Chapt 2 Q's - A strategy is a road map a business man draws...

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1. Explain the Characteristics of effective objectives. Why is setting objectives important? They are Specific- Objectives should be quantifiable and precise. They are measurable- Entrepreneurs should be able to plot their companies progress toward its objectives. They are assignable- Businesses need to create objectives that are assignable to the right management with the right responsibility. They are realistic, yet challenging- Objectives must be within the reach of the organization or motivation will disappear. They are timely- objectives need to specify when the goal is to be accomplished. ** They are written down- The writing does not need to be complex, but needs to be done to get the goal in the right direction. Setting objectives is important because arranging these objectives in a hierarchy according to their priority can help business owners resolve conflicts when they arise. 2. What are business strategies? Explain 3 strategies from which entrepreneurs can choose. Give example of each.
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Unformatted text preview: A strategy is a road map a business man draws up of the actions necessary to fulfill a companies missions, objectives, and goals. 1) Cost leadership- Strives to be the lowest cost producer relative to its competitors. E.g.- Dollar Tree has the lowest cost producing store in the business. 2) Differentiation- this kind of company seeks to build customer loyalty by positioning its goods or services in a unique or different fashion. E.g.- Petco, a pet supply store sells luxury pet items and products, and only 40 of its more than 10,000 product offerings overlay the pet supply offerings of Wal mart. 3) Focus- recognizes that not all markets are homogeneous. There are many different customer segments, each having different needs, want and characteristics. The principal is to selects one or more segments and approach them with a good or service designed to excel that need. E.g. Left handed people or petite clothing for customers....
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