Description

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية‬
‫اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic
University
College of Administrative and Financial Sciences
Assignment-2
MGT402 – Entrepreneurship and Small Business
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Read carefully Grading Rubric below for specific criteria: 0-5 Marks
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism).
• Submissions without this cover page will NOT be accepted.
Entrepreneurship and Small Business
ASSIGNMENT -2
Submission Date by students: Before the end of Week- 11th
Place of Submission: Students Grade Centre
Weight: 10 Marks
Learning Outcome:
1. Utilize strong analytical skills and tools to formulate an effective Bootstrap Marketing Plan
on which a small business can build a competitive edge in the market place. (Lo 1.8).
2. Deliver and communicate marketing massages in coherent and professional manner. (Lo 4.4).
Assignment Workload:
This assignment is an individual assignment.
CRITICAL WRITING
The founder of Almarai is HH Prince Sultan Bin Mohammed Bin Saudi Al Kabeer who recognized
the potential to transform the traditional dairy farming in Saudi Arabia in order to meet the needs of a
growing domestic market. Numerous agricultural projects were developed under his guidance to
achieve the objective of the company. Almarai stepped into the market with the processing of fresh
milk and laban into the modern dairy farms.
The Company has invested heavily in technologically advanced production facilities and recruiting the
right person for the right job. Almarai is considered to be the second and the larger Central Processing
Plant with a new cheese plant along with it. On a daily basis, Almarai is capable of serving high quality
and hygienic products to more than 43,500 customers within the GCC countries. In 2007, Almarai
entered the bakery products market by acquiring Jeddah-based Western Bakeries. Two years later,
Almarai started the construction of a new bakery facility in Al Kharj. In the same year, Almarai
established a joint venture with Chipita and Olayan Finance Company under the name of the Modern
Company Industries to launch 7DAYS brand.
In 2009, Almarai added poultry products to its portfolio through the acquisition of Hail Agricultural
Development Company (HADCO). After investing in an excellent production facility, Almarai
launched the new premium poultry brand – Alyoum. During the same year, Almarai made acquisition
with Mead Johnson Nutrition to form a 50-50 joint venture known as the International Pediatric
Nutrition Company (IPNC).
In 2010, Almarai entered the infant nutrition market with the construction of the region’s first infant
nutrition plant at Al-Kharj. Recognizing that the best way forward involves working with
acknowledged experts in this field, Almarai formed the International Pediatric Nutrition Company
(IPNC), Almarai has recently acquired the entire project and now offers its products under the brands
Nura.
The success of Almarai is because of its unique infrastructure, which includes farms, dairy, juice and
bakery processing plants and also determined by the marketing and distribution expertise, all of which
are working towards delivering a quality product to the consumer.
Product / Services Details
1. Juices: Almarai always uses the best fruit to make the juices that the customers love. It
maintains good balance between good health and great taste. Mixed Fruit, Strawberry,
Alphonso Mango, Orange with Pulp, Orange, Orange and Carrot, Apple, Mango, Mango
Mixed Fruit, Fruit Cocktail, Mixed Berry, lemon with Mint, Guava with Pulp.
2. Home Snacks: Snacks products are the tastier and the simple one which would give relishing
taste. Tinned Cheese, Butter, Ghee, Mozzarella Cheese, Feta Cheese, Whipping Cream,
Tomato Paste.
3. Yoghurts and Desserts: Pure and calcium-rich favourites for the entire family. Desserts are
made from 100% natural, fresh cow’s milk. Yoghurt, Fresh Cream, Labneh, Layered fruit
Yoghurt, Stirred Fruit Yoghurt, Sterilized Cream, Desserts.
4. Culinary Products: Almarai provides the tastiest cheeses, and richest creams which makes
mother’s work easy in the kitchen. Cream Jar Mix, Cheddar Jar Cheese, Sliced Cheese, Square
Cheese Portions, Block Cheddar, Halloumi Cheese.
