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68 Cards in this Set
- Front
- Back
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What is a business plan?
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A written document that identifies the nature of a business opportunity, shows how a company will turn that opportunity into profit over time, and sells a business concept
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Which audiences should a business plan consider?
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- management
- employees - communities - suppliers - distributors - government - financial institutions - investors |
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What are 5 things that make a successful business?
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1. A viable business concept
2. An understancing of the market 3. The health and trends of the industry 4. Strategic thinking and focus 5. Capable management and good employees |
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What are the components of a business plan?
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- Executive summary
- General company description - Management and organization - Industry analysis and trends - Markets and marketing plan - Competition and strategic position - Operations - Development, milestones, and exit plan - Financials - Appendices |
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What are the important components of a business plan?
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1. Executive summary
2. Management and organization 3. Financials |
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Executive summaries should show...
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-businesss concept makes sense
0business has been thoroughly planned -management is capable -market exists -business has competitive advantage -financial goals are realistic and attainable -there is opportunity to make money |
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General company information should show...
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-company name
-company ovjectives, mission statement -legal information -primary products, services -management structure -location -history, achievments to date -financial status |
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Management and organization section should show...
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-Who is management team
-Experience and qualifications -Management structure -Management style -Key employees -Board of directors, advisory committee -Consultants -Social and environmental values, community involvement |
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Industry analysis and trends section should show...
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-Your economic sector
-Your industry, including size and growth potential -Economic cycles, financial patterns, seasonality -financial patterns -supply chains, distribution channels -regulations, certifications |
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Competition and strategic position section should evaluate...
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-current and future competitive postion
-factors affecting you ability to compete -market share distribution and barriers to entry |
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You should differentiate yourself by...
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-developing a unique strategic postion and value propostion
-explicitly defining what you do and what you don't do -understanding and assessing risk -balancing risk with opportunity |
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The operations section should show....
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-facilirtes
-production inventories raw materials, supploers, distribution -order filfillment, customer service -research and development -fincancial control and contingency planning -technology plan |
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The development, milestones and exit plan section should show...
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-goasl and priorites
-achievements to date -milestones (key dates) -exit plan based on evaluation of risks |
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The financial section of the business plan should show...
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-sources and use of funds
-start-up costs -cash-flow projections -break-even analysis -assumption sheet -balance sheet -income statement -cash-flow statement |
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The appendices should contain...
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-ketters if intent
-endorsements -resumes of key employees -photos, renderings, prototypes -marketing resarch results -marketing materials -technical/manufacturing information -scheduels, timelines |
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What are the characteristics of sole propietership?
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-Owned by one person
-Income, losses and liabilities are that of the owner who files under personal taxes |
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What are the characteristics of a partnership?
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Share profit, losses and liabilities
-no written contract necessary |
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What are the characteristics of a corporation
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-seperate legal entity from its owners
-can enter contracts and own land -must file taxes as a corporation |
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What are the 6 general business goals/constraints?
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1. profit
2. social 3. growth 4. sustainability 5. services 6. innovation |
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Explain the NAICS system of digits.
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-sector = 2 digits
-sub sector = 3 digits -industry group = 4 digits -industry = 5 digits -national industry = 6 digits |
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What are porter's five competitive forces?
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1. New entrants
2. Suppliers 3. Buyers 4. Subsitutes 5. Industry competitors (intense rivalry) |
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What are some examples of barriers to entry?
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-economies of scale
-propietry product differences -brand identity -switiching costs -capital requirements -access to distribution -absolute cost advantages -propietary learning curves -access to necessary inputs -propietary low-cost product design -government policy -expected retaliation |
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What are the determinants of supplier power?
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-differentiation of inputs
-switching costs of suppliers and firms in the industry -presence of substitute inputs -supplier concentration -importance of volume to supplier -cost relative to total purchases in the industry -impacts of inputs on cost or differentiation -threat of forward integration relative to treath of backward integration by firms in the industry |
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What are the determinants of buyer bargaining power?
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-buyer concentration vs. firm concentration
-buyer volume -buyer switching costs relative to firm switching costs -buyer information -ability to backward integrate -substitute products -pull-through (?) |
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What are the determinants of subsitution threats?
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-relative price performance of substitutes
-switching costs -buyer propensity to substitute |
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What are the determinants of buyer overall power?
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-price sensitivity
-price/total purchases -product differences -brand identity -impact on quality/performance -buyers profits -decision makers' incentives |
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What are the determinant of industry rivalry?
