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SMALL BUSINESS ENTREPRENEURSHIP FINAL NOTES (aced the test and got 96%)

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Department
Management
Course Code
MGT 4113
Professor
All

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SMALL BUSINESS ENTREPRENEURSHIP Chapter 7 SMALL BUSINESS STRATEGIES1What is a strategythe ideas and actions that explain how a firm will make its profitGood strategy leads to greater chances for survival and higher profits for small businessesWhat makes a strategy good is its fit to the particulars of your business and the resources you can bring to itPre strategy the first step of strategic planningThere are five initial key decisionsAs owner what do you expect out of the businessWhat is your product or service idea and its industryFor your product or service how innovative or imitative will you beWho do you plan to sell toeveryone or targeted marketsWhere do you plan to selllocally regionally nationally globally2What is entry wedgeAn opportunity that makes it possible for a new business to gain a foothold in a marketSome of these entry wedges areSupply shortagesoccur when a new product is in demandUnutilized resourcesUnutilized resources can be a physical resource like gravel in a farm field or even entire inner cities The key benefits are lower costs scale savings or organizational practicesCustomer contractingoccurs when a customer most often a business is willing to sign a contract with a small business to ensure a product or service The key benefits are quality delivery technology shopping ease brand reputationSecond sourcingsecond sourcing seeks out customers who are already being serviced by another firm The strategy is to offer customers a second place to obtain goods and services The key benefits are quality delivery technology shopping easeMarket relinquishmentoccurs when business firms leave a market Key benefits are placement shopping ease quality delivery and serviceFavored purchasing favored purchasing occurs because of government agencies government sponsored commercial contracts and many big businesses have policies that provide for set asides key benefits are quality delivery serviceGovernment rulesrule changes by the government can help small firms compete For example when the environmental protection agency let small construction firms out of some of the water pollution treatment requirements that large firms must face Key benefits are technology service and lower costs3What is an industryThe general name for the line of product or service being sold or the firms in that line of businessKey is selecting an industry that offers good potential for making a profitAlso needs to offer attractive opportunities to work with a minimum of risk and competitionImitation and innovation4What is an imitative strategyAn overall strategic approach in which the entrepreneur does more or less what others are already doing
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