study Flashcards
what is a business plan
a written doc that explains every aspect of a new business venture
explain how a business plan helps internally
roadmap for executing strats, forces founders to sit down and plan everything out
explain how a business plan helps for external stakeholders
introduces possible investments, increases new venture credibility, shows that the company is viable and realistic
why do businesses create business plans?
to clarify strategy, attract investors, gain credibility, develop operational plans, and compete effectivley
what are the sections of a business plan?
executive summary
company description
industry analysis
market analysis
marketing plan
management team/company structure
operations plan
product/service
design/develop.
financial projections
what are the 4 generic strategies for gaining comp. adv.?
- cost leadership
- differentiation
- cost focus
- differentiation focus
what is cost leadership. example?
A strategy where a business aims to be the lowest-cost producer in its industry while serving a broad market. ex: walmart
what is differentiation? ex?
A strategy where a business offers unique products or services that are hard to replicate. ex: apple
What is cost focus? ex?
A strategy where a company keeps costs low but targets a niche audience. ex: in n out
What is differentiation focus? ex?
A strategy where a company offers unique, high-end products to a niche audience. ex: lamborghini, prada
What are the three main financial statements in a business plan?
- income statement
- balance sheet
- cash flow statement
what does an income statement show ?
shows profit/loss over time
what does a balance sheet show?
shows assets, liabilities, and equity at a specific point in time
what does cash flow statement show?
tracks cash inflows and outflows
what is a pro forma financial statement?
A financial projection based on expected future performance rather than past data.
What is break-even analysis?
A calculation that determines how many units a company needs to sell to cover its costs.
What is a marketing strategy?
A company’s plan for attracting, engaging, and retaining customers while differentiating itself from competitors.
Why is a marketing strategy important?
Identify target customers
Build brand awareness
Set pricing strategies
Optimize product placement
Improve customer retention
What are the key components of a marketing strategy?
- positioning
- differentiation
what is the marketing strategy - positioning?
how a company wants to be perceived relative to competitors
what is the marketing strategy - differentiation?
unique features that set the product apart
What is value-based pricing? ex?
Pricing based on what customers perceive as the product’s value, rather than production costs. Example: Luxury brands.
What is cost-based pricing?
Pricing based on production costs plus a markup. Example: Walmart, Ryanair.
What is a product attribute map?
A visual tool comparing two points of differentiation among competing products.
What is the Business Model Canvas?
describes what makes this business valuable by outlining its feasibility, desirability, and viability
explain feasibility
can we build it? can it be done reasonably?
explain desirability
do customers want it?
explain viability
can we generate value?
will it make money long term?
what are the three elements of business model canvas?
- value
- customers
- cost/revenue
explain the value element in the business model canvas
value prop, what problem do we solve
explain customers element in business model canvas
channels, market segments, relationships
explain the cost/revenue element of the business model canvas
most important costs, what resources are most expensive, are we cost driven or value driven, what value are people willing to pay at
What is sustainability in business?
Meeting present needs without compromising future generations’ ability to meet theirs.
What is greenwashing?
Misleading consumers about a product’s environmental benefits.
What is the FTC Green Guide?
A set of guidelines by the Federal Trade Commission (FTC) to prevent deceptive environmental marketing claims.
what is a NAICS code?
6 digit numerical code used by businesses/government to classify industries
what is a concentrated industry?
dominated by a few large firms
what is a fragmented industry?
large number of similar companies
what is market segmentation?
breaking up market into subsets that behave in same way/have same needs
ways to segment the market
geographically, demographically, psychographically, behaviorally, product type
what are direct competitors? ex?
similar products/ services ex: coke and pepsi
indirect competitors ex?
close substitutes, ex: water and milk and soda
what are future competitors? example?
businesses that could move into direct or indirect competition. ex: clover milk launching soda line
def of operations model
approach for making just one of what we are selling
def of operations plan
how businesses will be run/how products will be produced
what are the ways to frame your operations plan?
- backstage, frontstage
- day in the life
- operations flow diagram
what is backstage/frontstage?
backstage = behind the scenes
frontstage = what customers experience
what is day in the life ops plan framing?
visualizing what a typical day looks like for a business
what is an ops flow diagram?
visual representation of how everything works
examples of ops strategy
in-house or outsource
explain what a development plan is
making something that doesn’t exist yet, describing the current state of development, risks/challenges of that, and costs associated with it
what can a patent protect
methods or innovations
what can a trademark protect?
name/symbol
what can copyright protect?
expression of something (song, movie)
what is a trade secret?
Avoid disclosure altogether, which gives owners a competitive advantage in the marketplace
what elements of a business plan would be found in the operations plan?
- operations model and procedures
- business location
- facilities and equipment
- operations strategy and plans
What is the difference between a goal and a strategy?
A goal is an objective (e.g., increase sales), while a strategy is how to achieve it (e.g., targeting a new customer segment).
What is the “value stick” framework?
A way to visualize competitive advantage by increasing customer willingness to pay or decreasing supplier costs.
What is the “corridor principle”?
The idea that entrepreneurs discover new opportunities as they progress in their ventures.
