1

What type of legal form business you want to open… discuss

General Partnerships: The enterprise is a kind of a business

formed between two or more partners who are usually
natural persons. In the general partnership all the partners
are considered as traders and are jointly responsible to meet
all the business liabilities or obligations without any limits.
This means that if the partnership funds cannot meet its
liabilities, creditors can recover their debts from the
partner’s private properties.
Advantages: Easy to establish / Balancing skills / Division of
profit easily reference to the agreement among partners /
Large pool of capital / Ability to attract limited partners /
Flexibility)
Disadvantages: (Unlimited liabilities / lack of continuity if
one partners die / Authority conflict among partners)

Q1: Mention the legal forms of the business ownerships and

discus the advantages and disadvantages for the three major
Types?
➢This is the legal obligation of a business owner to use
personal money and possessions to pay the debts of the business.
Advantages
- Profit incentive,
- No special legal restriction
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- Easy to discontinue
Disadvantages
- Lack of continuity
- Limited capital, and unlimited liability
- Feel isolated, limited skills and capabilities
Q2: Mention the advantages and disadvantages of the
corporation, and the characteristics of each type?
➢ Characteristics
-Joint Stock Companies
The number of founders of a joint stock company should not be
less than three founders, and consequently the number of
shareholders cannot go below three at any time.

-Limited Liability Companies The number of partners of a

limited liability company cannot be less than two persons and
cannot exceed fifty

Advantages
-Limited Liability for stakeholders
-Ability to attract capital
-Ability to continue indefinitely
-Transferable ownership
Disadvantages
-High cost for incorporation process
-Double taxation
-legal requirement and regulations more complicated
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-Loss of control by the founders

-Loyalty of experts and employees
Q3: Discus what is meant by franchise and mention the
characteristics of franchisor and franchisee.
➢ A franchise is an agreement by which the owner of an
intellectual right, a potential property, or a brand product who is
called the "franchisor". Gives another person called the
"franchisee" the exclusive right to use or exploit this intellectual
right
(Table in the pdf)
Q4: Mention the different between the sole proprietorship and
general partnership
➢ Sole proprietorship
✓A sole proprietor (or sole trader) is a natural person, who
engages in a commercial activity for his or her own account.
➢ General Partnerships
✓The partnership is a kind of a business firm formed between
two or more partners who are usually natural persons.
Q5: Mention the different between the Limited Liabilities
Company and general partnership company?
➢ Simple Limited Partnership
✓In a simple limited partnership. Consist of two types of
partners. General partners are liable for partnership debts to the
extent of their entire personal wealth.
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➢ Limited Partnerships by Shares the limited partnership by

shares, is similar to the joint stock company with the exception
that at least one of the founders has unlimited liability in
meeting the company's financial liabilities.
Q6: Classify the types of companies (legal forms of business)
according to the owner's obligations?
Joint Stock Companies
Limited Liability Companies
Q7: Mention the characteristics of the joint stock companies and
numerate the advantages and disadvantages?
➢ The Egyptian Joint Stock Company is similar in its main
features to the same kind of companies existing anywhere else in
the world. Thus, it is a regulated company whose capital is
divided into shares, the liability of each shareholder is limited to
the value of his or her shares, and the shares can be traded in the
stock exchange.
Advantages
-Limited Liability for stakeholders
-Ability to attract capital
-Ability to continue indefinitely
-Transferable ownership
Disadvantages
-High cost for incorporation process
-Double taxation
-legal requirement and regulations more complicated
-Loss of control by the founders
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-Loyalty of experts and employees

Q8: Discuss the characteristics of each of the following: (Joint
venture, Mergers, and Acquisitions)
➢ Joint venture
✓ Joint venture is a popular strategy that occurs when two or
more companies form a temporary partnership or consortium for
the purpose of capitalizing on some opportunity.
➢ Mergers and Acquisitions
✓A merger
❖ occurs when two companies or organizations of about equal
size combine to form one enterprise.
✓An acquisition
❖ occurs when a large organization purchases (acquires) a
smaller firm or vice versa.
Q9: Mention the function area of business and discuss 3 of them
in details:
➢ Function area of the Business
1. Management
2. Operations
3. Marketing
4. Accounting
5. Finance
6. Human resource
✓ Management
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Managers are responsible for the work performance of other

