New Venture Strategies - Test 1

Entrepreneurship

The process by which individuals pursue opportunities without regard to resources they currently control.

Entrepreneur

An individual who discovers and pursues opportunities to create value.

One of the primary reasons people become entrepreneurs exemplified by Sam Walton (Walmart) and Gordon Moore (Intel)

desire to be their own boss and Desire to pursue their own ideas

Financial rewards (secondary)

One of the primary reasons people become entrepreneurs.

Passion for the Business

The number one characteristic shared by successful entrepreneurs, stemming from the belief that the business will positively influence people's lives.

Tenacity Despite Failure

A defining characteristic of successful entrepreneurs, showing their ability to persevere through setbacks and failures.

Execution Intelligence

The ability to fashion a solid business idea into a viable business, a key characteristic of successful entrepreneurs.

Women Entrepreneurs

In 2013, women-owned businesses generated over $1.3 trillion in revenue and employed nearly 7.8 million people.

Minority Entrepreneurs

There has been a substantial increase in minority entrepreneurs in the United States, with eight million minority-owned firms in the country.

Senior Entrepreneurs

The numbers of seniors starting businesses is substantial and growing, with individuals aged 62 and older showing an increased interest in entrepreneurship.

Opportunity

A favorable set of circumstances that creates the need for a new product, service, or business idea.

Window of Opportunity

The time period in which an entrepreneur or firm can realistically enter a new market and generate profits.

Observing Trends

The approach to identifying opportunities by studying how trends create opportunities for entrepreneurs.

Economic Forces

Forces that affect consumers' disposable income and can create business opportunities.

Social Forces

Trends that alter behavior and priorities, providing opportunities for new businesses.

Technological Advances

Rapid changes in technology that entrepreneurs must keep up with to identify business opportunities.

Political & Regulatory Changes

Changes in laws and regulations that form the basis for new business opportunities.

Solving a Problem

Identifying a problem and finding a way to solve it as an approach to generating ideas and opportunities.

Gaps in the Marketplace

Identifying opportunities by finding a market gap where a product or service is needed by a specific group of people.

Prior Industry Experience

Experience in an industry that helps entrepreneurs recognize business opportunities.

Cognitive Factors

 Innate skills or cognitive processes that aid in opportunity recognition, such as entrepreneurial alertness.

Social Networks

The extent and depth of an individual's social network that affects opportunity recognition.

Brainstorming

A technique used to generate a large number of ideas and solutions to problems quickly.

Focus Group

A gathering of people with common characteristics to gain insight into specific issues, including generating new business ideas.

Feasibility Analysis

The process of determining whether a business idea is viable, providing a preliminary evaluation to decide if the idea is worth pursuing.

Product/Service Feasibility Analysis

Assessment of the overall appeal of the product or service being proposed, including concept testing and demand testing.

Buying Intention Survey

A survey to assess the likelihood of buying a product or service and the price customers are willing to pay.

Industry/Market Feasibility Analysis

Assessment of the overall appeal of the market for the product or service being proposed, considering industry attractiveness, market timeliness, and niche market identification.

Porter's 5 Forces

1. Framework for industry analysis including the bargaining power of buyers and suppliers 2. intensity of competition 3. barriers to entry 4. substitutes 5. market growth.

Organizational Feasibility Analysis

Evaluation of whether the business has the necessary skills and resources to bring a product or service idea to market successfully, focusing on management prowess and resource sufficiency.

Financial Feasibility Analysis

 Quick financial assessment focusing on total start-up cash needed, financial benchmarks of similar businesses, and the overall attractiveness of the proposed venture.

Feasibility Templates

Templates available from the Small Business Administration (www.sba.gov) and SCORE (www.score.org) for conducting feasibility analyses.

Industry analysis

The examination of the economic and market factors that influence the success of firms within a specific industry.

Porter's Five Competitive Forces

A framework that analyzes the competitive intensity and attractiveness of an industry based on five factors: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitutes, and rivalry among existing firms.

Industry life cycle theory

A concept that describes the stages an industry goes through from introduction to decline and the strategies firms can employ at each stage.

Industry

A group of firms producing similar products or services, such as airlines, fitness drinks, furniture, or electronic games.

Firm-Level Factors

Factors including a firm's assets, products, culture, teamwork among employees, reputation, and other resources.

Industry-Level Factors

Factors including threat of new entrants, rivalry among existing firms, bargaining power of buyers, and related industry dynamics.

Returns On Invested Capital (ROIC)

A metric used to evaluate the efficiency of a company in generating profits from its capital investments.

Porter's Five Forces Model

A framework for industry analysis that assesses the competitive forces within an industry.

Rivalry Among Existing Firms

Competition among firms in an industry, influenced by factors like number of competitors, product differentiation, growth rate, and fixed costs.

Bargaining Power of Buyers

The ability of buyers to negotiate better terms, prices, or services from sellers, influenced by factors like buyer concentration, switching costs, and threat of backward integration.

Bargaining Power of Suppliers

The ability of suppliers to influence the terms, prices, or quality of goods or services, influenced by factors like supplier concentration, lack of substitutes, and threat of forward integration.

Threat of Substitutes

The risk posed by alternative products or services that could potentially replace or reduce the demand for a company's offerings.

Threat of New Entrants

The possibility of new competitors entering an industry, influenced by barriers to entry like economies of scale, customer loyalty, government policies, and access to resources.

Fragmented Industry

An industry characterized by a large number of small and medium-sized companies with low entry barriers and specialized customer needs.

Consolidation

The process of combining smaller companies in a fragmented industry to achieve cost efficiencies or differentiation.

Chaining

A method of consolidation in which companies form networks of linked merchandising outlets.

Franchising

A method of consolidation involving the licensing of a business's name, reputation, and skills to others in a specific area.

Shakeout

A stage in the industry life cycle where weaker firms fail, leading to industry consolidation.

Embryonic Industry

A stage in the industry life cycle characterized by limited market demand, product unfamiliarity, underdeveloped distribution channels, and high production costs.

Mature Industry

An industry with stable demand where firms focus on process and service innovations to maintain competitiveness.

Declining Industry

An industry experiencing reduced demand, prompting firms to seek leadership, niche markets, cost reduction, or exit strategies