Entrepreneurship Principles and Practices
53 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which statement best describes the typical behavior of entrepreneurs regarding risk?

  • Entrepreneurs never take risks.
  • Most entrepreneurs are moderate risk takers. (correct)
  • Entrepreneurs are known as inveterate risk-takers.
  • Most entrepreneurs tend to avoid all risks.

What common perception exists about entrepreneurs and their work environment?

  • Entrepreneurs often face uncertain possibilities due to their roles. (correct)
  • Entrepreneurs are primarily traditional workers.
  • Entrepreneurs always plan every step meticulously.
  • Entrepreneurs have very structured work environments.

How do entrepreneurs typically involve others in their projects?

  • They seek to interest third parties to secure their commitment. (correct)
  • They only work with established companies.
  • They work alone without any collaboration.
  • They fully plan all aspects before engaging others.

What characteristic is associated with entrepreneurs' approach to goal-setting?

<p>They often set highly challenging goals. (C)</p> Signup and view all the answers

What should one expect when dealing with entrepreneurs in terms of unpredictability?

<p>Surprises are common when working with entrepreneurs. (D)</p> Signup and view all the answers

What is likely to happen when suppliers are concentrated?

<p>Organizations' profit may be reduced. (B)</p> Signup and view all the answers

Which situation indicates a high threat of new entrants?

<p>There are minimal fixed costs. (A)</p> Signup and view all the answers

What can lead to an increased threat of substitutes?

<p>A higher price-performance ratio of substitutes. (A)</p> Signup and view all the answers

What factors promote rivalry among existing competitors?

<p>High exit barriers in the market. (B)</p> Signup and view all the answers

Which of the following would NOT be considered a barrier to entry?

<p>Innovative product design. (A)</p> Signup and view all the answers

Which condition can reduce the power of suppliers?

<p>Availability of alternative suppliers. (B)</p> Signup and view all the answers

What is one impact of high fixed costs within an industry?

<p>It reduces the incentive for competitors to leave the market. (A)</p> Signup and view all the answers

What typically enhances the likelihood of customers switching to substitutes?

<p>Lower customer satisfaction with existing products. (B)</p> Signup and view all the answers

What are core competencies when they are valued and rare?

<p>Competitive advantage (D)</p> Signup and view all the answers

What happens when core competencies are valuable, rare, and costly to imitate but substitutes exist?

<p>Temporary competitive advantage (C)</p> Signup and view all the answers

Which statement about dynamic capabilities is true?

<p>They focus on the dynamics of combining and developing new knowledge. (C)</p> Signup and view all the answers

What is required for sustained competitive advantage based on core competencies?

<p>No opportunities for disruption technology (D)</p> Signup and view all the answers

Which of the following best describes core competencies?

<p>They are the management's ability to consolidate corporate-wide competencies. (C)</p> Signup and view all the answers

What distinguishes sustained competitive advantage from temporary competitive advantage?

<p>The absence of disruptive technology (B)</p> Signup and view all the answers

What is a characteristic of sensing capabilities in dynamic capabilities?

<p>They involve constant scanning for new opportunities. (B)</p> Signup and view all the answers

Which of the following indicates competitive parity?

<p>Valuable but not rare core competencies (C)</p> Signup and view all the answers

Which characteristic distinguishes pure competition from monopolistic competition?

<p>Products are homogenously identical. (C)</p> Signup and view all the answers

Which of the following is a defining feature of an oligopoly?

<p>High barriers to entry for new competitors. (C)</p> Signup and view all the answers

What is a common outcome when buyers have high bargaining power?

<p>Profit margins for suppliers decrease. (C)</p> Signup and view all the answers

In a regulated monopoly, how is the price determined?

<p>By the government mandate. (A)</p> Signup and view all the answers

Which characteristic of monopolistic competition can lead to higher prices for consumers?

<p>Limited information availability. (D)</p> Signup and view all the answers

What aspect of pure monopoly significantly influences its market power?

<p>Ability to change prices freely. (A)</p> Signup and view all the answers

Which type of market structure is indicated by having both limited buyer choices and the potential for product differentiation?

<p>Oligopoly (B)</p> Signup and view all the answers

What is a typical characteristic of pure competition?

<p>Absence of product differentiation. (C)</p> Signup and view all the answers

Which factor does not influence profitability in an industry?

<p>Public perception. (C)</p> Signup and view all the answers

In specific regulated monopolies, what is a key reason for their existence?