people.
Management involves planning for, organizing, leading, and
controlling a company’s resources
✓ Marketing
Marketing consists of everything that a company does to
identify customers’ needs (i.e. market research) and design
products to meet those needs.
✓ Human resource:
Human resource development or personnel management or
manpower management is concerned with obtaining and
maintaining of a satisfactory and satisfied workforce i.e.,
employees.
Q10: Mention the managerial level and the Skills needed for
each managerial level
➢ the company is consistent with the plans of both top and
middle management. It’s at this level that most people acquire
their first managerial experience.
✓ Middle managers: are in the center of the management
hierarchy (found between the lowest and top levels of the
organization).

✓ first-line managers: They’re responsible for developing and

implementing activities and allocating the resources needed to
achieve the objectives set by top management. (Technical and
human skills are needed).
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✓ Top managers: who are responsible for the health and

performance of the organization (conceptual and human-skills).

❖The Skills:
1) Technical skills: are the manager’s ability to understand and
use the techniques, knowledge, tools, and equipment of a
specific discipline or department
2) Human skills: include the ability to communicate, build
relationship, collaborate, motivate, and lead employees to meet
organizational goals through individual and team assignments
3) Conceptual skills: determine a manager’s ability to see the
organization as a unified whole and to understand how each part
of the overall organization interacts with other parts.
Q20: Mention the sources of opportunity and discuss 2 of them?
*Problems
*Changes
*New Discoveries
*Existing Products and Services
*Unique Knowledge
Discussion:
-Changes: Our world is continually changing, changes in laws
and regulations, Social customs, local and national trends, even
the weather
-Problems: Many well-known companies were started because
an entrepreneur wanted to solve a problem.
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Q21: Enumerate the advantages and disadvantages of buying a

new business as a choice of turning ideas into business?

Advantages:
- A successful existing business may continue success
- Operated equipment installed already
- Trained employees,
- Operating equipment,
- Merchandise and supplies on hand,
- Established credit for making new purchases,
- Established procedures for running the company
Disadvantages:
- Improper business behavior negatively affects the goodwill of
the company.
- The business location may have become unsatisfactory or un
desirable
- Equipment and facilities may be obsolete or inefficient
- Difficult to implement any change
- Inventory that is too large and/or unsalable
- Established policies
- Inflated sale price

Q22: Enumerate the disadvantages of buying a Franchise as a

choice of turning ideas into business. Then numerate the benefits
gained when an entrepreneur buys a franchise?
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•The benefits gained when an entrepreneur buys a

franchise?
1) Proven System: Most franchises have a system in place that
has already been tested.

2) Customer Awareness: People tend to deal with businesses

they recognize and trust.

3) A franchisor provides initial training on how to operate the

business.

4) Exclusive Geographical Area: A franchisor allows only a

certain number of franchises to operate within a particular
region.

5) Easier Financing: Bankers are often more likely to lend

money to an individual buying a franchise, because historically
franchises have a high rate of success.

•Disadvantage of buying franchise:

1) Buying a franchise means entering into a formal agreement
with the franchisor.

2) Franchise agreements determine how you run your business,

so there may not be much room for creativity.
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3) There are usually restrictions on your workplace, the products

you sell and the suppliers you use.

4) Poor performance by other concessionaires may affect the

concessionaire’s reputation.

5) Buying a franchise means continuous sharing of the profit

with the franchisor.

6) Grantees are not required to renew the agreement at the end

of the concession period.

Q23: What are the consideration entrepreneur should

consider before purchase a business that already exists.
Then numerate advantages and Disadvantages of this
choice?
1) Initial and Ongoing Fees: When you first buy a franchise, you
pay a fairly high fee for the right to operate it.
2) Less Entrepreneurial Freedom: Starting a new business or
buying an independent business presents decision making
freedom.

Q12: What are the traits of leaders then mention the

differences between manager and leader. What are the
sources of power can the leader to influence employees?
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➢ Leader is someone who can influence others and who has

managerial authority
∆Once someone starts to exhibit personality traits that could
make them an effective leader.

