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ENTREPRENEUR > Midterms > Flashcards

Midterms Flashcards

1
Q

essential to an entrepreneur’s opportunity seeking

A

Entrepreneurial Mind Frame,

Heart Flame, and Gut Game

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2
Q

allows the entrepreneur to see things in a very positive and optimistic light in the midst of crisis or difficult situations.

A

entrepreneurial mind frame

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3
Q

also known as surging passion, refers to the entrepreneur’s fulfillment in the act and process of discovery.

A

entrepreneurial heart flame

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4
Q

also known as intuition, refers to the ability of the entrepreneur to sense without using the five senses.

A

entrepreneurial gut game

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5
Q

Macro Environmental Sources of Opportunities

A
  1. Socio-cultural Environment2. Political Environment3. Economic Environment4. Ecological Environment5. Technological Environment
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6
Q

Industry Sources of Opportunities

A

Participants in and industry include:
Rivals or competitors in a particular type of business. True rivals or competitors are those competing for the same or similar markets.
Suppliers of input to rivals as well as suppliers of machinery and equipment, suppliers of manpower and expertise, and supplies of merchandise.
Consumer market segments being served by rivals or competitors.
Substitute products or services, which customers shift or turn to.
All other support and enabling industries.

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7
Q

Micromarket

A

refers to the specific target market segment of a particular enterprise.

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8
Q

Consumer Preferences, Piques, and Perceptions

A

Consumer preferences refer to the tastes of particular groups of people. In contrast, consumer dislikes refer to the things that irritate customers. Either way, the entrepreneur can explore opportunities brought about by consumer preferences or dislikes.

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9
Q

Other Sources

A

Another potential source of opportunity is the entrepreneur’s own set of skills or expertise, or hobby.

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10
Q

New knowledge as well as new technology can be the source of highly innovative opportunities.

A

Customer preferences change over time.
People’s tastes in clothes, music, shoes, entertainment, dance, sports, hobbies, and even careers have evolved over the years.
What piques customers is a great source of opportunities.
Before the customer is won over, there is first a battle for the mind. Next, there is a battle for the heart. Finally, there is a battle for the wallet.
The longer the customer wants to use the product, the greater the chances of creating lasting loyalty.
Opportunities abound in shaping consumer perceptions or occupying spaces in their minds or places in their hearts that have not yet been filled.
New inventions, new systems and work processes, new insights about the human psyche, new applications for old knowledge, new revelations about how the physical world works, new interpretations, new combinations based on the convergence of previous technologies, new outlooks about how life should be led, and a host of other new things are tremendous sources of opportunities.
Determining personal preferences and competencies lay the foundation for a new business venture.
Unexpected occurrences in both the external and internal environment of the enterprise indicate that significant changes are happening and opportunities are sprouting.

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11
Q

Sources of Opportunities

A

Macro Environmental Sources of Opportunities

Industry Sources of Opportunities

Micromarket

Consumer Preferences, Piques, and Perceptions

Other Sources

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12
Q

The Personal Screen

A

In screening opportunities, the entrepreneur first has to consider his or her preferences and capabilities by asking three basic questions:

Do I have the drive to pursue this business opportunity to the end?
Will I spend all my time, effort, and money to make the business opportunity work?
Will I sacrifice my existing lifestyle, endure emotional hardship, and forego my usual comforts to succeed in this business opportunity?

If “YES” is your answer to all of the above, then you can begin your earnest pursuit of that opportunity.

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13
Q

Risk-Return Grid for

Screening Opportunities

A

u should know this

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14
Q

The 12 Rs of Opportunity Screening

A 
Relevance 
Resonance 
Reinforcement 
Revenues
Responsiveness 
Reach
Range
Revolutionary Impact
Returns
Relative Ease of Implementation
Resources Required
Risks
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15
Q

Relevance

A

to vision, mission, and objectives of the entrepreneur. The opportunity must be aligned with what you have as your personal vision, mission, and objectives for the enterprise you want to set up.

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16
Q

Resonance

A

to values. Other than vision, mission, and objectives, the opportunity must match the values and desired virtues that you have or wish to impart.

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17
Q

Reinforcement

A

of Entrepreneurial Interests. How does the opportunity resonate with the entrepreneur’s personal interests, talents, and skills?

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18
Q

Revenues

A

In any entrepreneurial endeavor, it is important to determine the sales potential of the products or services you want to offer. Is there a big enough market out there to grab and nurture for growth?

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19
Q

Responsiveness

A

to customer needs and wants. If the opportunity that you want to pursue addresses the unfulfilled or underserved needs and wants of customers, then you have a better chance of succeeding.