5. Dairy Liquids: There is a complete range of delicious laban and milk based dairy products for
the entire family. Fresh laban, Fresh Milk, Flavoured Fresh Milk, UHT Milk, Evaporated Milk,
Advanced Nutrition.
6. Kids Products: Kids products prove to be a fun and a healthy bunch for kids. Triangled
Cheese, UHT Flavored Milk, Zady Drinking Yoghurt, Zady Flavored Yoghurt, Zady Jelly
Custard, Zady Fruit Dairy Snack.
Almarai ensures that all its products are properly packed and refrigerated in proper temperatures so
that the products maintain its fresh nature and quality. Liquid products are transported in those
transports which has refrigerator facility so that it does not get spoiled by over time. Almarai mainly
emphasis on quality. Packaging is done in a very clear and uncluttered way so that it is easily
recognizable. The company distributes its products annually which covers more than 110 million
kilometres in delivering dairy, juice, bakery and poultry products reaching up to 43,500 customers
across six GCC states.
Almarai has long-haul fleet which transports raw milk from dairy farms to the Central Processing
Plants and then it transports the finished goods from the production site to different designated sales
locations. Almarai reaches to more than 42,000 shops within the GCC countries on daily basis. It
ensures that the products are properly packed with appropriate temperatures for different products. The
transports are specially designed so that the products are not spoiled and last for longer time.
Almarai transports the finished to small grocery stores and supermarkets. Almarai enjoys increasing
incomes and demands that come from supermarkets where one shop for one’s weekly requirement in
a single visit.
Critical Questions.
1.
2.
3.
4.
Conduct a SWOT analysis for Almarai based on the information given.
Examine the 4 P’s of Almarai based on the information given.
Critically analyze the competitive structure of the organization.
Critically evaluate the product portfolio of Almarai along its USP (Unique selling
prepositions).
The Answer must follow the outline points below:
•
Each answer should be within 400 to 500 range of word counts.
•
Reference
Note: You can support your answer by the course book.
You can use secondary source available on internet.
Entrepreneurship and Effective Small
Business Management, 11/E
Cases
Case #
1
Entrepreneur
& Company Name
Michael Volpatt, Kate
Larkin, and Crista Leudtke
Big Bottom Market
2
Peter Justen
MyBizHomepage
3
4
5
6
Chapter
Reference
Related Topics
Industry: Restaurant, specialty food, and wine
●
Bootstrap marketing and social media marketing
●
Managing cash flow
9
15
Industry: Web-based financial services for small business
owners
1
●
Entrepreneurship
●
Buying/Selling a business
●
E-commerce
●
Sources of financing
●
Human resources management: staffing
7
13
16 and 17
21
Jacqui Rosshandler
Industry: All-natural breath-freshener
Jacquii LLC
●
Managing cash flow
15
●
Sources of equity financing
16
●
Sources of debt financing
17
Lucy Cardenas and Bill Coker
Industry: Restaurant
Red Iguana
●
Buying/Selling a business
7
●
Sources of debt financing
17
●
Management succession
18
●
Choosing a location
22
Rachel Shein and Steve Pilarski
Industry: Wholesale bakery
Baked in the Sun
●
Angela Crawford and Martin
Rodriguez
Industry: Pharmacy
●
Healthcare insurance and the Affordable Care Act
Financial analysis
22
14
Bluffton Pharmacy
7
Angela Crawford and Martin
Rodriguez
Industry: Pharmacy
●
Managing cash flow
15
Bluffton Pharmacy – Part 2
8
9
10
Brian Linton
Industry: Apparel
United By Blue
●
Ethics and social responsibility
●
Strategic management
●
Pricing
2
4
11
Aseem Badshah and Kevin Yu
Industry: Social media services
Socedo
●
Entrepreneurship
●
Sources of equity financing
1
16
Kelly Lester
Industry: Lunchboxes
EasyLunchboxes
●
Bootstrap marketing and social media marketing
●
E-commerce
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Eleventh Edition
Entrepreneurship and Effective
Small Business Management
Norman M. Scarborough
Presbyterian College
Jeffrey R. Cornwall
Belmont University
Boston Columbus Indianapolis New York San Francisco Upper Saddle River
Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto
Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
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Library of Congress Cataloging-in-Publication Data
Scarborough, Norman M.
