Test 1 Flashcards
a person who undertake a business or an enterprise with the chance of profit or loss, success or failure; a person or group that engages in the initiation and growth of a purposeful enterprise for the production of goods and services
entrepreneur
a call to respond to a difficult task and the commitment to undertake the required enterprise
challenge
a timely and favorable junction of circumstances providing a good chance for a successful venture or progress; an auspicious chance of an action occurring at a favorable time
opportunity
the identification and exploitation of previously unexploited opportunities by enterprising individuals; the nexus of enterprising individuals and promising opportunities
entrepreneurship
4 steps to starting a business
- the founding team or individual has the necessary skills or acquires them 2. the team members identify the opportunity that attracts them and matches their skills; they create a solution to match the opportunity 3. acquire or possess the financial and physical resources necessary to launch the business 4. complete an arrangement or contract with their partners, investors, and within the founder team to launch the business and share the ownership and wealth created
the study of production, consumption, and distribution of goods and services; also the study of how society manages its scarce resources
economics
a system that produces and distributes goods and services
economic system
the quantity of goods and services produced from the sum of all inputs, such as hours worked and fuels used
productivity
those features of nature, such as minerals, fuels, energy, biological yield, or pollution absorption capacity, that are directly or indirectly utilized or potentially utilizable in human social and economic systems
natural capital
financial assets such as money, bonds, securities, land, patents, and trademarks
financial capital
the sum of knowledge assets of an organization; sources are human, organizational, and social capital
intellectual capital
the combined knowledge, skill, and ability of the people in the enterprise
human capital
an enterprise’s management processes, work procedures, information technologies, and communication methods
organizational capital
the quality of relationships with a firm’s suppliers, allies, partners, and customers; refers to the resources available in and through personal and organizational networks
social capital
a combination of entrepreneurial competence and commitment
entrepreneurial capital
the ability to (1) recognize and envision taking advantage of opportunity and (2) to access and manage the necessary resources to take advantage of the opportunity
entrepreneurial competence
a dedication of the time and energy necessary to bring the enterprise to initiation and fruition
entrepreneurial commitment
the process of wealth creation characterized by the dynamics of new, creative firms forming and growing and old, larger firms declining and failing
dynamic capitalism
the creation of new industrial structures and companies and the destruction of older structures
creative destruction
the constant change of factors in an economy
dynamic disequilibrium
rising output per worker comes from two sources
new technology
smarter ways of doing work
devices, artifacts, processes, tools, methods, and materials applied to industrial and commercial purposes
technology
four categories of an entrepreneurial venture
radical innovation, incremental changes, imitation, or rent-seeking behavior (use of regulation, standards, or laws to appropriate some of the value of a monopoly)
the ability to create change or transform organizations; a real measure of this is the ability to acquire needed new skills as the situation changes
leadership
potential entrepreneurs must be careful to do an honest assessment of their
motivation and skills
is the engine of economic growth
entrepreneurship
a good entrepreneur can look at a challenge and pick out the
opportunity
identify problems by
focusing on situations where a potential customer experiences significant “pain”
process of identifying opportunity
pain storming
five steps of pain storming
- identify a particular customer
- describe what the customer does/wants to accomplish
- identify pain points/emotions that accompany problem
- select the biggest pain point and root cause of customer’s problem
- identifies the assumptions behind this root cause
technology push
start with the solution rather than the problem and find applications
market pull (or demand pull)
begins with the market need and builds solution
ETC
express and idea
test it
cycle and refine
9 categories of opportunity
- increasing the value of a product or service 2. new applications of existing means or technologies 3. creating mass markets 4. customization for individuals 5. increasing reach 6. managing the supply chain 7. convergence of industries 8. process innovation 9. increasing the scale of the firm
a process of customer discovery, validation, and creation that leads to company building
customer development
data collected for your specific proposed venture
primary data
a popular form of primary research
focus group
4 steps of customer development
- identify customers
- build repeatable sales roadmap
- customer creation- work to build initial sales relationships
- transition from learning and discovery to formal organization
naivete is a gift, select extreme users like children, have people from many backgrounds
observation effectiveness
developing enterprises based on quick product cycles and adaptive learning
lean startup
product with the minimum features to solve the problem and obtain customer feedback
minimum viable product (MVP)
an invention that has produced economic value in the marketplace; the commercialization of new technology
innovation
an innovation that is a faster, better, and/or cheaper version of an existing product
incremental innovation
a change in how components of a product are linked together while core design concepts are left untouched
architectural innovation
an innovation that uses new components and modules, but does not disrupt the linkages between modules
modular innovation
a business based upon a radical innovation seeks to commercialize; uses new modules and new architecture to create new products
radical or disruptive innovation
sources of innovation
universities, research labs, individual investors, end users
an innovation that is the product of many firms and individuals working together under a common goal and an agreed-to governance system
open source innovation
one of the most important trends lies with
the globalization of business
opportunities often lie at the intersection of
social and technological change
the coming together or merging of several technologies or industries thought to be different or separate
convergence
5 characteristics of an attractive opportunity
timely solvable important profitable context (favorable regulatory and industry situation)
the value (cost) of the forgone action
opportunity cost
PRRR process
plan, run, review, revise
the steps towards creating a business model
- create a vision
- write a mission statement
- state the value proposition
- create the business model
