections
- creativity (preparation, incubation, insight, evaluation)
what are the 4 stages of feasibility analysis?
- product / service feasibility
- industry /target market feasibility
- organizational feasibility
- financial feasibility
what are the two aspects of product / service feasibility that need to be looked at?
- desirability
- demand
what is desirability?
does it make sense, would people like it, does it take advantage of a trend?
what is demand?
talking face to face with potential customers, using online tools, library
what is a concept test?
write down basics of what you want to create and show it to people who would be able to judge it
what makes an industry more appealing?
- young
- early in their life
- fragmented
what are some aspects to look at when assessing an industry?
number of competitors, stage of industry life cycle, industry growth rate, importance of industry products
what makes a target market attractive?
no hyper competition, large enough to make money but small enough not to be full of competitors
what are some aspects to look at when assessing a target market?
barriers to entry, purchasing power of customers, ease of making customers aware of new product or service, growth potential of target market
what is organizational feasibility?
determines whether a business has sufficient management expertise, resources to launch, organizational competence
what are the two most important aspects of organizational feasibility?
- management prowess
- resource sufficiency
what is management prowess?
the passion the group / individual has and the extent to which they understand the target market
what is resource sufficiency?
availability of non financial resources
what are some important things to consider when looking at non financial resources?
IP protection, labor pool
what is financial feasibility?
overall financial attractiveness of the proposed venture
what are some key aspects of financial feasibility?
initial capital investment, number of revenue drivers, time to break even, financial performance of similar businesses, ability to fund initial product development, initial start up expenses, total start up cash needed, degree of risk, opportunity cost
what is a disruptive business model?
a model that does not fit in the norm (advertising, auction, franchise, freemium, low cost model, traditional retailer) yet it is impactful enough to change the way business is done in the industry
what is a new market disruption? examples?
addresses a market that wasnt previously served. google adword and cannon small printers
what is a low end market disruption? examples?
a firm in an industry improved to the point that they offer something better than what people need, an inferior low cost or a simple replacement. Southwest airlines
what is the difference between innovative and disruptive?
innovation improves current markets and disruption penetrates new markets
what are 4 aspects of the barringer / ireland business model template?
- core strategy
- resources
- financials
- operations
what are 4 aspects of the core strategy?
mission
basis of differentiation
target market
product / market scope
what are the qualifications for a mission ?
- describe the reason for being
2.. what makes company different - be risky and challenging but achievable
- use a tone that represents company culture / values
- convey passion
- be honest
what is a basis of differentiation?
explains why anyone would buy from our company over our competitors (ex: roller backpack relieves pain NOT available in 6 colors)
what is a target market?
segment within larger market who represents niche or underrepresented groups
what is the product / market scope?
a range that defines the products and markets on which a firm will concentrate
what are the two aspects of resources?
core competencies
key assets
what are core competencies?
specific factor/capability that sets the firm a part from its competitors and supports the business model
what are some examples of core competencies?
technical know how, expertise in a certain area such as product design, passion, high company morale
what are key assets?
assets that a firm owns and enables business model to work
what are examples of key assets?
equipment, vehicles, patents, trademarks, copyrights, cash, founders, key employees
what are the main components of financials?
- revenue streams
- funding
- cost structure
what is a revenue stream? examples?
describes how the firm will make money. examples: ads, commissions, subscriptions
what is a cost structure?
describes the most important costs incurred to support the business model
explain the threefold approach to making a cost structure
- identify whether business is cost or value driven
- identify nature of business costs
- identify businesses major cost categories
what does the operations address?
how will we produce, who will we work with, how do we deliver
what are the 3 aspects of operations?
- production
- channels
- key partners
what are examples of production?
how we deliver or make the product? do we have employees or contractors?
examples of channels
store, online shop, app, show room