  Entrepreneurship and effective small business management/Norman Scarborough, Jeff Cornwall.—Eleventh Edition.
    pages cm
   Includes bibliographical references and index.
  ISBN-13: 978-0-13-350632-7
  ISBN-10: 0-13-350632-0
  1. Small business—Management. 2. New business enterprises—Management. 3. Small business—United States—Management. 4. New business
enterprises—United States—Management. I. Cornwall, Jeffrey. II. Title.
HD62.7.S27 2013
657’.9042—dc23

2013039406
10 9 8 7 6 5 4 3 2 1
ISBN-10:
0-13-350632-0
ISBN-13: 978-0-13-350632-7
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Brief Contents
SECTION I
The Rewards and Challenges
of Entrepreneurship 1
Chapter
Chapter
Chapter
Chapter
1
2
3
4
SECTION II
Chapter
Chapter
Chapter
Chapter
Launching a Venture: Entry Strategies
5
6
7
8
SECTION III
SECTION IV
SECTION V
Chapter
Chapter
Chapter
Chapter
SECTION VI
Chapter 23
581
Location, Layout, and Physical Facilities 581
Supply Chain Management 627
Managing Inventory 667
Staffing and Leading a Growing Company 703
Management Succession and Risk Management Strategies
in the Family Business 741
The Legal Environment: Business Law and Government
Regulation 781
The picturebooth co. 817
831
Endnotes
Index
Creating a Solid Financial Plan 453
Managing Cash Flow 489
Sources of Equity Financing 523
Sources of Debt Financing 551
Legal Aspects of Small Business: Succession,
Ethics, and Government Regulation 741
Chapter 22
Cases
305
453
Building an Operating Plan
18
19
20
21
Appendix
273
Building a Bootstrap Marketing Plan 273
Creative Use of Advertising and Promotion
Pricing and Credit Strategies 343
Global Marketing Strategies 375
E-Commerce and Entrepreneurship 413
Building a Financial Plan
14
15
16
17
137
Choosing a Form of Ownership 137
Franchising and the Entrepreneur 165
Buying an Existing Business 201
New Business Planning Process: Feasibility Analysis, Business
Modeling, and Crafting a Winning Business Plan 235
Building a Marketing Plan
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter
Chapter
Chapter
Chapter
Entrepreneurs: The Driving Force Behind Small Business 1
Ethics and Social Responsibility: Doing the Right Thing 37
Creativity and Innovation: Keys to Entrepreneurial Success 71
Strategic Management and the Entrepreneur 105
846
884
iii
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    v
•  
 •  
Contents
Preface
xxiii
Acknowledgments xxvi
SECTION I
Chapter 1
The Rewards and Challenges
of Entrepreneurship 1
Entrepreneurs: The Driving Force Behind Small
Business 1
The Role of the Entrepreneur 2
What Is an Entrepreneur? 5
◼ ENTREPRENEURSHIP IN ACTION
Frontier? 9
Space: The Next Entrepreneurial
How to Spot Entrepreneurial Opportunities
10
Monitor Trends and Exploit Them Early On 10
Travel—and Be Inspired 11
Take a Different Approach to an Existing Market
Put a New Twist on an Old Idea
11
11
Look for Creative Ways to Use Existing Resources
12
Realize That Others Have the Same Problem You Do 12
Take Time to Play
12
Notice What Is Missing
12
The Benefits of Owning a Small Business 13
Opportunity to Gain Control over Your Own Destiny 13
Opportunity to Make a Difference 13
Opportunity to Reach Your Full Potential 14
Opportunity to Reap Impressive Profits
14