an informed and forward looking statement of purpose in response to an opportunity
vision
describes a specific desired outcome and promotes action by inspiring people to achieve the desired outcome
elements of a vision
clarity
consistency
uniqueness
purpose
more completely describes the organization’s goals and customers while incorporating the basic tenets of the vision statement; description of the action to implement the vision
mission statement
possible elements of a mission statement
core values, customers and/or stakeholders, products, competitive advantage, values provided to customer, markets or industry
summarizes the values offered to the customer
value proposition
a short version of a firm’s value proposition often used a slogan or summary phrase to explain the key benefits of the firm’s offering versus that of a key competitor
unique selling proposition
five values offered to a customer
product, price, access, service, and experience
a set of planned assumptions about how a firm will create value for all its stakeholders
business model
elements of a business model
- customer selection 2. value proposition 3. differentiation and control 4. scope of product and activities 5. organizational design 6. value capture for profit 7. value for talent
nine building blocks of the business model canvas
- value propositions 2. customer segments 3. channels to reach customers 4. customer relationships 5. revenue streams 6. key resources 7. key activities 8. key partnerships 9. the cost structure
blank signal that a firm’s business model should change
changing market conditions
a plan or road map of the actions that a firm or organization will take to achieve its mission and goals
strategy
the essence of strategy is
choosing the priorities and deciding what to do and what not to do
the unique capabilities and resources that enable a firm to implement its business model and thus deliver a valuable product or service to its customers
core competencies
a group of firms producing products that are close substitutes for each other and serve the same customers
industry
four stages of industry life cycle
emergence, growth, maturation, and decline
a design whose major components and underlying core concepts do not vary substantially from one product model to another and that commands a high percentage of the market share for the product
dominant design
growth stage emerges when this becomes clear and emerges
a framework that identifies five forces that determine the profit potential of an industry and shape a firm’s competitive strategy
the five forces model
what are the five forces
- threat of entry by new competitors
- threat of substitute products
- bargaining power of customers
- bargaining power of suppliers
- firm rivalry
a product that improves or perfects another product
complement
- a firm’s strengths 2. its weaknesses 3. opportunities 4. the threats in its competitive environment
SWOT analysis
whatever keeps a firm from entering an industry or market
barriers to entry
many business use competitive strategies to shape their business strategies but often ignore
cooperative strategies
three types of competitive tactics
position (establish a position and defend it), resources (leverage resources such as brands, patents, or assets), and emergent (pursue emerging opportunities
the value of an economy and the associated standard of living
economic capital
the quality of life on our planet depends on three factors
depends on equity of liberty, opportunity, and health and the maintenance of community and households (also economic capital, social capital, and natural capital)
four common types of strategies to maintain a competitive advantage
differentiation, low cost, differentiation and cost, niche
unique offering based on a firm’s unique competenciesf
differentiation
complex mix of competition and cooperation
coopetition
steps to establish a new enterprise
- identify and screen opportunities, create a vision and concept statement and build core entrepreneurial team 2 .refine the concept, determine feasibility, prepare mission statement 3. prepare a complete business plan 4. determine amount of financial, physical and human resources required 5. secure the necessary resources and capabilities from investors
elements of concept summary
- explain the problem or need and identify the customer 2. explain the proposed solution and uniqueness of the solution 3. tell why the customer will pay for the solution
a document that describes the opportunity, product, context, strategy, team, required resources, financial return, and harvest of a business venture
business plan
the identification and acquisition of blank and blank are crucial for the a firm’s success
required resources and capabilities
a short version of the venture story that quickly demonstrates that the entrepreneurs know their business and can communicate it effectively
elevator pitch
common business plan mistakes 1
(1) 1. solutions looking for a problem
2. unclear model or value proposition
3. incomplete competitor analysis and marketing
4. inadequate description of risk
5. gaps in capabilities required of them
common business plan mistakes 2
(2) 6. inadequate description of revenue and profit drivers
7. limited or not description of metrics
8. lack of focus and sound mission
9. too many top down assumptions
10. limited confirmation of customer demand
storytelling techniques
simple message, concrete images and examples, generate interest by exposing gaps and filling them in, demonstrate passion
a set of activities with the object of securing, serving, and retaining customers for the product offerings (all about getting the right message to the right customers)
marketing
describes how they will take the product to market, attract, serve, and maintain customers
marketing plan
deliver information and product/service
new venture to target customers
deliver information and money
target customers to new venture
a group with similar needs or wants who reference each other
market segment
divides markets into segments that require different marketing strategies
market segmentation
helps define the positioning and focus on a few key attributes of value proposition
positioning statement
the perceived worthiness of the brand
brand equity
dimensions of brand equity
- brand awareness
- perceived quality and vitality of the product
- brand association
- brand loyalty/tie to product
marketing mix
product, price, place, promotion
the item or service that serves the needs of the customer
product
method for setting prices for various customer categories and volume discount plans
pricing policies
high price high quality
premium pricing
low price low quality
bargain pricing
low price high quality
value pricing
websites, social networks, print media, tv, radio
media advertising
building knowledge of product through word of mouth
viral marketing
customer relationship management
a set of conversations that consist of
- economic exchanges
- product offering
- space in which exchange takes place
- context
process by which innovations spread through a population
diffusion of innovation
follows an s curve
adoption of innovation
large gap between early adopters and early majority
chasm