<p>To ensure consistent service at regulated prices. (C)</p> Signup and view all the answers

Which situation would likely lead to increased buyer power?

<p>Low switching costs. (B)</p> Signup and view all the answers

What describes the structure of a pure monopoly?

<p>A single seller with unique products. (C)</p> Signup and view all the answers

In monopolistic competition, what can result from firms excelling in product differentiation?

<p>Increased control over pricing. (A)</p> Signup and view all the answers

What is often a barrier to entry in oligopolistic markets?

<p>High capital requirements. (B)</p> Signup and view all the answers

What is the primary goal of a cost leadership strategy?

<p>To become the lowest cost organization in a specific domain (B)</p> Signup and view all the answers

Which of the following is NOT considered a key cost driver in achieving cost leadership?

<p>Product and service attributes (B)</p> Signup and view all the answers

Which factor is crucial for successful focus strategies?

<p>Distinct segment needs (D)</p> Signup and view all the answers

What characterizes the differentiation strategy?

<p>Providing unique features valued by customers (C)</p> Signup and view all the answers

Which of the following would be a typical example of a differentiation focus strategy?

<p>A luxury car brand targeting affluent buyers (A)</p> Signup and view all the answers

How does business strategy influence operations capabilities?

<p>By aligning production efforts with market demands (A)</p> Signup and view all the answers

Which component is NOT considered a driver of differentiation?

<p>Operational cost control (A)</p> Signup and view all the answers

What is a crucial aspect of operations capability?

<p>Performing tasks better than competitors (B)</p> Signup and view all the answers

What does benchmarking primarily help organizations understand?

<p>How they compare with other organizations (A)</p> Signup and view all the answers

What is the focus of industry/sector benchmarking?

<p>Evaluating performance against similar organizations (A)</p> Signup and view all the answers

Which of the following describes best-in-class benchmarking?

<p>Evaluating against the highest performance standards in any industry (D)</p> Signup and view all the answers

In a SWOT analysis, what do strengths and weaknesses represent?

<p>Internal factors affecting performance (C)</p> Signup and view all the answers

What are the dangers of misusing SWOT analysis?

<p>Creating overly simplistic conclusions (C)</p> Signup and view all the answers

How is the TOWS matrix utilized in strategic planning?

<p>To generate strategic options based on SWOT findings (D)</p> Signup and view all the answers

What does strategy focus on according to the provided content?

<p>Long-term direction and resource configuration (A)</p> Signup and view all the answers

What is a common misconception about SWOT analysis?

<p>It is not aimed at guiding strategic decisions. (D)</p> Signup and view all the answers

Which of the following is NOT a use of SWOT analysis?

<p>To forecast competitive market dynamics (D)</p> Signup and view all the answers

What is an important aspect of collecting benchmarking data?

<p>It should be compared against chosen performance indicators. (D)</p> Signup and view all the answers

Flashcards

High Supplier Power

Powerful suppliers can reduce an organization's profits.

Barriers to Entry

Obstacles that make it difficult for new companies to enter a market.

Threat of Substitutes

The likelihood customers will switch to alternative products or services.

High Rivalry

Strong competition among existing companies in a market.

Signup and view all the flashcards

Supplier Concentration

A small number of suppliers control the market.

Signup and view all the flashcards

Switching Costs

Costs involved in changing from one supplier to another.

Signup and view all the flashcards

Economies of Scale

Lower costs per unit as production volume increases.

Signup and view all the flashcards

Attractiveness of Industries

A measure of how profitable or worthwhile an industry is.

Signup and view all the flashcards

Entrepreneur Characteristics

Entrepreneurs frequently display characteristics like calculated risk-taking, a drive to achieve ambitious goals, and a tendency to swiftly build projects by engaging partners.

Signup and view all the flashcards

Entrepreneur Risk-Taking

Entrepreneurs often take calculated risks, as their work environments involve less structure than traditional jobs, leading to more uncertain outcomes.

Signup and view all the flashcards

Entrepreneur's Project Planning

Entrepreneurs usually build projects and involve third-party participation by creating strong interest.

Signup and view all the flashcards

Entrepreneur's Project Direction

Entrepreneurs determine the direction of the project on their own.

Signup and view all the flashcards

Entrepreneur's Forecasting

Despite planning, entrepreneurs realize that surprises are inevitable in project execution.

Signup and view all the flashcards

Pure Competition

A market with many buyers and sellers of identical products; no single buyer or seller can influence prices.