Opportunity to Contribute to Society and Be Recognized for Your Efforts 14
Opportunity to Do What You Enjoy Doing
15
The Potential Drawbacks of Entrepreneurship
Uncertainty of Income
15
15
Risk of Losing Your Entire Invested Capital 15
Long Hours and Hard Work 16
Lower Quality of Life Until the Business Gets Established
High Levels of Stress
16
16
Complete Responsibility 17
Discouragement 17
Why the Boom: The Fuel Feeding the Entrepreneurial Fire 17
Entrepreneurs as Heroes 17
Entrepreneurial Education 17
Shift to a Service Economy 17
Technology Advancements 17
Outsourcing 18
Independent Lifestyle 18
E-Commerce, the Internet, and Mobile Computing
International Opportunities
18
19
◼ IN THE ENTREPRENEURIAL SPOTLIGHT Collegiate Entrepreneurs
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The Cultural Diversity of Entrepreneurship
20
Young Entrepreneurs 20
Women Entrepreneurs
21
Minority Enterprises 22
Immigrant Entrepreneurs 23
Part-Time Entrepreneurs 24
Home-Based Business Owners 24
Family Business Owners 24
Copreneurs 26
Corporate Castoffs 27
Corporate “Dropouts” 27
Retired Baby Boomers 28
The Contributions of Small Businesses 28
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR
Start-Up 30
Bulletproofing Your
Putting Failure into Perspective 31
How to Avoid the Pitfalls 32
Know Your Business in Depth
32
Prepare a Business Plan 33
Manage Financial Resources 33
Understand Financial Statements
33
Learn to Manage People Effectively 34
Set Your Business Apart from the Competition 34
Maintain a Positive Attitude 34
Conclusion—and a Look Ahead 34
Chapter Review
Chapter 2
35
•
Discussion Questions
36
Ethics and Social Responsibility: Doing the Right
Thing 37
An Ethical Perspective 39
Three Levels of Ethical Standards 40
Immoral, Amoral, and Moral Management 41
The Benefits of Moral Management
42
Establishing an Ethical Framework 43
Why Ethical Lapses Occur 44
An Unethical Employee 45
An Unethical Organizational Culture 45
Moral Blindness 45
Competitive Pressures
45
Opportunity Pressures
45
Globalization of Business
45
Establishing and Maintaining Ethical Standards 46
Establishing Ethical Standards 46
Maintaining Ethical Standards 46
◼ ENTREPRENEURSHIP IN ACTION But Is It Safe?
Social Entrepreneurship
49
49
◼ IN THE ENTREPRENEURIAL SPOTLIGHT Making a Profit and Making
a Difference 50
Social Responsibility 51
Business’s Responsibility to the Environment 52
Business’s Responsibility to Employees 53
Cultural Diversity in the Workplace 54
Drug Testing 57
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Contents    vii
HIV/AIDS
58
Sexual Harassment 59
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR How to Avoid Sexual
Harassment Charges 62
Privacy
64
◼ ENTREPRENEURSHIP IN ACTION
on Facebook 64
Think Before You Hit “Post”
Business’s Responsibility to Customers 65
Right to Safety
65
Right to Know
66
Right to Be Heard 66
Right to Education
Right to Choice
66
67
Business’s Responsibility to Investors 67
Business’s Responsibility to the Community 67
Conclusion 68
Chapter Review
Chapter 3
68
•
Discussion Questions
69
Creativity and Innovation: Keys to Entrepreneurial
Success 71
Creativity, Innovation, and Entrepreneurship 72
Creativity—Essential to Survival 76
Can Creativity Be Taught?
