EEE 370 – Flashcards
Unlock all answers in this set
Unlock answersquestion
how do entrepreneurs identify new business opportunities?
answer
entrepreneurs will look for a gap in the industry, observe trends, or solve a problem.
question
What is the proper sequence of events in developing successful business ideas?
answer
opportunity recognition, business concept, feasibility analysis, development of business plan, business concept
question
The five competitive forces determine
answer
The average rate of return or profitability for the firms in the industry
question
revolutionizes how products are sold in an industry
answer
business model innovation
question
core components of a business model
answer
how does it create value? for whom does it create value? what are the advantages? how does the company differentiate itself? how will the firm make money? time, scope and size ambitions?
question
four essential qualities of an opportunity
answer
economic feasibility, market gaps, social environment, technological environment
question
opportunity
answer
A favorable set of circumstances that creates a need for a new product, service, or business.
question
Most important trends
answer
economic forces, social forces, technological advances, political action and regulatory change
question
Feasability analysis
answer
people do feasibility analysis to have a sound basis of the idea they want to pursue.
question
progression of a start up
answer
idea, opportunity, business concept, feasibility, business model, business plan.
question
product/service desireability
answer
does it make sense? is it reasonable? is it something consumers will be excited about? is it a good time to introduce the product/service? is there a target market? are there flaws in the design or concept?
question
buying intentions survey
answer
how to establish a product/service desireability
question
4 elements of a business concept
answer
product/service, customer definition, value proposition, distribution channel
question
concept questions
answer
what is the product/service offered? who is the customer? what is the benefit? how do you get the product or service to the customer?
question
features vs. benefits
answer
benefits encourage the customer to purchase from you
question
bootstrapping
answer
saving money through creativity, thriftiness or any means necessary (rent, borrow, beg, salvage)
question
five competitive forces
answer
threat of substitutes, threat of new entrants, rivalry among existing firms, bargaining power of suppliers, bargaining power of buyers.
question
threat of substitutes
answer
if available products are essentially equivalent, it pushes selling price down.
question
threat of new entrants
answer
if an industry is profitable, it will attract firm entry.
question
rivalry of existing firms
answer
factors determine how intense competition is
question
bargaining power of suppliers
answer
factors determine how much leverage your suppliers have to put pressure on you
question
switching costs
answer
fixed costs that buyers encounter when switching or changing from one supplier to another.
question
threat of forward integration
answer
the power of a supplier is enhanced if there is a credible possibility that the supplier might enter the buyer's industry.
question
bargaining power of customers
answer
factors determine how much leverage customers have to put pressure on you to lower your selling price of products
question
income statement
answer
records all of a firm's revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss.
question
balance sheet
answer
a snapshot of a company's assets and liabilities and owner's equity at a specific point in time.
question
pro forma income statements
answer
projections for future periods based on forecasts
question
effectual reasoning
answer
begins with a given set of means, allows goals to achieve over time through creativity.
question
Causal reasoning
answer
predetermined goal. Takes the most optimal and efficient path to get to that goal.
question
three categories of means
answer
who they are, who they know, what they know.
question
business valuation
answer
a process and a set of procedures used to determine the economic value of an owner's interest in a business.
question
economic trends
answer
help determine areas that are ripe for new start ups
question
social forces
answer
aging of baby boomers, increasing diversity in workplace, increase in social network users, increasing interest in green products
question
technological advances
answer
advances in technology create new business opportunities
question
political action and regulatory changes
answer
companies created to help other companies comply with a specific law