Signup and view all the flashcards

Monopolistic Competition

A market with many sellers offering slightly different products; firms can influence prices due to product differentiation.

Signup and view all the flashcards

Oligopoly

A market with a small number of large sellers; firms have significant influence over prices.

Signup and view all the flashcards

Pure Monopoly

A market with only one seller; the seller has significant control over price and product.

Signup and view all the flashcards

Regulated Monopoly

A single seller, but with prices regulated by the government.

Signup and view all the flashcards

Buyer power

The ability of buyers to influence prices by demanding lower prices or better products.

Signup and view all the flashcards

Supplier power

The ability of suppliers to influence prices by demanding higher prices or better conditions.

Signup and view all the flashcards

Porter's 5 Forces

Model for analyzing competitive intensity, used to determine an industry's attractiveness.

Signup and view all the flashcards

Market attractiveness

Measure of how profitable an industry is.

Signup and view all the flashcards

Homogeneous product

A product with no real difference compared to competitors.

Signup and view all the flashcards

Product differentiation

Slight variations between similar products.

Signup and view all the flashcards

Perfect information

All buyers and sellers have complete knowledge of the market.

Signup and view all the flashcards

Imperfect information

Market knowledge isn't complete; some factors hidden or unclear.

Signup and view all the flashcards

Duopoly

A market with two suppliers.

Signup and view all the flashcards

Core Competencies

Internal strengths that give a company a competitive advantage.

Signup and view all the flashcards

Competitive Advantage

A firm's ability to outperform competitors in the marketplace.

Signup and view all the flashcards

Dynamic Capabilities

The ability to combine, develop, and adapt knowledge to change.

Signup and view all the flashcards

Sustained Competitive Advantage

A lasting competitive edge; not easily copied.

Signup and view all the flashcards

Competitive Parity

Performing similarly to competitors on an average basis.

Signup and view all the flashcards

Competitive Disadvantage

Performing worse than competitors in the marketplace.

Signup and view all the flashcards

Substitute Product

A competing product or service that offers similar value.

Signup and view all the flashcards

Sensing Capabilities

Identifying new market opportunities and technological trends.

Signup and view all the flashcards

Cost Leadership

A strategy where a company aims to become the lowest cost producer in its industry. This is achieved by focusing on minimizing costs across all operations.

Signup and view all the flashcards

Differentiation Strategy

A strategy where a company distinguishes its products or services from competitors by offering unique features or benefits that customers value and are willing to pay a premium for.

Signup and view all the flashcards

Focus Strategy

A strategy where a company targets a specific niche or segment of the market and tailors its offerings to meet the unique needs of that particular group.

Signup and view all the flashcards

Cost Focus Strategy

A type of focus strategy where a company serves a niche market by offering the lowest cost products or services within that segment.

Signup and view all the flashcards

Differentiation Focus Strategy

A type of focus strategy where a company serves a niche market by offering differentiated products or services that meet the specific needs and preferences of that segment.

Signup and view all the flashcards

Operations Capability

A special ability or strength that a company's production processes excel at, giving it an advantage over competitors.

Signup and view all the flashcards

What are key drivers of cost leadership?

Lower input costs, economies of scale, experience/learning curve, and product/process design optimized for cost efficiency.

Signup and view all the flashcards

What are key drivers of differentiation?

Unique product attributes, superior customer relationships, and complementary products/services.

Signup and view all the flashcards

Benchmarking

Comparing an organization's performance against others, especially competitors, to identify strengths and weaknesses.

Signup and view all the flashcards

Industry/Sector Benchmarking

Comparing performance to other organizations within the same industry or sector using specific performance indicators.

Signup and view all the flashcards

Best In Class Benchmarking

Comparing performance to the very best performers, regardless of industry, to identify opportunities for improvement.

Signup and view all the flashcards

SWOT Analysis

A framework for analyzing internal strengths and weaknesses and external opportunities and threats to develop strategy.

Signup and view all the flashcards

TOWS Matrix

A tool for generating strategic options by combining SWOT analysis elements into four quadrants: Strengths-Opportunities, Strengths-Threats, Weaknesses-Opportunities, Weaknesses-Threats.

Signup and view all the flashcards

Strategic Options

Potential paths or actions that an organization can take to achieve its objectives, based on SWOT analysis.

Signup and view all the flashcards

Strategy Defined

The long-term direction and scope of an organization, aiming to achieve advantage in a changing environment through its resources and capabilities, to meet stakeholder expectations.