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20
Q

Reach

A

Opportunities that have good chances of expanding through branches, distributorships, dealerships, or franchise outlets in order to attain rapid growth are better opportunities.

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21
Q

Range

A

The opportunity can potentially lead to a wide range of possible product or service offerings, thus, tapping many market segments of the industry.

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22
Q

Revolutionary Impact

A

If you think that the opportunity will most likely be the “next big thing” or even a game-changer that will revolutionize the industry, then there is a big potential for the chosen opportunity.

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23
Q

Returns

A

It is a fact that products with low costs of production and operations but are sold at higher prices will definitely yield the highest returns on investments. Returns can also be intangible; meaning, they come in the form of high profile recognition or image projection.

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24
Q

Relative Ease of Implementation

A

Will the opportunity be relatively easy to implement for the entrepreneur or will there be a lot of obstacles and competency gaps to overcome?

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25
Q

Resources Required

A

Opportunities requiring fewer resources from the entrepreneur may be more favored than those requiring more resources.

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26
Q

Risks

A

In an entrepreneurial endeavor, there will always be risks. However, some opportunities carry more risks than others, such as those with high technological, market, financial, and people risks.

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27
Q

Opportunity Screening Matrix

A

aralin mo

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28
Q

Factors That Are Contained in a Pre-feasibility Study

A

Market potential and prospects

Availability and appropriateness of technology

Project investment and detailed cost estimates

Financial forecast and determination of financial feasibility

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29
Q

Things to Consider in Writing the Feasibility Study

A

A more in-depth study of market potential to ensure that the business proposal will reach the forecasted sales figures
Proof that the product or services being offered has the right design, attributes, specifications and preferred features
Proof that the entrepreneur and his or her team have the necessary experience, skills, and capabilities to maximize the venture’s chances of success
Legal visibility
More detailed costing on the different assets and more justification for the production and operating expenses
More thorough analysis of the technology and its sustainability

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30
Q

The question for the entrepreneur in Opportunity Seizing is…

A

“Will I be able to manage, to my advantage, the critical success factors and avoid the critical failure factors?”

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31
Q

Key Points in Going about the “Questioning” to Craft a Positioning Statement

A

What are the main customer segments?
What are the different product attributes and features of each of the competitors?
What are the existing marketing practices of the various competitors?
What are the market preferences of consumers when it comes to the products being offered?

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32
Q

Options or Directions in Coming up with a Product/Service Concept

A

The first is to create a concept similar to the winning products in the marketplace and ride with the obvious market trends
The second is to find a market niche that has not been filled by the competitors.
The third is to conceptualize a product in a positioning category where the participants are rather weak.
The fourth is to conceptualize a product that would change the way customers think, behave, and buy, thus making existing products “obsolete” and “old-fashioned.”

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33
Q

Designing, Prototyping, and Testing the Product

A

Designing means that the entrepreneur must render the concept and translate it into its very physical and very real dimensions (measurement). This entails building a prototype of the product that will be ready for actual testing by the entrepreneur and then, later on, subject to testing by potential customers through focus group discussions (FGD), surveys, product demonstration sessions, and the like.

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34
Q

Market Research Methodologies

A

Sales Data Mining

Focus Group Discussion

Observation Technique

Survey Research

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35
Q

can be used to address substantive issues such as:
understanding consumers’ perceptions, preferences, and behavior concerning a product category;
obtaining impressions on new product concepts;
generating new ideas about older products;
developing creative concepts and copy material for advertisements;
securing price impressions; and
obtaining preliminary consumer reaction to specific marketing programs.

A

Focus Group Discussion

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36
Q

Lasting for an hour and a half up to three hours, the FGD is an interview by a facilitator of a small group of people who are selected because of their knowledge about the topic.

A

Focus Group Discussion

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37
Q

There are four key decisions to be made in an FGD: (1) respondent selection; (2) sample size; (3) data gathering; and (4) data analysis.

A

Focus Group Discussion

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38
Q

Respondent selection includes: (1) the definition of the respondents; (2) the classification of the respondents; and (3) the screening of respondents.

A

Focus Group Discussion

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39
Q

Data gathering methods in FGD involve: (1) the selection and preparation of the venue and equipment; (2) the formulation of the discussion agenda; and (3) a facilitator who is very skilled in moderating and possesses the ability to draw out significant insights from the participants.

A

Focus Group Discussion

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40
Q

Data analysis includes: (1) the integration of the information gathered; (2) some observations on respondent behavior; and (3) listing of recommendations and report writing.

