Exam 13: Strategies for Growth and Managing the Implication of Growth

Creating a positive organization culture involves:

Most life-style entrepreneurs eagerly pursue firm growth.

Financial reporting to shareholders,bankers,and other investors give the marketing cost for each product and highlight the performance of managers in controlling costs.

A cash sensitivity analysis is used to provide a pessimistic and an optimistic cash estimate.

Acknowledgment that only a small amount of time is actually under one's control and that most of one's time is taken up by others is known as the:

To implement participative management the entrepreneur should have open communication with employees.

Explain the 4 types of entrepreneurs and firm growth. Entrepreneurs in the upper-right quadrant possess both the necessary abilities to make the transition to a more professional management approach and the aspiration to grow their businesses.These are the entrepreneurs who are the most likely to achieve firm growth. Entrepreneurs in the upper-left quadrant possess the necessary abilities for transition but do not aspire to do so.These are the entrepreneurs of firms that have unused potential.A relatively large proportion of all lifestyle firms are represented by this classification. Entrepreneurs in the lower-right quadrant aspire to grow their businesses but do not possess sufficient abilities to successfully satisfy this aspiration. These entrepreneurs are most likely to be frustrated by the firm's lack of growth and are in the most danger of failure because the firm may be pushed toward the pursuit of growth opportunities and beyond the entrepreneur's ability to cope. Entrepreneurs in the lower-left quadrant possess neither the necessary abilities to make the transition to a more professional management approach nor the aspirations to grow their businesses.These businesses have little potential for growth,and due to the limited abilities of the entrepreneur to manage growth,these firms may actually perform better if they remain at a smaller scale.

When a manufacturer buys a chain of retail stores that carry its products,it is an example of backward integration.

Even though some entrepreneurs may way to grow they lack the ability to do so.

A product development strategy relies on taking market share from competitors.

Using a penetration strategy,the entrepreneur attempts to encourage existing customers to buy more of the firm's current products.

_______ strategies involve developing and selling new products to people who are already purchasing the firm's existing products.

Which of the following would NOT be a recommended diversification strategy?

Horizontal integration occurs at the same level of the value-added chain but simply involves a different,but complementary,value-added chain.

A computer company buys a hard-drive manufacturer.This is an example of:

Discuss the three types of market development strategies and give examples of each. A.New geographical market - This simply refers to selling the existing product in new locations.For example,a firm selling its products in Singapore could start selling its products in Malaysia,Thailand,and IndonesiA.This has the potential of increasing sales by offering products to customers who have not previously had the chance to purchase them.The entrepreneur must be aware of possible regional differences in customer preferences,language,and legal requirements that may necessitate a slight change in the product (or packaging). B.New demographic market - Demographics are used to characterize (potential)customers based upon their income;where they live;their education,age,and sex;and so on.For an entrepreneur that is currently selling the firm's existing product to a specific demographic group,the business could grow by offering the same product to a different demographic group.For example,a studio currently produces and sells computer games (specializing in games on baseball and soccer)to males between the ages of 13 and 17.However,there is an opportunity for this company to expand its sales by also targeting males between the ages of 24 and 32 who are university educated,have high disposable incomes,and would likely enjoy the escapism of these computer game products. C.New product use - An entrepreneurial firm might find out that people use its product in a way that was not intended or expected.This new knowledge of product use provides insight into how the product may be valuable to new groups of buyers.For example,when I moved from Australia to Chicago,I bought a baseball bat.I did not use the bat to play baseball;rather I kept it beside my bed for security against anyone who might break into my apartment.Another example is four-wheel-drive vehicles.The original producers of this product thought that it would be used primarily for off-road recreational driving but found that the vehicle was also popular among housewives because it was big enough to take the children to school and carry all their bags and sporting equipment.Knowledge of this new use allowed the producers to modify their product slightly to better satisfy customers who use the product in this way.An advantage from using a market development strategy is that it capitalizes on existing knowledge and expertise in a particular technology and production process. Note: Textbook examples are listed for instructor's use,others could be given and can be evaluated on an individual basis by the instructor.

The entrepreneur has which of the following responsibilities regarding taxes?

As a firm grows,higher volume increases production efficiency and increases its bargaining power with suppliers.

Forward integration occurs when the firm acquires one of its suppliers.

Which principle states that the most important issues should be attended to during the time of day that an entrepreneur is most efficient?