78
Creative Thinking 78
◼ IN THE ENTREPRENEURIAL SPOTLIGHT The Ingredients of Creativity
Barriers to Creativity
79
81
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR Questions to Spur
the Imagination 85
How to Enhance Creativity 86
Enhancing Organizational Creativity 86
Enhancing Individual Creativity 91
◼ IN THE ENTREPRENEURIAL SPOTLIGHT How to Create a Culture
of Creativity and Innovation 96
The Creative Process 97
Step 1. Preparation
Step 2. Investigation
97
98
Step 3. Transformation 98
Step 4. Incubation 99
Step 5. Illumination 101
Step 6. Verification 101
Step 7. Implementation
Conclusion
102
Chapter Review
Chapter 4
102
103 •
Discussion Questions
103
Strategic Management and the Entrepreneur 105
Building a Competitive Advantage 108
The Strategic Management Process 110
Step 1. Develop a Clear Vision and Translate It into a Meaningful Mission Statement 111
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR Thriving
on Change 113
Step 2. Assess the Company’s Strengths and Weaknesses 114
Step 3. Scan the Environment for Significant Opportunities and Threats Facing
the Business 115
Step 4. Identify the Key Factors for Success in the Business 116
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viii    Contents
Step 5. Analyze the Competition 118
Step 6. Create Company Goals and Objectives 122
◼ ENTREPRENEURSHIP IN ACTION Vizio: Disrupting Another Market 124
Step 7. Formulate Strategic Options and Select the Appropriate Strategies 125
◼ IN THE ENTREPRENEURIAL SPOTLIGHT Strategies for Success
130
Step 8. Translate Strategic Plans into Action Plans 131
Step 9. Establish Accurate Controls 132
Conclusion
134
Chapter Review
135
•
Discussion Questions
136
SECTION II Launching a Venture: Entry Strategies 137
Chapter 5
Choosing a Form of Ownership
The Sole Proprietorship
137
139
Advantages of a Sole Proprietorship 140
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR
Right! 141
Disadvantages of the Sole Proprietorship
142
◼ ENTREPRENEURSHIP IN ACTION What’s in a Name?
The Partnership
Get That Name
143
144
The Uniform Partnership Act 146
Advantages of the Partnership 146
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR
a Business Divorce 148
How to Avoid
Disadvantages of the Partnership 149
Limited Partnerships 150
Limited Liability Partnerships 151
The Corporation 151
Requirements for Incorporation 151
Advantages of the Corporation 152
Disadvantages of the Corporation
154
Professional Corporations 155
The S Corporation 155
Advantages of an S Corporation
156
Disadvantages of an S Corporation 157
When Is an S Corporation a Wise Choice? 157
The Limited Liability Company
Social Enterprises 160
157
◼ IN THE ENTREPRENEURIAL SPOTLIGHT From the Life on the Street
to Running a Business 160
Chapter 6
Nonprofit Organizations
161
Chapter Review
•
163
Discussion Questions
164
Franchising and the Entrepreneur
What Is a Franchise? 167
Types of Franchising 168
The Benefits of Buying a Franchise
A Business System
165
168
169
Management Training and Support 170
Brand-Name Appeal 171
Standardized Quality of Goods and Services 171
National Advertising Programs
Financial Assistance
171
172
Proven Products and Business Formats
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Contents    ix
Centralized Buying Power
173
Site Selection and Territorial Protection 173
Increased Chance for Success
174
Drawbacks of Buying a Franchise 175
Franchise Fees and Ongoing Royalties 175
Strict Adherence to Standardized Operations
176
Restrictions on Purchasing 176
Limited Product Line
Market Saturation
177
177
Limited Freedom 178
No Guarantee of Success
178
Franchising and the Law
178
◼ ENTREPRENEURSHIP IN ACTION
After the Cheering Stops 181
The Right Way to Buy a Franchise 182
Evaluate Yourself 183
Research the Market 183
Consider Your Franchise Options 184
Get a Copy of the FDD and Study It
184
Talk to Existing Franchisees 185
Ask the Franchisor Some Tough Questions 185
Make Your Choice
187
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR Make Sure You Select
the Right Franchise 187
Franchise Contracts 188
Termination 190
Renewal 190
Transfer and Buybacks
190
◼ IN THE ENTREPRENEURIAL SPOTLIGHT The Allure of Franchising
Trends in Franchising
190
191
Changing Face of Franchisees
191
Multiple-Unit Franchising 192
International Opportunities
192
◼ IN THE ENTREPRENEURIAL SPOTLIGHT The Middle East: A Hot Spot
for Franchising 193
Smaller, Nontraditional Locations 195
Conversion Franchising 195
Refranchising
195
Area Development and Master Franchising 195
Cobranding 196
Serving Dual-Career Couples and Aging Baby Boomers 197
Franchising as a Growth Strategy
197
Unique Concept 197
Replicable 197
Expansion Plan 198
Due Diligence
198
Legal Guidance
198
Support for Franchisees 198
Conclusion
198
Chapter Review
Chapter 7
198 •
Discussion Questions
Buying an Existing Business
Buying an Existing Business
199
201
203
Advantages of Buying an Existing Business 203
Disadvantages of Buying an Existing Business
205
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x    Contents
The Search Stage
208
Self-Inventory 208
Develop a List of Criteria 209
Potential Candidates
Investigation
209
210
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR
When You Buy a Business 212
The Deal Stage
Don’t Get Burned
212
Methods for Determining the Value of a Business
213
◼ IN THE ENTREPRENEURIAL SPOTLIGHT Bond Coffee 222
Negotiating the Deal 223
Letter of Intent 226
The Due Diligence Process
227
◼ ENTREPRENEURSHIP IN ACTION What’s the Deal?
