ELEC Finals: Selecting a Way of Going into Business and Strategic Management

Comprehensive vocabulary flashcards covering ways of starting a business, environmental analysis, MSME support programs in the Philippines, strategic management stages, and modern business trends/consumer trends.

Buying an Existing Business

A way of going into business where the enterprise is already set up, offering a proven track record, established clientele, and existing facilities, though it may carry risks like a poor record or ill will.

Proven Track Record

An advantage of buying an existing business where the buyer is assured the business performs well based on its documented history.

Established Clientele

One of the hardest assets to acquire, referring to loyal customers who already trust the existing business.

Starting a Business from Scratch

An approach where the entrepreneur does all the work of establishing the enterprise, providing freedom to make decisions and choose location, but facing disadvantages like no record and difficulty in obtaining loans.

Franchise

A legal agreement or contract between a company (franchisor) and an entrepreneur (franchisee) where the entrepreneur is permitted to sell the franchisor's goods or services in a certain area.

Franchisor

The company that grants the use of its name and provides assistance to the entrepreneur in a franchise agreement.

Franchisee

The entrepreneur who pays fees to a company to use their name and sell their goods or services.

External Environment

Composed of dimensions in the broader society, including demographic, economic, political/legal, sociocultural, technological, and global segments, that influence an industry and its firms.

Scanning

An external environment analysis method that entails the study of all segments to identify early signals of potential changes.

Monitoring

An analysis method where the firm observes environmental changes to see if an important trend is emerging from those spotted during scanning.

Forecasting

The development of feasible projections regarding what might happen, and how quickly, based on detected trends and changes.

Assessing

Determining the timing and significance of the effects of environmental changes and trends on the strategic management of a firm.

Internal Environment

The conditions existing within a business organization, including internal strengths and weaknesses that provide a basis for establishing objectives and strategies.

Tangible Resources

Visible assets, such as borrowing capacity and the status of plant and equipment, whose value can be established through financial statements.

Intangible Resources

Assets that are less visible and more difficult for competitors to understand or imitate, such as human intellect and organizational knowledge.

Capabilities

A firm's capacity to deploy resources that have been purposely integrated to achieve a desired end state; described as the 'glue' binding an organization together.

Core Competencies

Activities a company performs especially well compared to rivals, reflecting its personality and serving as a source of competitive advantage.

Niche Services

Small businesses that are seasonal or not always needed, which may not be profitable for large businesses but offer opportunities for MSMEs.

Seedbed

A nursery where seedlings grow; used to describe how MSMEs nurture beginner entrepreneurs before they transition to larger enterprises.

World Trade Organization (WTO)

The only international organization that deals with global trade rules between nations to ensure trade flows smoothly, predictably, and freely.

ASEAN

The Association of Southeast Asian Nations, which aims to accelerate economic growth and social progress through joint endeavors in Southeast Asia.

The AFTA

The ASEAN Free Trade Area, which lays out a comprehensive regional tariff reduction.

APEC

The Asia Pacific Economic Cooperation, premier in facilitating economic growth, trade, and investment in the Asia Pacific Region.

Republic Act No. 10644

Also known as the 'Go Negosyo Act', it promotes entrepreneurship by establishing Negosyo Centers in every province, city, and municipality.

The Pondo sa Pagbabago at Pag-asenso (P3) Program

A microfinancing program providing affordable loans with a $2.5\%$ monthly interest for entrepreneurs in the Philippines.

Shared Service Facilities (SSF) Project

A DTI program aimed at increasing MSME productivity by providing access to better machineries, tools, equipment, and technologies.

Republic Act No. 9501

Otherwise known as the 'Magna Carta for Micro Small Medium Enterprises', enacted to provide assistance programs to strengthen small businesses.

Business Opportunity

A process wherein individuals and organizations perceive opportunities for new products and services based on changes in knowledge or social/economic conditions.

Strategic Management

The art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Mission Statement

An enduring statement of purpose that depicts a company’s reason for existence and distinguishes it from similar firms.

Long Term Objectives

Specific results that an organization seeks to achieve in pursuing its basic mission.

Strategies

The means by which long-term objectives will be achieved; a unifying theme that gives coherence and direction to decisions.

Annual Objectives

Short-term milestones that organizations must achieve to reach long-term objectives.

Policies

The guidelines, rules, and procedures established to support efforts to achieve stated objectives.

High-Tech Firm

A firm that spends twice as much on research and development and employs twice as many technical employees as an average manufacturing firm.

Acquisition

A case where one firm (usually larger) buys another firm (usually smaller).

Merger

A collaborative consolidation of two firms that are usually similar in size.

Deregulation

The removal or easing of government-imposed laws or restrictions on business operations.

The Graying Work Force

The trend of many workers getting older in their jobs due to increased longevity and changes in retirement laws.

Productivity

A measure of economy or business success reflecting the efficiency with which a company uses resources to make products.

Trade Deficit

A situation where a country is importing more products than it exports.