1、2022-5-13IB-CHAPTER621.Identify advantages & disadvantages of being an entrepreneur & creating a business2.Identify market conditions that should be assessed before entering a market3.Explain how to develop a competitive advantage4.Explain how to develop a business plan5.Identify risks of a

2、business & explain how to manage them2022-5-13IB-CHAPTER63initiativesegmentsmarket sharebusiness planeconomies of scalebusiness risk2022-5-13IB-CHAPTER64Small businesses are created by entrepreneurs who have a business idea & willing to invest their own money to back the ideaInternet makes t

3、he process easierSome useful websites: p1672022-5-13IB-CHAPTER65SBA: The Small Business Administration web site provides many resources related to creating a small businessYahoo !: Yahoo ! Small Business Site http:/ a good place to find links for more information American

4、 Express: American Express Small Business Site http:/ provides much information and links that can help during start up.2022-5-13IB-CHAPTER66DisadvantagesAdvantages- Profit Potential- Your Own Boss-Direct Rewards-More self-satisfaction- Loss Potential- Accountability- Failure Possibility2022-5-13IB-

5、CHAPTER67Risk toleranceCreativityInitiative need to have ambition need to be persistent2022-5-13IB-CHAPTER68DemandCompetitionLabor conditionsRegulatory conditions2022-5-13IB-CHAPTER69partially influenced by general economic conditions: buy more when economy strong & have a good income influenced

6、 by conditions within the specific market of concern eg. baby clothes number of baby born hotels in Florida weatherchanges over time within a particular marketA firm should closely examine: Product Markets ChangeFlexibility2022-5-13IB-CHAPTER610Market share: a firms sales volume as a percentage of t

7、he total sales in a specific marketLimited competition: easier to increase market share, (higher price), more revenueIntense competition, market share may decline, lower price, less revenue2022-5-13IB-CHAPTER6112022-5-13IB-CHAPTER612 by types of customers by quality2022-5-13IB-CHAPTER613Labor CostsU

8、nions2022-5-13IB-CHAPTER614state/government regulationsespecially restrictive regulationsindustry regulations2022-5-13IB-CHAPTER6152022-5-13IB-CHAPTER616Exhibit 5.12022-5-13IB-CHAPTER617After tracking pet industry statistics for more than a decade, The American Pet Products Manufacturers Association

9、 (APPMA) released new figures today proving the pet industry is leading the pack. Pet spending has more than doubled from $17 billion in 1994 to a projected $35.9 billion for 2005. And, according to the U.S. Census Bureau, the pet industry is now the seventh largest retail segment in the country*.In

10、 2005, Americans spending on pets is projected to be higher than ever: $14.5 billion for food $8.8 billion for supplies and O-T-C medications $8.6 billion for veterinarian care $1.6 billion for live animal purchases $2.4 billion for other servicesPet spending in 2004 was even more successful than pr

11、ojected, with total sales coming in at $34.4 billion. This positions the pet industry 60 percent larger than the toy industry ($20 billion) and 33 percent larger than the candy industry ($24 billion). Source:/press_releasedetail.asp?id=51 - 33k acessed 7/11/052022-5-13IB-CHAPTER618Ways

12、to maintain or increase market share: ONE of FOUR Low-cost production Better quality than competitors Product differentiation Technological Advantage (Revise for GLOBAL Markets)2022-5-13IB-CHAPTER619Produce products efficiently efficient management of HR efficient management of production processPro

13、duce Higher-Quality Products higher quality without excessive costs2022-5-13IB-CHAPTER620Advantage of Web-Based Business replace a store reach additional customersExpenses of Web-Based Business cost of developing a website & installing a shopping cart system cost of screening credit card payment

14、s cost of paying a website firm monthly fee cost of paying marketing expenses to increase its visibility to customers2022-5-13IB-CHAPTER621Firms use SWOT analysis to develop a competitive advantage Assess strengths and weaknesses Identify opportunities and threats Use strengths to capitalize on oppo

15、rtunities & reduce exposure to threats.2022-5-13IB-CHAPTER622Intense competition can separate the performance of well-managed firms from poorly managed firmsFirms should: Assess its competitors. Develop a competitive advantage.2022-5-13IB-CHAPTER623Many firms attempt to monitor market conditions

16、 on their own. Wall Street JournalValue Line Investment SurveyStandard and Poors Industry O2022-5-13IB-CHAPTER624Some firms are more exposed to industry conditions than other firms.Factors The firms market share The firms focus on its main industry Starbucks vs. McDonalds2022-5-

17、13IB-CHAPTER625Use a SWOT Analysis for your company.Which Strategy will you company use? List 4 tactics you will employ2022-5-13IB-CHAPTER6261.Environments2.Management3.Marketing4.Financial2022-5-13IB-CHAPTER627a detailed description of the proposed business, incl. description of product or service,

18、 types of customers, resources needed for production, marketing needed, & financing required.2022-5-13IB-CHAPTER628Economic IndustryGlobal2022-5-13IB-CHAPTER6292022-5-13IB-CHAPTER630Organization ProductionH.R.PRESMGRSALESSALESSALES2022-5-13IB-CHAPTER6312022-5-13IB-CHAPTER632Authority and respons

19、ibility and clearly defined. Often centralised with the most important decisions being taken by senior management. A narrow span of control. Each manager has a small number of employees under their control. This means that employees can be closely supervised. Clearly defined promotion path.Can be bu

20、reaucratic and respond slowly to changing customer needs and the market. Communication across various sections can be poor especially horizontal communication. 2022-5-13IB-CHAPTER6332022-5-13IB-CHAPTER634More/Greater communication between management and workers. Fewer levels of management which incl

21、udes benefits such as lower costs.Better team sprit. Structure limited to small organisations.Function of each department/person could be blurred and one may merge into the job roles of others. 2022-5-13IB-CHAPTER635Product PricingDistributionTarget MarketPromotion2022-5-13IB-CHAPTER6362022-5-13IB-C

22、HAPTER6372022-5-13IB-CHAPTER6382022-5-13IB-CHAPTER639FinancingFeasibility2022-5-13IB-CHAPTER6402022-5-13IB-CHAPTER6412022-5-13IB-CHAPTER6422022-5-13IB-CHAPTER643Potential revenuePotential demand for product or servicePotential expensesProfit potential2022-5-13IB-CHAPTER644Advice and basic information Yahoos Small Business site American Express Small Business AdministrationFinancing Options Quicken Small Business G The ElevatorBu