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MGT 3806- Midterm Exam Guide - Comprehensive Notes for the exam ( 19 pages long!)


Department
Management
Course Code
MGT 3806
Professor
M I K E M A D O R E
Study Guide
Midterm

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UofL
MGT 3806
MIDTERM EXAM
STUDY GUIDE

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Chapter 3: Evaluation of a business opportunity
ENTREPRENEURIAL PROCESS
Ideas
Sources of New Ideas
Occupations
Hobbies
Drawing from experiences
Observations
Existing Products & Services
Deliberate Searches
QUALITATIVE ASSESSMENT OF BUSINESS OPPORTUNITIES
Goals: financial and status goals
Content of Work: physical labour, customer service
Lifestyle
Capabilities
Good health, management fundamentals, financial base
Experience
OPPORTUNITY ASSESSMENT
i. What products or service will the business provide? Value?
ii. How will you enter the market? Competitive advantage?
iii. Who are your customers? Why buy from you?
iv. Review Marco environmental factors especially.
v. How will you market your product/service?
vi. Who are your suppliers? Will they want to work with you?
vii. What will your startup costs be? Where will you get startup funds?
BREAKING INTO THE MARKET
Three Ways
offer a totally new product
offer an existing product to a different market
offer a product or service similar to those existing in the same market
DEVELOPING A STRATEGIC COMPETITIVE ADVANTAGE
The Right Industry
Manger’s epertise is necessar
Manger is a leader ensures quality work and buy in of employees
Smaller markets (not lucrative enough)
Flexibility (due to high growth, cyclical demand and perishable products)
More labour intensive
Less capital intensive
Government provides incentives
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The Right Business
Where are the best business opportunities?
Health care
Services for small business
Mobile business
Services that appeal to parents with children
Green products and services
The Right Aspect of the Business
So how will you make the business stand out?
Customer service
Innovation
Product quality
Selection
COLLECTION OF INFORMATION
Sources of Information
Secondary data
Primary data
observations
surveys
mail surveys, telephone surveys, personal interviews, focus groups
test marketing
QUANTITATIVE ASSESSMENT OF BUSINESS OPPORTUNITIES
Preparing the Feasibility Analysis
Step One - Calculate the Market Potential
Determine the market area and its population
Obtain revenue , (sales) statistics for the product or service in the area
Adjust the market potential total as necessary
Step Two - Calculate the Market Share
Retail Firm
1. Estimate the total amount of selling space in the market devoted to
the merchandise the new business will sell
2. Estimate the size of the proposed store
3. Calculate the market share based on selling space
4. Make adjustments to reflect any competitor strengths and weaknesses
regarding the proposed store
5. Multiply the revised market share percentage by the market potential
estimate obtained in step 1.
Step Three - Calculate Net Income and Cash Flow
Use revenue from step two
Come up with a list of expenses
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