Question: Mention the four types of leaderships? (Styles)

1) Autocratic leader: chooses to make majority of decisions on
his own. If your team feels they don’t have a chance to develop
and feel not invested in, then most probably the leadership style
you are using is autocratic style.
2) Bureaucratic leader: One of its advantages is that it helps in
situations where cutting costs and improving productivity are
priorities.
3) Charismatic leader: leadership style when commitment to a
vision is the most important aspect of a team’s functioning
4) Democratic leader: can’t be used in decision making.
In situations that need every team member to contribute their
own creativity and knowledge to the process, the best leadership
style to adapt is democratic leadership.

Differences:
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Manager
Focus on system
Administers / maintain
Accept reality
Short range view
Does things right
Efficiency: refers to getting
the most output from the least
amount of inputs.
Eye on bottom line
Accepts status quo
Leader
Focus on people
Innovate and develop
Investigate reality
Long range view
Does the right thing
Effectiveness/Good leaders
share: empathy and self-
awareness and objectivity.
Eye on horizon
Challenges status quo

•the sources of power are:

✓One source of power is the leader’s position in the company.
Another source of power is a leader’s expertise and experience.
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Q13: What is management? What is the difference between

efficiency and effectiveness, then Mention the Managerial
functions and discuss 2 of them?
➢ Management is the process of achieving organizational
objectives through people and other resources
➢Differences:
Management strives for high efficiency and high effectiveness
which is equivalent to high goal attainment and low resource
waste.

Efficiency Effectiveness
Means Ends
Resources usage Goal attachment
Low waste High attainment

Managerial functions are:

Planning, Organizing, Staffing, Directing, Controlling.

-Planning is the process of anticipating future events and

conditions and determining courses of actions for achieving
organizational objectives.

-Controlling assesses the success of the planning function and

provides feedback for future rounds of planning.
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Q14: Mention the entrepreneur characteristics and discuss 4

of them?
(Personal only)

1) High Energy Level: Entrepreneurs work long and hard to

realize their visions.

2) Creativity: Entrepreneurs typically conceive new ideas for

goods and services

3) Self-Confidence and Optimism: Entrepreneurs believe in their

ability to succeed, and they instill their optimism in others.

4) Internal Locus of Control: Entrepreneurs have an internal

locus of control, which means they believe that they control
their own destinies.

5) Vision

6) Tolerance for failure

7) Need to achieve

8) Tolerance for ambiguity

Q15: Mention the types of entrepreneurs?

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-Types of entrepreneur:
1) Opportunity entrepreneurs

2) Necessity entrepreneurs

3) Serial entrepreneurs: those who repeatedly start businesses

and grow them to a sustainable size before striking out again.
Q16: Mention the difference between manager and
entrepreneur?

Manager Entrepreneur
Seeks a profitable opportunity
Doesn’t bear any risk involved Risk taker / assumes risks and
in enterprise uncertainty
Servant Owner
Salary which is fixed and Profits which are highly
certain uncertain and not fixed
Executes plan prepared by the Innovator / change agent
entrepreneur :Thinks over what and how to
produce goods to meet the
changing needs of the
customer
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Main motive is to render Main motive is to start a

services in enterprise already
set by someone else
Possess distinct qualifications
in terms of sound knowledge
in management theory and
practice
venture for his personal
gratification.
needs to possess qualities and
qualifications like high
achievement motive ,
originality in thinking ,
foresight , risk- bearing ability

Business model

What is business model:

⇒ a business model describes the value an organization

offers its customers and illustrates the capabilities and
resources required to create, market and deliver this value
and to generate profitable, sustainable revenue streams.

* The nine blocks cover the four main areas of a business:

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Customers: the source of short and long term profits.

The Offer or the value proposition offered to customers.

Infrastructure: Organization, partners, processes, systems.

Economic Viability (financially): Ability to sustain profits,

liquidity, stability and efficiency. In other words the Costs &
Revenue.

1)the 9 building blocks of business model:

1. CS (Customer Segments)
2. VP (Value Propositions)
3. CH (Channels)
4. CR (Customer Relationships)
5. RS (Revenue Streams)
6. KR (Key Resources)
7. KA (Key Activities)
8. KP (Key Partnerships)
9. CS (Cost Structure)

*Discuss in detail:*

1- Customer Segments: defines the different groups of people

organization an enterprise aims to reach and serve
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2- Value propositions: describes the bundle of products and

services that create value for a specific Customer Segment.

