MIDTERM

Question 1

vision statement

Answer 1

outlines where you want to be, communicating the purpose and values of your business, providing an outline for your future goals

Question 2

mission statement

Answer 2

talks about how you will get to where you want to be, and what you do today

Question 3

business plan

Answer 3

a written description of your business’s future

Question 4

executive summary

Answer 4

a short document or section that summarizes a longer report or proposal or a group of related reports in such a way that readers can rapidly become acquainted with a large body of material without having to read it all

Question 5

3 types of strategy

Answer 5

differentiation, LCL (low-cost leader), focus (niche)

Question 6

differentiation

Answer 6

distinguishing of a process from or service from others

Question 7

LCL (low-cost leader)

Answer 7

low cost of operation; economizing efficiency, size, scale, scope, and cumulative experience

Question 8

focus (niche)

Answer 8

concentration on one or a few segments of the market

Question 9

tactics

Answer 9

methods used to implement a strategy

Question 10

V = A / P

Answer 10

value = attributes / price

Question 11

R - C = P

Answer 11

revenue - cost = profit

Question 12

research & development

Answer 12

investigative work directed towards the innovation, introduction, and improvement of products and processes

Question 13

product R&D

Answer 13

pertains to a consumer good, namely to its price, quality, and safety

Question 14

process R&D

Answer 14

pertains to the means by which the consumer good is being made, including working conditions, and treatment of products and labor

Question 15

mechanistic organization

Answer 15

hierarchical and bureaucratic; characterized by (1) highly centralized authority, (2) formalized procedures and practices, and (3) specialized functions

Question 16

organic organization

Answer 16

characterized by (1) “horizontal” communications and interactions, (2) low specialization (knowledge resides wherever it is most useful), and (3) decentralization (great deal of formal and informal participation in decision making)

Question 17

law of diffusion of innovation

Answer 17

a form of statistical analysis that explains how, why, and what rate new ideas and technology spread through culture

Question 18

categories of adopters

Answer 18

innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%), laggards (16%)

Question 19

the golden circle

Answer 19

relative to the law of diffusion of innovation; illustrates that many people know what they do, but fewer people know how, and even fewer know why

Question 20

to calculate gross profit…

Answer 20

subtract your total income by your total COGs

Question 21

EBITDA

Answer 21

Earnings before Interest, Taxes, Depreciation, and Amortization

Question 22

line of credit

Answer 22

an arrangement between a financial institution and a customer that establishes a maximum loan balance that the bank will permit the borrower to maintain

Question 23

break-even analysis

Answer 23

used to calculate a margin safety; R - C > 0

Question 24

L + SE = A

Answer 24

liabilities + shareholder equity = assets

Question 25

to calculate profits & losses…

Answer 25

gross profit subtracted by overhead

Question 26

general environment

Answer 26

factors that affect a firm’s strategy

Question 27

6 factors of general environment

Answer 27

demographic, sociocultural, political/legal, technological, economic, and global

Question 28

mitigation

Answer 28

neutralization

Question 29

Porter’s five forces

Answer 29

threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitutes, and rivalry among competitors

Question 30

value chain analysis

Answer 30

a strategic analysis of an organization that uses value-creating activities

Question 31

primary activities of a value chain

Answer 31

inbound/outbound logistics, operations, marketing and sales, and service

Question 32

support activities of a value chain

Answer 32

procurement, tech development, human resources, and general admin

Question 33

RBV (resource-based view)

Answer 33

perspective that firms’ competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute

Question 34

tangible resources

Answer 34

physical assets, financial resources, organizational resources, and technological resources

Question 35

intangible resources

Answer 35

unique routines and practices, human resources, innovation resources, and reputation resources

Question 36

SWOT analysis

Answer 36

a framework for analyzing a company’s internal and external environment (strengths, weaknesses, opportunities, and threats)

Question 37

3-of-7 7s HARD elements

Answer 37

strategy, structure, and system

Question 38

4-of-7 7s SOFT elements

Answer 38

shared values, skills, style, and staff

Question 39

experience curve

Answer 39

expresses a relationship between equations for experience and efficiency or between efficiency gains and investment in the effort; its application is based on the complex process of the human mind to develop, and its benefits or drawbacks to a firm

Question 40

the Wal-Mart Effect

Answer 40

the economic impact felt by local businesses when a large firm opens a location in the area, forcing smaller retail firms out of business and reducing wages for competitors’ employees