A

Focus Group Discussion

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41
Q

Nine steps in conducting a focus group discussion:

A
  1. Develop the research objectives. What is the research all about?
  2. Determine the participants’ profile. Who are the most knowledgeable or most relevant participants?
  3. Determine the appropriate token or “compensation” for the participants.
  4. Develop a participant screener questionnaire.
  5. Recruit the participants.
  6. Select a good facilitator. The key qualities of a good facilitator are:
    • kindness with firmness
    • involvement and encouragement
    • complete understanding
    • flexibility
    • sensitivity
  7. Develop a facilitator’s discussion guide.
  8. Arrange for the venue and logistics.
  9. Analyze the results of the focus group discussion.
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42
Q

The observations conducted must be documented and tallied for proper analysis later on.

A

Observation Technique

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43
Q

Prior to doing the observation, it is important for the researcher to ensure that the following conditions are met:

A

The needed information must be observable or inferable from the behavior that can be observed.
The subject matter contains some sensitivity that needs detached observation.
The behaviors of interest must be repetitive, frequent, or predictable in some manner.
The behaviors of interest must be of a relatively short duration.

44
Q

The advantages of observation research are:

A

It allows the researcher to see what customers actually do rather than rely on what they say they do.
It allows the researcher to observe customers in their natural setting.
It does not subject the researcher to the unwillingness of customers or their inability to reply to certain questions.
Some information are better gathered quickly and accurately through observation.

45
Q

The disadvantages of observation research are:

A

The researcher cannot get the reasons behind the behavior.
The researcher can only focus on the “here and now.” It cannot cover the past nor cover the future.
Finally, the observation technique may border on the unethical because the respondents have not agreed to be observed.

46
Q

Below are the guidelines in conducting observation research.

A 
Determine the pre-observation objectives. 
Prepare your pre-observation tips: 
Prepare and clarify your observation points and issues. 
Prepare your observation materials. 
Identify the persons to be observed. 
Position yourself strategically without being noticed. 
Focus on what you want to observe: 
Is it customer demographics? 
Customer buying behavior? 
Customer usage behavior? 
Other customer information? 
Observation proper: 
Observe keenly and listen intently. 
Be mindful of the surroundings.
Be alert for obvious movements. 
Be sensitive to subtle movements. 
Look at the customer when the customer is not looking. 
Do not be obvious. 
Observe and take note of other things that you feel are important. 
Post-observation tips: 
Review your notes. 
Make sure that the flow is correct. 
Tabulate what needs to be tabulated. 
Interpret and analyze your data. 
Make a formal report.
47
Q

The respondents are asked a variety of questions which are often about their personal information, their motivations, and their behavior.

A

Survey Research

48
Q

In planning a survey, there are three important concerns that one has to look into:

A

Sampling technique
Getting the sample size
Designing the questionnaire

49
Q

Steps in Conducting a Survey Research

A 
Develop the research objectives. 
Determine your sample.
 Choose the interviewing methodology. 
Create your questionnaire. 
Pre-test the questionnaire. 
Conduct interviews and enter data. 
Analyze the data.
50
Q

Methods of Customer Profiling

A

Demographics

Psychographics

Technographics

51
Q

Demographics

In demographic classification, we categorize customers into the following:

A 
Age 
Income classes 
Social classes/Reference groups
Ethnic backgrounds 
Religious beliefs 
Occupations 
Domiciles
52
Q

Psychographics defines the customer’s:

A

Motivations
Perceptions
Preferences
Lifestyle

53
Q

Technographics classifies people according to their level of expertise in using a product or a service. For example:

A

Sports beginners might just want basic equipment.
Sports regulars may be looking for more sophisticated equipment.
Finally, sports professionals would want the best of the best for competitive purposes.

54
Q

Application of Customer Profiling

A

The first way is to develop a product or service to test out in the marketplace.
The customers most attracted to the product or service can then be profiled.
After profiling, the next step is to find out how huge this market is for exploitation purposes.
The second way is to profile the different types of customers in a given industry or area as to their needs and wants.
From these types, the entrepreneur could then choose the customer group with the best potentials.
Products or services can be developed by the entrepreneur to match this chosen customer group.

55
Q

refers to grouping customers and products according to certain market variables.

A

Market Mapping

56
Q

The purpose of market mapping

A

to provide the market analyst a better understanding of the market as a whole and to paint a clearer picture of where the different competitors are relative to the different market segments.