3- The Channels: describes how a company communicates with

and reaches its Customer Segments to deliver a Value
Proposition

4- Customer Relationships: describes the types of relationships a

company establishes with specific Customer Segments.

5- Revenue Streams: represents the cash a company generates

from each Customer Segment (costs must be subtracted from
revenues to create earnings).

6- Key Resources: describes the most important assets required

to make a business model work.

7- Key Activities: describes the most important things a

company must do to make its Business model work.

8- Key Partnerships: describes the network of suppliers and

partners that make the business Model work.

9- Cost Structure: describes all costs incurred to operate a

business model.
** Explain the three benefits that contribute to the Value
perceived by your customers?
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•Functional; faster, larger, safer, performs better,

•Emotional; provides good feelings or intellectual stimulation.
•Symbolic; provides status or affiliation with others.

** Give some examples on how to make the competitive

advantage sustainable.
• Low cost leader (Economies of scale, economies of scope,
production/process efficiency)
• Barriers to entry; patents, high capital requirements, licenses,
etc.
• Branding
• Outstanding management or staff
• Very strong cash liquidity
• Ongoing Innovation
• Mixture of hard to imitate capabilities
• Product differentiation
**Various channels are used to spread Awareness of the
product/service to the customers. Mention some of these
channels? **
-Personal selling
-Pamphlets and brochures that can be distributed
-Online ads using Google technology for customized ads
-Ads in community specific periodicals
-Signs
-Professional shop front design
-Social Media
-Snow ball referrals.
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*Mention the 7 Ps of “Marketing a business”, and explain

three?
1. Product: the range of product and service mix offered to
customers.
2. Price: part of comprehensive revenue management and
pricing plan
3. Place
4. Promotion
5. Process
6. People: developing human resources plans and strategies to
support positive interactions between hosts and guests.
7. Physical Evidence

➥The various factors that determine trade area

attractiveness?

•Proximity of other competing businesses

•Mix of businesses in your community

•Traffic patterns

* Destination attractions
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“One of the main factors responsible for the success of a

Community Business is its layout design. Mention the
objectives of a proper layout design:”

1. To attract a large number of customers.

2. To increase the sale of a store.
3. To reduce the selling expenses to a minimum.
4. To provide customer convenience and smooth operation.
5. To have space for reserve for stock, office and resting place
for the employees.
6. To have a proper entrance for coming goods.
7. To project a professional image and improve general
appearance.
8. To minimize the movement of customers within the Business.

* Mention & explain the 4 criteria that can be used to

segment your customers?

Geographic;
1- Primary trading area (contains 55-70% of customers)
2- Secondary trading area (contains 15-25% of customers)
3- Tertiary trading area (contains the remaining customers)

Demographic; Age, income, gender, social class, occupation,

etc.

Psychographic; lifestyle, personality, values

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Behavioral; consumption rate, consumption type, benefits

sought.

Leadership is a skill that can be learnt and practiced. a.

Mention and explain the three traits a successful leader
should have?
a. Desire to Lead
b. Commitment to the mission and vision of the organization
c. Integrity

-Integrity, as a leadership trait, should be practiced

continuously. Mention and explain the three key areas
needed for this:
a. Sincerity: The absence of pretending, deceit, or hypocrisy
b. Consistency: Treating team members equally as much as
possible.
c. Substance

2-outline a general approach to producing innovative

business model options:
1. Team composition
2. Immersion
3. Expanding
4. Criteria selection
5. Prototyping
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7) Business plan serves two essential functions:

1. First, it guides the company’s operations by charting its future
course and devising a strategy for following it. The plan
provides a battery of tools, a mission statement, goals,
objectives, budgets, financial forecasts, target markets, and
strategies, to help the entrepreneur lead the company
successfully.
2. The second function of the business plan is to attract lenders
and investors. A business plan must prove to potential lenders
and investors that a venture will be able to repay loans and
produce an attractive rate of return.