The Transition Stage
Chapter Review
Chapter 8
233
231
232
•
Discussion Questions
234
New Business Planning Process: Feasibility Analysis,
Business Modeling, and Crafting a Winning Business
Plan 235
Conducting a Feasibility Analysis 237
Industry and Market Feasibility Analysis 237
Product or Service Feasibility Analysis: Is There a Market?
Financial Feasibility Analysis: Is There Enough Margin?
242
243
Entrepreneur Feasibility: Is This Idea Right for Me? 245
Developing and Testing a Business Model 247
Value Proposition 247
Customer Segments
248
Customer Relationships
Channels
248
248
Key Activities 248
Key Resources 248
Key Partners 248
Revenue Streams
249
Cost Structure 249
◼ ENTREPRENEURSHIP IN ACTION The Evolution of CoolPeopleCare’s
Business Model 250
The Benefits of Creating a Business Plan 251
Three Tests That Every Business Plan Must Pass
Reality Test
252
252
Competitive Test 252
Value Test
252
◼ IN THE ENTREPRENEURIAL SPOTLIGHT The Battle of the Plans 253
The Elements of a Business Plan 254
Title Page and Table of Contents 255
The Executive Summary 255
Mission and Vision Statement 255
Company History 256
◼ IN THE ENTREPRENEURIAL SPOTLIGHT A Business Plan: Don’t Launch
Without It 256
Description of Firm’s Product or Service 257
Business and Industry Profile
258
Goals and Objectives 258
Business Strategy
258
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Competitor Analysis 259
Marketing Strategy
259
Visualizing a Venture’s Risks and Rewards
263
What Lenders and Investors Look for in a Business Plan
Capital
265
265
Capacity
265
Collateral 265
Character
265
Conditions 265
The Pitch: Making the Business Plan Presentation 266
Conclusion 268
Suggested Business Plan Elements 268
Chapter Review
271 •
Discussion Questions
SECTION III Building a Marketing Plan
Chapter 9
272
273
Building a Bootstrap Marketing Plan 273
Creating a Bootstrap Marketing Plan 274
◼ IN THE ENTREPRENEURIAL SPOTLIGHT Bootstrap Marketing
in the New Music Industry 276
Market Diversity: Pinpointing the Target Market 277
Determining Customer Needs and Wants Through Market Research 278
How to Conduct Market Research 280
◼ IN THE ENTREPRENEURIAL SPOTLIGHT Bootstrap Marketing Using
Databases 282
Plotting a Bootstrap Marketing Strategy: Building a Competitive Edge
Find a Niche and Fill It
283
284
Retain Existing Customers
285
Concentration on Innovation 285
The Marketing Mix
Product
288
288
Promotion
296
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR Marketing
to Millennials 298
Price
302
Place
303
Chapter Review
304 •
Discussion Questions
304
Chapter 10 Creative Use of Advertising and Promotion 305
Define Your Company’s Unique Selling Proposition
Creating a Promotional Strategy 307
306
Publicity 307
Personal Selling 309
◼ ENTREPRENEURSHIP IN ACTION Should an Ambulance Service Hire
Its First Sales Representative? 311
Advertising
312
Selecting Advertising Media
Media Options 316
314
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR E-Mail Ads That
Produce Results 322
How to Prepare an Advertising Budget 339
How to Advertise Big on a Small Budget 340
Cooperative Advertising 340
Shared Advertising
341
