Chapter 8 notes MGT 490
Chapter 8 notes MGT 490 Management 490
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This 3 page Class Notes was uploaded by Briana Notetaker on Sunday March 6, 2016. The Class Notes belongs to Management 490 at Western Illinois University taught by Yin-Chi Liao in Winter 2016. Since its upload, it has received 49 views. For similar materials see Business Strategy in Business, management at Western Illinois University.
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Date Created: 03/06/16
MGT 490 Chapter 8 Entrepreneurial Strategy Entrepreneurial: The creation of new value by an existing organization or new ventures that involves the assumption of risk An entrepreneur that engages in entrepreneurship Recognizes a valuable idea Organizing necessary resources Assumes financial and legal risks Receives the financial rewards Value can be created in many different contexts including: Start-up ventures Major corporations Family-owned businesses Non-profit organizations Established institutions Opportunity recognition: The process of identifying, selecting, and developing potential opportunities that can be exploited. Ways to identify an opportunity: Observing trends: Solving a problem: Think of your own problems, Observe people’s challenges, Listen to people’s complaints Finding gaps in the marketplace: A gap in the marketplace is often created when a product or service is needed by a specific group of people but doesn’t represent a large enough market to be of interest to mainstream retailers or manufacturers For an opportunity to be viable, it needs to have four qualities: Attractive: Market demand created by meeting the unmet needs, solving a pain point, or the gaps in the market Achievable: Practical and physically possible Durable: The window of opportunity must be open long enough to achieve market- required returns Value creating: Robust margin and profitability Opportunity analysis framework: Create value Potential margin Financial resources HR, organizational resources Financing for Entrepreneur: Debt Financing, money that must be repaid Personal resources Personal savings Family and friends Bank loans/Finance companies: Offer lines of credit Government loans: Small Business Administration (SBA) Crowdfunding (peer-to-peer lending): A system of linking those in need of capital with lenders Equity Financing, money invested by owners or those purchasing stock Angel financing: Typically wealthy individuals (often former corporate executives) Venture capital firms Positives Professional help and experience Large network of contacts Unbiased expertise Creditability Negatives Dilution and control Return expectation Not irreversible Entry Strategies: Pioneering new entry A radical new product or highly innovative service that changes the way business is conducted. Imitative new entry Products or services that capitalize on proven market successes and that usually has a strong marketing orientation. Adaptive new entry A product or service that is somewhat new and sufficiently different to create value for customers by capitalizing on current market trends.