8-Tests that the Business plan must pass:

1. The reality test
2. The competitive test
3. The value test.
(The first two tests have both an external and internal
component)

*Business plan:*

1) the most important reasons for preparing the business

plan:

1. Raise funds; directed to investors and financing parties

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2. Obtain approvals; a business unit/department from mother

company
3. Documented Reference; to have a documented reference for
everyone
4. Create a management tool; to use as a management guideline
5. Check the feasibility of a business opportunity

2) The business plan stakeholders:

1. Entrepreneur & Management team

2. Employees
3. Potential customers
4. Lenders
5. Suppliers
6. Investors

3) The core components of a business plan:

1. Cover and title page
2. Executive summary
3. Table of contents
4. Business description
5. Service description
6. Marketing plan
7. Financial plan
8. Management team
9. Operations
10. Appendices
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4) Business plan serves two essential functions:

1. First, it guides the company’s operations by charting its future

course
And devising a strategy for following it. The plan provides a
battery of
Tools, a mission statement, goals, objectives, budgets, financial
Forecasts, target markets, and strategies, to help the entrepreneur
lead
The company successfully.

2. The second function of the business plan is to attract lenders

and
Investors. A business plan must prove to potential lenders and
Investors that a venture will be able to repay loans and produce
an
Attractive rate of return.

5) Tests that the Business plan must pass:

1. The reality test

2. The competitive test
3. The value test.
(The first two tests have both an external and internal
component)
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Goals:

1) Mention three types of Goals, giving one example on each:

1. Outcome goals – End results
2. Process goals – behaviors & steps to achieve an outcome goal
3. Learning goals – acquire relevant knowledge &/or skills

2) The benefit of properly constructed goals:

1. Goals increase focus and concentration
2. Goals increase motivation/persistence
3. Goals lead to increased energy
4. Setting goals increase achievement
5. Goals lead to self-efficacy

3) What does the term “SMART Goals” mean?

Specific: Clearly defined; detailed; picturesque
Measurable: progress can be measured
Achievable: Challenging but possible
Relevant: Important for you; your own dream
Time-Bound: Has a deadline

4) Mention & explain the possible financial goals of a company:

Profitability
Liquidity
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Efficiency
Stability

Starting business from scratch

1) Possible reasons :

✤Entrepreneurs can work for themselves.

✤Entrepreneurs want to build their own business in the way

they want.

✽Entrepreneurs want more money.

✽Entrepreneurs want to take on additional roles.

2) Advantages of starting your business from scratch

✥ Independence and flexibility. You'll have more freedom and

independence working for yourself.

✱ Personal fulfillment. Owning and running your own business

can be more satisfying and fulfilling than working for someone
else.
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✳ Power.

❆ Money.

3) Advantages of buying an independent or established

business:

- A successful existing business may continue success; the new

owner's objective should be to make those modifications that
will attract new customers while retaining the company's
existing customers.

- The location of the existing business could be a major

opportunity, where an existing business's biggest asset may be
its prime location.

- Operated equipment installed already, and its production

capacity well known.

- Trained employees,

- Operating equipment,

- Merchandise and supplies on hand,

4) Disadvantages:
 29

- Improper business behavior negatively affects the goodwill of

the company.

- Employees often do not welcome a new owner because they

feel threatened by change. Some employees may not be able to
adapt to the new owner's management style, and a culture clash
may result.

- The business location may have become unsatisfactory or UN

desirable

- Equipment and facilities may be obsolete or inefficient

- Difficult to implement any change or innovation

- Inventory that is too large and/or unsalable

- Established policies and procedures do not match with new

ownership’s philosophy

- Inflated sale price

- Undesirable established Contracts with customer or suppliers

5) Mention the 3 location options for your Startup :

1. Traditional Brick-&-Mortar store
2. Web-based startup
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3. Entrepreneur’s home

6)Three strategic essentials should be considered before

implementing a business. Mention and explain them?

A) Vision: a concise statement that defines the mid- to long-term

(three- to ten-year) goals of an organization.

B) Mission: a concise and clearly worded mission statement that

briefly describes your business or practice, what it intends to
accomplish, and for whom it will be provided.

c) Values.

