Managment – Flashcards
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What is an opportunity?
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A favorable set of circumstances that creates a need for a new product, service or business.
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Understand the four essential qualities of opportunities
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1. Attractive 2. Timely 3. Durable 4. Anchored in a product service or business that creates or adds value for its buyer or end user.
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What is window of opportunity?
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The time period in which a firm can realistically enter a new market.
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According to the book, what are three ways to identify an opportunity?
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Observing trends Solving a problem Finding gaps in the market place.
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Understand the forces (economic, social, technological, legal) that entrepreneurs should observe to identify trends and opportunities
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Economic- state the economy level of disposable income consumer spending patterns Social forces- social and cultural trends demographic changes. What people think is "in". Technological Advances- New technologies emerging technologies, new uses of old technology. Legal- new changes in political arena, new laws and regulations.
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What is entrepreneurial alertness?
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- Ability to notice things withouth engaging in deliberate search.
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What is feasibility analysis?
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- The process of determining if a business idea is viable
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The proper sequence of events in developing successful business idea
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- Opportunity recognition, feasibility analysis, development of a business plan feasibility analysis, opportunity recognition, development of a business plan
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What are four areas of feasibility analysis discussed in the textbook? Understand each of them
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-product/service, industry/target market, organizational, financial feasibility.
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What is concept test?
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- Showing a preliminary description of a product or service idea.
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Elements of a concept statements discussed in the textbook?
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- A description of the product or service being offered. - The intended target market. - The benefits of the product or service. - A description of how the product will be positioned relative to similar ones in the market. - A description of how the product or service will be sold and distributed. - Information about the founder or founders of the firm.
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What are two components of industry/market feasibility analysis?
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- All 3 components: Industry attractiveness, market timeliness, and the identification of a niche market.
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What are two primary issues to consider in organizational feasibility analysis?
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- Management prowess, resource sufficiency
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What are the most important issues to consider in financial feasibility analysis?
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- Total start-up cash needed, financial performance of similar businesses, overall attractiveness of the proposed venture.
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What is a business plan?
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- Written narrative, typically 25 to 35 pages long.
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Purposes for writing a business plan?
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- Describe what a new business intends to accomplish and how it intends to accomplish it.
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Have some ideas about business plan format. How should entrepreneurs structure their business plan?
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- Software Packages, Sense of Excitement, Content of the Business Plan, Types of Business Plans, Recognizing the Elements of the Plan May Change
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What is an executive summary of a business plan?
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- A short overview of the entire business plan; provides a busy reader with everything they need to know about the new ventures distinctive nature.
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What is industry analysis?
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- Business research that focuses on the potential of an industry.
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What is an industry?
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- A group of firms producing a similar product or service, such as music, fitness drinks, or electronic games.
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What is competitor analysis?
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- Detailed evaluation of a firm's competitors
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What is Five Forces Model and what is it for?
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- A framework developed by Michael Porter for understanding the structure of an industry.
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What is barrier to entry?
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- Condition that creates a distinctive way for a new firm to enter an industry.
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What are major sources of barriers to entry?
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- Economies of scale, product differentiation, capital requirements, cost advantages independent of size, access to distribution channels, government and legal barriers
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Factors that have a direct impact on bargaining power of suppliers
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- Supplier concentration, Switching cost, Attractiveness of substitutes, Threat of forward integration
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What is bargaining power of buyers?
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-Buyers can suppress the profitability of the industries from which they purchase by demanding price concessions or increases in quality.
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What is competitive intelligence?
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- Information that is gathered by a firm to learn about its competitors.
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What is business model? And what is business model innovation?
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A firms plan or diagram for how it competes uses resources, structures its relationships. - A business model that revolutionizes how a product is produced.
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What is a value chain?
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- String of activities that moves a product form the raw material stage, through manufacturing and distribution, and ultimately to the end user.
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What is the purpose of studying a product's or service's value chain?
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-By studying a product's or service's value chain, an organization can identify ways to create additional value and assess whether it has the means to do so.
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What are the four components of a firm's business model discussed in the book?
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- Core strategy, strategic resources, partnership network, customer interface.
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What is franchising?
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- Form of business organization in which a firm that already has a successful product or service.
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What are the two types of franchising?
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Product or Trade Name Franchising: An arrangement under which the franchisor grants to the franchisee the right to buy its products and use its trade name. - Business Format Franchising: An arrangement under which the franchisor provides a formula for doing business to the franchisee along with training, advertising, and other forms of assistance.
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What are the types of franchise agreements (individual, area, and mater)?
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Individual Franchise Agreement involves the sale of single franchise for a specific location. - Area Franchise agreement allows a franchise to own and operate a specific number of outlets in a particular geographic area. - Master Franchise allows to have the right to open and operate a specific number of locations in a particular area, also has the right to offer and sell and franchise to other people in its area.
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What is entrepreneurship?
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The process by which individuals pursue opportunities without regard to resources they currently control.
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What is corporate entrepreneurship?
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Established firms with an orientation to acting entrepreneurially.
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Understand entrepreneurial intensity
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A firm that ranges from highly conservative to highly entrepreneurial.
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What are the three primary reasons that people become entrepreneurs?
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1. Pursue their own ideas. 2. Realize financial rewards. 3. Be their own boss.
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What are the four characteristics of successful entrepreneurs?
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1. Passion for their business 2. Product/ customer focus 3. Tenacity despite failure 4. Execution intelligence
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What are the five common myths about entrepreneurs?
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1. Entrepreneurs are born not made 2. Entrepreneurs are gamblers 3. Entrepreneurs are motivated primarily by money 4. Entrepreneurs should be young and energetic 5. Entrepreneurs love the spotlight
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What are the three types of startup firms?
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1. Salary-substitute firms 2. Lifestyle firms 3. Entrepreneurial firms
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What are the four steps of the entrepreneurial process?
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1. Deciding to become an entrepreneur 2. Developing successful business ideas 3. Moving from an idea to an entrepreneurial firm 4. Managing and growing the entrepreneurial firm
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