Well, I guess that based on the business plan draft what type of employees will this business have? what will be their roles and responsabilities

a. Considering the Porter Model, from what sectors would Ronnie’s competitors be coming? What kinds of threats do they pose to his business?

The new entrant is probably the sector where competitors would come from, especially those in the same constraint Ronnie. In this case, they are capable of offering low prices. Low prices are a competitive threat to his business, as it may result in a business shutdown.

b. Pick two tactics from the list in Exhibit 7.3 and explain how they could be applied to Ronnie’s business. Explain why you think those tactics would work.

Ronnie could use a ‘new product introduction’ with the finest quality through differentiating from his competitors. Using tactical action, Ronnie could use the ‘product/service’ by offering a suggested more extended warranty, which could improve the market. When the two actions are combined, quality is improved, allowing him to find a market niche where customers value products based on quality and not its cost.

c. Industry experts say that SEO is an industry on the rise. What are the implications for Ronnie as he plans to run his business?

‘SEO is an industry on the rise’ insinuates that there is a market providing him with an opportunity to grow despite the competition (Katz and Green, 2017). Staying in the market would be an excellent deal for Ronnie, and he should focus more on markets that value the quality of products sold. Furthermore, customers are likely to increase when they are pleased with what their money has bought.

E. Chapter 7:

1. What is meant by industry analysis? How does industry analysis help an individual in the strategy process? Industry analysis (IA) is a research process that provides the entrepreneur with key information about the industry. Entrepreneurs do an IA to find out what the profits are in an industry in order to better estimate possible financial returns. Finding out how those profits are generated often makes the difference between success and failure because the entrepreneur can tell if the industry is growing, stable, or in decline and what the degree of competition is. It can also help them determine if they have or can get the expertise needed to run a profitable business. (Pg.207)

2. Name and describe the different types of generic strategies.  Differentiation, cost, and focus. Differentiation strategies; entrepreneurs try to show how their firms offer some value benefits that are different and better than the ones offered by competitors. Cost strategy, try to show how their firms offer cost benefits that appeal to the customer. Focus strategies target a portion of the market, called a segment or niche. (Pg. 210) Small businesses identify a focus or combination strategy by figuring out what benefits the market most wants. Then, they use differentiation or cost approaches that are reformulated for the niche market.

3. Describe Michael Porter's Five-Forces Model of industry competition. Why is it important to pay attention to these five forces of competition?  There are two sources of competition: supply chain, and from within the industry. The supply chain includes suppliers and buyers. The industry sources come from existing competitors, other start-ups business, and the other alternatives or substitutes; customers have been using instead of your product. Rival are direct competition, substitutes and alternatives are indirect competition. These can change the profitability. (Pg. 214)

4. What is an entry wedge? Explain any five of the entry wedges. Entry wedge is an opportunity that makes it possible for a new business to gain a foothold in a market.

Customer contracting: Occurs when a customer, often a business, is willing to sign a contract with a small business to ensure a product or service.

Second sourcing: seeks out customers who are already being serviced by another firm offering customers a second place to obtain goods or services.

Market relinquishment: Market relinquishment occurs when business firms leave a market. Supply shortages: When a new product is in demand and buyers are willing to pay a premium to be the first to have the product. Unutilized resources: can be a physical or a human resource. The key benefits are lower costs, scale savings, or organizational practices. (Pg.212)

5. Differentiate between strategic actions and tactical actions. Strategic actions are competitive responses requiring a major commitment of resources. Examples of strategic actions are: entering new markets, new product introductions, changing production capacity, and mergers or alliances. Tactical actions are competitive responses with low resource requirements. Examples of tactical actions are: price cutting (or increases), product or service enhancements, increased marketing efforts, and new distribution channels. (Pg.214-215)

Chapter 8:

1. Explain the market section of a classic business plan. The market section talks about your customers—who they are and what they are like, who else is pursuing them, and how you plan to get or keep your customers. Market and Target Customer: Refers to the people or firms you plan to sell. The target customer section focuses attention on the individual who would buy your product or service, how often they buy, their past experience with your kind of product or service, and what they are looking for when buying your product or service. Competition and Competitive Advantage: It identifies the major competitors for your market by name and location, price, competitive strength, and competitive weakness. Marketing Strategy: Focuses on three ideas: (1) The overall strategy your firm pursues, (2) the sales plan that shows the specific ways you apply strategy to secure sales from your customers, and (3) the longer-term competitive plan that shows how you protect your firm of the competition. (Pg.235)

2. Explain the financial components of a business plan. The one-page financial summary section starts with a paragraph showing the overall financial results. It is followed by "The Ask," which is what you are seeking from others. Projections then follows as the central component of the Appendix. The financial statements expected include: (1) income statements and its assumptions, (2) cash flow and its assumptions, and (3) balance sheet and its assumptions. For start-up businesses, it is also common to include a listing of the expenses incurred in the start-up process. For an existing business, the financials report the last two years of actual data, and then offer three-year projections for the income, cash flow, and balance sheet. (Pg.238-239)

3. Explain the different types of special-purpose plans. There are seven other special-purpose types of plan: Screening plan: Also called a mini-plan, it gives the basic overview of the firm and a detailed look at the financials. Informational plans: Give potential customers or suppliers information about the company. Key employee/partner plan: Provides information on the company, product/service, market, and critical risks to prospective business or marketing partners

Invention plan: A business plan that provides information to potential licensees.

Operational plan: Business plans designed to be used internally for management purposes. Private placement memorandum: A specialized legal form of business plan crafted by lawyers. (Pg.244)

4. Discuss some of the common critical risks in a business plan. Every business face risk in the real world, so every business plan needs to spend some time addressing them.

1. Experience deficits: experience in the line of business, the industry, managing? Have it or find it. 2. Numbers that are wrong: Examples include balance sheets that do not balance

3. Inadequate cushion: The number one killer of young firms is, not enough money. Having enough cash to survive three months goes a long way to avoiding this risk. 4. Inadequate payback: Any plan that does not clearly specify the key paybacks will fail to sell them on the idea. 5. Narrative and financials do not fit: If you have a plan that calls for a large marketing campaign, but financials do not show costs for one, there is a problem. reader. (Pg.247)