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Stealth Advertising 341
Other Ways to Save 341
Chapter Review
341
•
Discussion Questions
Chapter 11 Pricing and Credit Strategies
342
343
Pricing: A Creative Blend of Art and Science 344
Three Powerful Pricing Forces: Image, Competition, and Value 348
Price Conveys Image 348
Competition and Prices 349
Focus on Value
350
Pricing Strategies and Tactics 351
New Product Pricing: Penetration, Skimming, or Sliding 352
Pricing Techniques for Established Products and Services 354
◼ IN THE ENTREPRENEURIAL SPOTLIGHT How to Compete with Cheap
Knockoffs of Your Successful Product 355
◼ ENTREPRENEURSHIP IN ACTION Social Coupons: Beneficial—or Just Plain
Bad—for Business? 359
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR Enhancing Your
Company’s Pricing Power 361
Pricing Techniques for Retailers 362
Markup
362
Pricing Techniques for Manufacturers 364
Direct Costing and Pricing 365
Computing a Break-Even Selling Price 365
Pricing Techniques for Service Businesses 367
The Impact of Credit on Pricing 369
◼ ENTREPRENEURSHIP IN ACTION To Accept Credit Cards or Not:
That Is the Question 369
Credit Cards 370
Chapter Review
372
•
Discussion Questions
Chapter 12 Global Marketing Strategies
373
375
Why Go Global? 378
Going Global: Strategies for Small Businesses 381
Creating a Presence on the Web 381
◼ IN THE ENTREPRENEURIAL SPOTLIGHT Going Global One Step
at a Time 383
Relying on Trade Intermediaries 384
The Value of Using Trade Intermediaries 385
Joint Ventures
387
Foreign Licensing 388
International Franchising
388
◼ ENTREPRENEURSHIP IN ACTION Growing Beyond the Borders
391
Countertrading and Bartering 392
Exporting 392
◼ LESSONS FROM THE STREET-SMART ENTREPRENEUR
in the World 400
Finding Your Place
Establishing International Locations 402
Importing and Outsourcing 402
Barriers to International Trade
404
Domestic Barriers 404
International Barriers
405
Political Barriers 406
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Business Barriers 406
Cultural Barriers
407
International Trade Agreements 408
World Trade Organization
408
North American Free Trade Agreement 409
The Dominican Republic-Central America Free Trade Agreement 409
Conclusion
409
Chapter Review
411 •
Discussion Questions
411
Chapter 13 E-Commerce and Entrepreneurship 413
Factors to Consider Before Launching into E-Commerce 416
Ten Myths of E-Commerce 418
Myth 1. If I Launch a Site, Customers Will Flock to It 418
Myth 2. Online Customers Are Easy to Please 420
Myth 3. Making Money on the Web Is Easy 420
Myth 4. Privacy Is Not an Important Issue on the Web 420
Myth 5. “Strategy? I Don’t Need a Strategy to Sell on the Web! Just Give Me a Web Site,
and the Rest Will Take Care of Itself” 421
Myth 6. The Most Important Part of Any E-Commerce Effort Is Technology 422
Myth 7. On the Web, Customer Service Is Not as Important as It Is in a Traditional Retail
Store 422
Myth 8. Flashy Web Sites Are Better Than Simple Ones 423
Myth 9. It’s What’s Up Front That Counts
424
Myth 10. My Business Doesn’t Need a Web Site 424
Strategies for E-Success
425
Focus on a Niche in the Market 426
Develop a Community
426
Attract Visitors by Giving Away “Freeb