-Types of decision:
 31

4- Types of Decisions:
1. Structured problems and programmed decisions
2. Unstructured problems and non-programmed decisions

5- Decision-Making Conditions:
1) CERTAINTY.
2) RISK

7- The Strategic Management Process:

1) Mission, vision , value
2) Environmental analysis
3) Segmentation
4) Strategies
8- Strategy: is a pattern or plan that integrates an organization’s
major goals, policies and action sequences into a whole
9- Vision (What do we want to become?): is the result of an
entrepreneur’s dream of something that does not exist yet and
the ability to paint a compelling picture of that dream for
everyone to see.
10- Vision is based on an entrepreneur’s values. A clearly
defined vision helps a company in four ways:
1- Vision provides direction
2- Vision determines decisions.
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3- Vision motivates people.

4- Vision allows a company to persevere in the face of adversity
 11- Mission statements (Why do we exist?): enduring
statements of purpose that distinguish one business from other
similar firms.
 12-Mission Statement Component = Mission elements:
1) Customers
2) Employees
3) Self-concept
4) Public image
5) Philosophy
6) Markets
7) Product services
8) Technology
9) Survival growth profit
 13-Mission statement Criteria:
• Market-Oriented
• Realistic
• Specific
• Based on Competencies
• Appropriate for the environment
• Motivating

 14- Values: Are the beliefs of an individual or group, and in

this case the organization, in which they are emotionally
invested.
 15- core values every organization should have: (four)
 33

1. Integrity and Ethics

2. Respect
3. Innovation (Not Imitation)
4. Driven for continuous improvement

 16- Goals: Are the broad, long-range attributes that a

business seeks to accomplish, Goals are not intended to be
specific enough for a manager to act on but simply state the
general level of accomplishment sought.

 17- Objectives: are more specific targets and smart. They

define the things that entrepreneurs must accomplish if they are
to achieve their goals and overall mission

 18- Comparison between goals and objectives:

Goals Objectives
Broad Narrow
General intentions Precise
In tangible Tangible
Abstract Concrete
Can’t be validated “as is” Can be validated “as is”

 19- Common objectives address:

Profitability, Productivity, Growth, Efficiency, Markets,
Financial Resources, Physical Facilities,
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Organizational Structure, Employee Well-being, and Social

Responsibility.
 20- Objectives typically must :
(1) be related directly to the goal;
(2) Be clear, concise, and understandable;
(3) be stated in terms of results;
(4) begin with an action verb;
(5) specify a date for accomplishment;
(6) Be measurable
 21-SMART model:
1) Specific: A specific objective has a much greater chance of
being accomplished than a general one. To set a specific
objective, you must answer the six “W” questions:
Who: Who is involved?
What: What do I want to accomplish?
Where: Identify a location.
When: Establish a time frame.
Which: Identify requirements and constraints.
Why: Specific reasons, purpose or benefits of accomplishing the
objective.
2) Measurable: Establish concrete criteria for measuring
progress toward the attainment of each objective you set. To
determine whether your objective is measurable, ask questions
Such as:
How much?
How many?
How will I know when it is accomplished?
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3) Achievable
4) Realistic
5) Timely
 22-External and Internal analysis:
1) Pest analysis: (political, economic, social/cultural, and
technological factors)
2) Swot analysis: (Helps in understanding the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or
business activity.)
3) Tows analysis

PEST analysis:
(Political, economic, social/cultural, and technological factors):
It is a tool for understanding the political, economic, socio-
cultural and technological environment that an organization
operates in.
SWOT analysis:
Internal factors (strengths – weakness)
External factors (opportunities – threats)
TWOS matrix:
Maximize the competencies and overcome and eliminate
weaknesses and threats in order to get the best utilization of
company competitiveness.

 23-role of pest analysis:

 36

1) It is a significant model which comprehensively analyses the

external situation surrounding the
2) Company this analysis help managers understand the external
environment by which they can use this
Analysis in developing strategic planning.