57
Q

would also allow entrepreneurs to discover market segments that are relatively unserved or underserved. They could then develop products and services that fulfill the gaps in the marketplace.

A

Market Mapping

58
Q

Positioning, in the context of a marketing battle plan, has three overlapping objectives.

A

Positioning has an enterprise perspective.
Positioning has a competitive perspective.
Positioning takes the customer’s perspective.

59
Q

MVP

A

main value proposition

60
Q

is the tangible good or the intangible service that the enterprise offers to its customers in order to satisfy their needs and to produce their expected results.

A

Product

61
Q

are often identified with their brand names to distinguish them from other products in the market.

A

Product

62
Q

General Types of Products

A

Breakthrough products
Differentiated products
Copycat products
Niche products

63
Q

Breakthrough products

A

Offer completely new performance benefits

64
Q

Differentiated products

A

Try to claim a new space in the mind of the customer different from the spaces occupied by existing product

65
Q

Niche products

A

Are products with lower reach, lower visibility, lower prices, and lower top of mind

66
Q

Important Purposes of Packaging

A

Packaging identifies the product, describes its features and benefits, and complies with government rules on specifying its contents, weight, chemical composition, and potency.
Packaging differentiates the product from its competitors and even from its other brand offerings.
Packaging lengthens the lifespan, physically protects, and extends the usefulness of the product.

67
Q

In finding a good location, one needs to consider the following:

A

The number of customers residing or working in the area, and the number of customers who frequently pass through the area.
The density or number of customers per unit area.
The access routes to alternative locations and their traffic count in those routes.
The buying habits of customers or where they buy, at what time and how frequent.
Locational features such as parking spaces, foot access, creature comforts, and the like.

68
Q

In a similar way, the entrepreneur must be able to determine the price that comes with the location because it will spell out the success or failure of the business. The entrepreneur has to consider the following:

A

The cost of buying or renting, renovating, and operating the location.
Customer volume, drop-in rates (what percentage of customer traffic would stop by the store) and sales conversion ratios (what percentage of drop-ins would actually purchase something from the store).
Revenues based on the volume and mix of goods and services expected to be sold at certain prices.
Profits.

69
Q

The final choice of location must be based on the following:

A 
Image and location conditions
Exact fit to target customers 
Clustering of competitor establishments 
Future area development
Fiscal and regulatory requirements
70
Q

Relevant Location Drivers

A 
Physical Proximity to Target Market
Customer Traffic Flow 
Industry Clustering 
Convergence of Multiple Industries 
Population Concentrations 
Activity Hubs 
Growth Potential 
Business Climate 
Cost of Doing Business and Producing Goods and Services
71
Q

are the ultimate marketing strategy.

A

People

72
Q

The marketing efforts of people are organized at four levels:

A

(1) to create customer awareness; (2) to arouse customer interest; (3) to educate customers as they evaluate their buying choices; and (4) to close the sale and deliver the products.

73
Q

Customer’s Decision-making Process

A

What and who are involved in the buying process?
Where are the customers in the buying process? Are they still canvassing and “shopping around”? Are they currently focusing on a few candidates? Are they seriously evaluating the company’s product?
What are the next steps of the customers and how can the company facilitate their next steps? What else do the customers need to know and what issues must be addressed by the marketer?

74
Q

The organizational modality to educate the customers, to help them in their decision-making process, and to close the sale would depend on four variables.

A

Is there a need for high contact (face to face) or will low contact (Internet) be sufficient?
Is there a need for high accessibility? If so, the company requires distributors, dealers, branches, and franchisees to expand their reach. Alternatively, they need a very fast, reliable, and economical delivery system.
How heavy or light is the transaction cost? High transaction cost products need new competent people to sell them.
Does the customer need a lot of sale servicing and after-sales servicing?

75
Q

is the explicit communication strategy adopted by an enterprise to elicit the patronage, loyalty, and support not only from its customers but also from its other significant stakeholders.

A

Promotion

76
Q

encompasses all the direct communication efforts of the enterprise, such as advertising, public relation campaigns, promotional tours, product offerings, point-of-sale displays, websites, flyers, emails, letters, telemarketing, and others.