Signup and view all the flashcards

Stakeholder Expectations

The needs, wants, and desires of those affected by an organization's activities, such as customers, employees, and investors.

Signup and view all the flashcards

Dangers of SWOT

Using SWOT ineffectively can lead to long lists without prioritization, overgeneralization, using it as a substitute for analysis, or failing to use it to guide strategy.

Signup and view all the flashcards

Study Notes

Lecture 1: Introduction to Business

  • Business is any profit-seeking organization aiming to create goods or services to satisfy consumer needs.
  • Value is added to products and services by companies before they are offered to consumers.
  • Revenue is the money a company generates through the sale of goods and services.
  • Business models describe how businesses intend to generate revenue.
  • Profit is revenue minus cost
  • Non-profit organizations provide goods and services but do not aim to make a profit.
  • Goods-producing businesses primarily manufacture tangible items (e.g manufacturing, construction, mining, agriculture).
  • Service businesses primarily perform actions that generate a benefit for customers (e.g., finance, transportation, healthcare, insurance, entertainment).

Business Models & Revenue Models

  • Business models describe the structure and strategy of a business; revenue models describe how the business makes customers pay.
  • Business Models and revenue models are different.

Lecture 2: Macro-environment

  • PESTEL framework analyzes political, economic, socio-cultural, technological, environmental and legal factors that affect business.
  • Industry (or sector) - a group of firms producing similar products and services.
  • Market - a group of customers for particular goods or services.
  • Sector - a broad industry group, especially in the public sector.

Lecture 3: Value Net

  • Value net - a map of organizations within a business environment to show cooperation opportunities as well as competition.
  • Focus on different stakeholders, their role and their interactions in the business environment.
  • Characteristics of small businesses: focused, limited resources, more freedom to innovate;
  • Roles of small businesses in the economy: providing jobs, introducing new products, meeting the needs of larger organizations, taking risks.

Lecture 4: PESTEL Analysis

  • PESTEL (political, economic, socio-cultural, technological, environmental, legal) analysis frameworks.
  • This framework identifies possible threats and opportunities for organizations.
  • Provides a thorough analysis and evaluation of risks.

Lecture 5: Industry Life Cycle & Five Forces

  • Industry life cycle - progression of business over time (introduction, growth, maturity, decline).
  • Five Forces Analysis - framework for determining industry attractiveness.
  • Identify and evaluate the strengths and weaknesses, opportunities and threats of an organization and its environment

Lecture 6: Market Equilibrium (Supply & Demand)

Supply- a certain amount of a certain product the seller is willing to sell at a certain price Demand - consumer willingness and ability to purchase, at various prices

Lecture 7: Marketing

  • The process of creating value for customers, communicating, and exchanging offerings that are valuable to customers, clients, partners, and society overall.
  • Marketing identifies opportunities, develops products and services to address those opportunities, and creates branding and advertising strategies for communication with potential customers.
  • There are four Eras of Marketing, with different concentrations on focus:

Lecture 8: Value Propositions

  • Value proposition = value created by a product/service for customer = what differentiates product /service compared to competitors, and why consumers would pay for this product.

Lecture 9: Strategy

  • Strategic plan - establish and accomplish goals and directions; usually done over 2-5 years.
  • Planning - establishing goals, objectives for organization and defining the best approaches.
  • Managing a business - planning, organizing, leading, and controlling.
  • Leading - guiding and motivating to achieve organizational goals.
  • Organizational structure - a way to organize work (department, divisional, matrix, network)

Lecture 10: Human Resource Management

  • Human resource management - specialized function of planning how to obtain, train, evaluate, and compensate employees, this includes:
    • HR planning
    • Job analysis
    • Compensation
    • Recruitment
    • Selection
    • Orientation
    • Performance appraisal
    • Training and development

Lecture 11: Internationalization

  • Globalization - globally interconnected economy
  • Internationalization - any activity in which a business is engaged with a partner in another country.
  • Multinational Corporation (MNC) - a company that conducts business in more than one country
  • Internationalization - drivers, strategy, modes of entry, and challenges associated with international business

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

European Business PDF

Description

Explore the fundamental concepts of entrepreneurship in this comprehensive quiz. Test your knowledge on risk-taking, goal-setting, competition, and the behavior of entrepreneurs in various business scenarios. Ideal for students studying business or anyone interested in understanding entrepreneurship better.

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser