A differentiation-based strategy is one of two general options that can lead to a competitive advantage. Type C startup ideas probably account for the largest number of all new venture startups. These ideas result in modifications to existing products and services.
Therefore, they may have less risk and a market with a customer base. The idea will fail if the market does not perceive that an old function is being performed in a new and improved manner. Personal experiences is a one of the most prolific source of startup ideas. Simone Gonzales and Pleasure Doing Business. Sometimes hobbies and personal interests grow beyond their leisure activities and become businesses.
Alex Shogren and Best Kiteboarding. For instance, people who love skiing might start a ski equipment rental operation as a way to make income from an activity they enjoy. A market consists of buyers, current or potential customers who are interested in purchasing a particular class of products or services to satisfy their wants or needs — and they must have the ability to pay for them.
An industry is made up of sellers who compete with one another by offering identical or similar products or services for sale to the same general group of buyers. Both markets and industries are considered part of the macro level of the business. A market with potential, an attractive industry and a capable individual or team with skills and capabilities to pull together are critical for success. All five factors combine to make a target market attractive and profitable.
If these factors are strong, then profitability is weaker. An entrepreneur should understand each factor to identify opportunities and threats for the new venture.
Strategies can be condensed into either a cost-based strategy or a differentiation-based strategy. The cost-based strategy requires a firm to be the lowest-cost producer in its market, employing practices ranging from using low-cost labor to installing highly efficient manufacturing equipment. Using creative approaches, small firms can be very competitive using this type of strategy.
Differentiation-based strategies are based on product or service differentiation. That is, firms using this strategy must offer a product or service that is perceived to be unique in some way e. A firm could then pair this focus strategy with an overall cost-based strategy or a differentiation-based strategy. Procter and Gamble quickly imitated the product and had the money to push their product. Now new firms have subsegmented the industry with the addition of antibacterial agents to the soaps.
Resources are basic inputs that a firm uses in its business, including cash for investment, useful technologies, access to equipment, and capable employees.
Companies have both tangible and intangible resources. Core competencies are those resources and capabilities that provide an enterprise with a competitive advantage over its rivals. An inside-out analysis catalogues the resources and capabilities available to the startup leading to core competency identification. By using resources and capabilities in unique ways, a firm can establish its core competencies and apply them to obtain a competitive advantage.
Click to enlarge. Longenecker Baylor University J. Baron Nyla R. Next product. Donlevy, Terri Champion, J. William Petty, Leslie E. ANS: F Serendipity refers to making desirable accidental discoveries, not engaging in deliberate search efforts. ANS: F Startups that are launched by first identifying market needs are more likely to be successful, especially when the business is related to consumer goods and services.
ANS: F Business guru Peter Drucker believes entrepreneurs should consider seven sources of opportunity as they prepare to launch or grow their enterprises: the unexpected, the incongruous, process needs, structural change, demographics, changes in perception, and new knowledge. ANS: F All five forces are relevant for small businesses. ANS: F The general environment encompasses broad factors; industry environment includes factors that directly impact a given firm and its competitors.
ANS: F Diversification involves starting or buying more than one business without merging the operations. ANS: F It is the industry environment that impacts only a firm and its competitors. ANS: F Small businesses can benefit from such an analysis in that new opportunities can be identified as well as threats that might hurt operations.
ANS: F Bargaining power depends on the strength of the supplier Will the supplier demand a high price for a limited item? ANS: F Research has shown that these are more often generated from personal expertise, not from external sources. ANS: F Small businesses benefit from general environmental scanning. ANS: F Core competencies are the capabilities that provide a competitive advantage. Condition: Fair. This book has hardback covers. In fair condition, suitable as a study copy. Please note the Image in this listing is a stock photo and may not match the covers of the actual item,grams, ISBN Halsey N.
Broom, Justin G. Longenecker, Carlos W. Moore, J. William Petty. Used - Softcover Condition: Very Good. Condition: Very Good. Small Business Management: An Entrepreneurial Emphasis This book is in very good condition and will be shipped within 24 hours of ordering. The cover may have some limited signs of wear but the pages are clean, intact and the spine remains undamaged. This book has clearly been well maintained and looked after thus far.
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