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-industry growth
-fixed (or storage) costs/value added -intermittent over-capacity -product differences -brand identity -switching costs -concentration and balance -informational over complexity -diversity of competitors -corporate stakes -exit barriers |
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If you are seeking a broad scope strategy for your business what two generic options do you have?
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-Cost leadership
-Differentiation |
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If you are seeking a narrow scope strategy for your business what two generic options do you have?
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-Focus on low cost
-Focus on differentiation |
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What are some examples of functional groups in a business?
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-operations/production
-strategic development -marketing/sales -procurement -logistics & transportation -innovation/r and d -human resources -accounting/finance |
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What are the characteristics of a tall organization?
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-many levels
-few people report to each manager |
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What are the characteristics of a flat organization?
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-few management levels
-many people report to one manager |
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How are functional organizations broken up?
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By tasks (eg finance, r&d, production, etc.)
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How are divisional organizations broken-up?
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By product, region, operatio, etc.
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What are the characteristics of a hybrid organization?
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Organization broken-up by function and division but at different levels.
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What are the characteristics of a matrix organization?
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-Organized by function and divistion simultaneously
-Project managers |
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What is a team?
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-A team is a unit producing work as opposed to the individual.
-They are not the same as group. -Performance measured based on team outcomes -"cross functional" teams are composed of wide range of expertise |
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What are common characteristics shared by teams?
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-they have a common task or goal
-each member has a specified role -actions of individuals are interdependent |
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What are the three business orientations?
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1. Product orientation
2. Sales orientation 3. Marketing concept |
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What are the characteristics of product orientation?
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-production to fill existing needs
-can we produce it? -can we produce enough of it? -demand for product outstrips supply -measure=productivity |
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What are the characteristics of sales orientation?
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Use sales and promotion to create/fill needs
-can we sell it? -can we sell it for enough? Need to sell what you produce as supply outstrips demand Focus on sales and marketing measure=sales, market share |
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What is the main goal of the marketing concept?
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To provide the customer with what they want and need.
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What kind of business philosophy does the marketing concept require?
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-complete customer orientation
-coordinated company commitment -profit as the objective (measure=profit) |
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What questions does one ask if they are employing the marketing concept?
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-what do customers want?
-can we develop products to fit customers wants when we can deliver them? -how to keep customers satisfied |
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How does the market cycle work?
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Companies send out marketing to customers while also collecting market research from customers
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What are the 4 P's of marketing?
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-product
-price -promotion -place |
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What is the marketing mix?
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The firm's actions on controllable variables to satisfy customer groups
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What is a product?
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A physical good or service that satisfies the wants and needs of a customer
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What are the three product levels and examples?
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1. product item (macbook pro 17")
2. product line (macbook) 3. product mix (macbook, imac, ipod, itunes store) |
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What are some types of wood products?
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-commodity (2x4)
-differentiated (canfor red, flooring) -specialty (log home constructions) |
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What is the key concept of the total product concept?
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That the product is a set of attributes
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What is a hard product attribute with examples?
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-Something intrinsic to the product or service
-eg grade, colour, size, style, price, material, features, weight |
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What is a soft product attribute with examples?
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-something extrinsic to the product or service
-eg reputation, service, credit term, website, warranty, qualitym reliability |
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What is the product life cycle?
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The conditions that products face in the market.
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Describe the product life cycle.
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-products have a beginning middle and end
-it is used to classify products and develop marketing strategies around the 4 P's |
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What are the four phases of the product life cycle?
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1. introduction
2. growth 3. maturity 4. decline |
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What are the three factors affecting the product life cycle length?
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1. rate of technological changes
2. market acceptance of substitutes 3. various economic factors |
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What are the various economic factors which affect the product life cycle?
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-growth/recession/war
-cost of raw materials -exchange rates -housing starts -demographics |
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What are the three ways to manage or extend the product life cycle?
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1. redefine market
2. redefine production 3. rediefine product |
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What is strategy?
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A plan or series of plans for obtaining specific goals (economic, social, environmental).
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In business, what can strategy refer to?
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-corporate
-business unit -product marketing |
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What is strategic thinking?
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Encisioning potential futures and discovering novel approaches for addressing changing business environments.
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What is strategic planning?
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The operationalization of potential new direcections.
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What makes up strategic management?
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1. strategic thinking
2. strategic planning |
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What is the first question in strategic management?
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what external changes could affect the organziation?
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what is the second question in strategic management?
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What could be the effects of these changes in terms of threats and opportunites?
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What is the third question in strategic management?
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What strengths can we build on to take advantage of the opportunities?
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What is the fourth question asked in strategic management?
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What changes mjust we make to address the threats or opportunities?
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