Midterm2_StudyGuide.doc

Midterm2_StudyGuide.doc - BUS2 131D Study Guide, Midterm 2...

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BUS2 131D Study Guide, Midterm 2 Dr. Michael Merz 1. Business Model Development (Chapter 6) What is a business model? Used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies. In the most basic sense, a business model is the method of doing business by which a company can sustain itself -- that is, generate revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain. What is strategic management? The process of developing a game plan to guide a company as it strives to accomplish its vision, mission, goals, and objectives and to keep it from straying off course. Why is strategic management important? It’s a blueprint for matching the company’s strengths and weaknesses to the opportunities and threats in the environment. It helps cope with a hostile, ever- changing environment. What is a competitive advantage? The aggregation of factors that sets the new venture apart from its competitors and gives it a unique position in the market that is superior to its competition. (Blockbuster Video) What is a sustainable competitive advantage? Is gained through the new venture’s ability to develop a set of core competencies that enable it to serve its selected target customers better than its rivals. Why and how must new ventures create a competitive advantage? The key to business success is to develop a unique competitive advantage, one that creates value for customers and is difficult for competitors to duplicate. A company that gains a competitive advantage becomes a leader in its market and can achieve above-average profits. What role do core competencies play in creating a sustainable competitive advantage? Sustainable competitive advantage is gained through the new venture’s ability to develop a set of core competencies that enable it to serve its selected target customers better than its rivals. 1
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BUS2 131D Study Guide, Midterm 2 Dr. Michael Merz What are core competencies? A unique set of capabilities that a company develops in key operational areas that allow it to vault past competitors. (Superior quality, customer service, innovation, team-building, flexibility, responsiveness.) What are natural advantages? Often linked to a new venture’s “smallness”. What is intellectual capital and what components does it entail? Often, intellectual capital constitutes the source of competitive advantage in the marketplace: o Human capital o Structural capital o Customer capital What are the nine steps in the strategic planning process? Understand what each step entails. 1) Develop a vision and translate it into a mission statement.
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Midterm2_StudyGuide.doc - BUS2 131D Study Guide, Midterm 2...

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