A

Promotion

77
Q

Critical Factors of Effective Promotion

A

The credibility of the communicator

The message and the medium of the message

The receptiveness of the audience to all that is being communicated

78
Q

Different Pricing Strategies

A 
Profit maximization 
Revenue maximization 
Market share maximization 
Attainment of the desired prestige or quality leadership 
Penetration, survival, or liquidation 
Scarcity pricing or market skimming
Cost recovery 
Subsidy pricing 
Marginal pricing
79
Q

Other Pricing Strategies

A

Introductory or promotional pricing to launch a new product
Charge different prices in different geographical areas to take care of additional logistics costs in farther locations or to accommodate the lower purchasing power in poorer geographic areas
Discount pricing given to loyal and regular customers to maintain their patronage

80
Q

Purpose of Stating the

Mission Statement Clearly

A

for the sake of the customers being wooed;
for the investors who need to know what they are getting into;
for the financiers evaluating the enterprise; and
for the government functionaries who must regulate the activities of industries and businesses

81
Q

A Very Compelling Vision

A

The entrepreneur must establish an enterprise on the basis of a very exciting business concept leading to a grand vision.

The entrepreneur must offer something new, something appealing, something different.

The entrepreneur must present a winning business concept that manifests tremendous future possibilities.

82
Q

Not by Any Other Name

A

A good name identifies the company very well, and communicates what the company is all about and what its products are all about.

The company name must project its very desired image.

83
Q

Purposes of a Business Plan

A

Entice partners, investors, and bankers to fund a business venture.

Communicate what the enterprise is all about, what market it wants to serve.

Show what financial returns it could muster.

84
Q

Important Information That a Business Plan Should Contain

A
  • the business itself
  • the organizers
  • the management and technical people
  • the financial structure
  • its market potential
  • its target market
  • its projected sales, expenses, and profits
  • its probable risks
85
Q

The business plan should contain an executive summary of the following:

A

The organizers and the key people behind the business and why these people have the resources, talents, skills, and technology to achieve success.
The market being targeted and why there is enough market potential to justify the business
The products or services to be offered and why they are right for the market
How the business will be operated and organized, including all outsourcing, subcontracting, franchising, and licensing agreements
The investment capital required for the business and what exactly it would be used for
The technology, the technical expertise, the equipment, and materials suppliers to be utilized
The capital structure (short and long term debt, stockholders’ equity) of the business
The operating budget, financial projections (income statement, balance sheet, cash flow), and return on investment prospects
The risks in the business and the contingency measures to counteract them

86
Q

Assets of an Enterprise

A

The current assets, which are short-lived assets.
The long-lived or fixed assets.
The other assets

87
Q

The current assets, which are short-lived assets.

A

They are composed of cash, inventory, accounts receivables, and other current assets.

88
Q

The long-lived or fixed assets.

A

They are composed of property, plant, and equipment.

89
Q

The other assets

A

They are composed of organizational and pre-operating expenses.

90
Q

Liabilities of an Enterprise

A

Current liabilities such as suppliers’ credit and other short-term credit
Long term debt
Owner’s equity

91
Q

Forms of Business Organization

A

Sole Proprietorship

Partnership

Corporation

92
Q

The simplest and easiest enterprise to organize

A

Sole Proprietorship

93
Q

The owner or entrepreneur has sole control over the enterprise, thus, reaps all the profits and, also, all the losses.

A

Sole Proprietorship

94
Q

There is no distinction between the owner and the enterprise, meaning, the entrepreneur is personally answerable and obligated to fulfill all the terms and conditions of any business contract that he or she enters into.

A

Sole Proprietorship

95
Q

Two or more persons binding themselves into a contract to contribute money, property, and expertise in a common venture with the intention of dividing the profits among themselves

A

Partnership

96
Q

Can own its own assets, can incur its own liabilities, and can sue and get sued

A

Partnership

97
Q

A minimum of two persons can constitute a partnership, but there is no limit to the number of persons in a partnership

A

Partnership

98
Q

The decision of one partner is binding to all the other partners

A

Partnership

99
Q

Types of Partnership Based on the Liability of the Partners

A

general partnership

limited partnership

100
Q

general partnership

A

is composed of partners who are liable individually and collectively to all those who have claims against them. Claimants can run after all the personal assets of all the partners.

101
Q

limited partnership

A

consists of partners who have limited liabilities while others in the partnership have unlimited liabilities.

102
Q

Has a separate legal personality quite distinct from the investors who contributed money to the enterprise Can own its own assets, can incur its own liabilities, and can sue and get sued

A

Corporation

103
Q

Can be formed or incorporated by, at least five, or at most 15 natural persons

A

Corporation

104
Q

Once the corporation is established, there is no limit to the number of natural or juridical persons who can invest in the corporation.

A

Corporation

105
Q

Types of Corporation

A
  1. Stock Corporation
  2. Non-Stock Non-Profit Corporation
  3. Close Corporation
  4. Corporation Sole

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