 24- Pest analysis:

•political
•socio-culture
• Technological
•economic
 25-compnents of swot analysis:
Strengths, Weaknesses, Opportunities, and Threats

 26- The mechanism of swot analysis:

It starts by defining the objective of the project or business
activity and identifies the internal and
External factors that are important to achieving that objective.
Strengths and weaknesses are usually internal to the
organization, while opportunities and threats are usually
external.
 27-role of swot analysis:
1) SWOT Identify the competitive advantage of the company
and its competencies.
2) SWOT Help managers in strategic decision-making process
by listing the opportunities and threats,
 37

- Relation between pest and swot analysis (I should write the

functions of both)

 28-The mechanism of tows analysis:

WT Strategy (mini-mini): minimizes both weaknesses and
threats.
The WO Strategy (mini--maxi): minimize the weaknesses and to
maximize tile opportunities
The ST Strategy (maxi-mini): maximize the former while
minimizing the latter
The SO Strategy (maxi-maxi): maximize both, strengths and
opportunities

 29- competencies: are resources and capabilities that serve as

a source of a firm’s competitive advantage over rivals.
Core competencies distinguish a company competitively and
reflect its personality.
Core competencies emerge over time through an organizational
process of accumulating and learning how to deploy different
resources and capabilities. As the capacity to take action, core
competencies are “crown jewels of a company,” the activities
the company performs especially well compared with
competitors and through which the firm adds unique value to its
goods or services over a long period of time.
Core competencies are a unique set of skills, knowledge, or
abilities that a company develops in key areas, such as superior
quality, customer service, innovation, engineering,
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teambuilding, flexibility, speed, responsiveness, and others that

allow it to perform vital processes to world-class standards and
to vault past competitors. They are the things that a company
does best and does far better than its competitors.
 30- competitive advantage: the aggregation of factors that
differentiates a small business from its competitors and gives it a
unique and superior position in the market.

31- Four criteria of sustainable competitive advantage:

1*Value capabilities
2*Rare capabilities
3*Costly to imitate capabilities
4*Non substitutable capabilities

32- The mechanism of Competitive Analysis Model

application/implementation:
Reducing the Bargaining Power of Suppliers
Reducing the Treat of New Entrants
Reducing the Competitive Rivalry between Existing Players
Reducing the Bargaining Power of Customers
Reducing the Threat of Substitutes
 33- Marketing Mix is a combination of all of the factors at a
marketing manger’s command to satisfy the target market

 36- gap analysis is an:

Examination of your current
Performance for the purpose of
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Identifying the differences

Between your current state of
Business and where you’d like to be.
 37- 4 Steps to Completion of gap analysis
1. Identify the current state.
2. Identify where you want to be.
3. Identify the gaps.
4. Formulate improvements to close the gaps.

 39-External Environmental Analysis through

1) Scanning
2) Monitoring
3) Forecasting
4) Assessing

Porter five forces (competitive analysis):

1) Porter five forces: Identify the company situation among its

competitors and other external barriers related to the industry

2) Porter five forces: Analyzing the industry’s barriers and tack

in order to overcome it and gain competitive advantage by
taking the suitable action or strategy.
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3) Porter five forces: Analyzing the external environment

helping in designing appropriate strategic plan.

4) Porter five forces:

1- Treat of New Entrants
2- Bargaining Power of Suppliers
3- Bargaining Power of Customers
4- Threat of Substitutes products
5- Rivalry among competing firms

5) The mechanism of application/implementation:

• Reducing the Bargaining Power of Suppliers
• Reducing the Treat of New Entrants
• Reducing the Competitive Rivalry between Existing
Players
• Reducing the Bargaining Power of Customers
• Reducing the Threat of Substitutes

 40-Porter Generic Strategies:

Describe how a company pursues competitive advantage across
its chosen market scope. There are three/four generic strategies,
-cost leadership: This strategy involves the firm winning market
share by appealing to cost-conscious or price-sensitive
customers. This is achieved by having the lowest prices in the
target market segment, or at least the lowest price to value ratio.
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-focus: This dimension is not a separate strategy for big

companies due to small market conditions. Big companies
which chose applying differentiation strategies may also choose
to apply in conjunction with focus strategies (either cost or
differentiation)
-differentiation: A differentiation strategy is appropriate where
the target customer segment is not price-sensitive, the market is
competitive or saturated, customers have very specific needs
which are possibly under-served, and the firm has unique
resources and capabilities which enable it to satisfy these needs
in ways that are difficult to copy.
 40- The purpose for analyzing
Financial Statements:
1- Transform data into information.
2- Build trends from information.
3- Project forecasts from trends.
4- Use forecasts in planning.
5- Extract ratios for comparison and benchmarking.
6- Evaluate performance and identify weaknesses.
7- Plan corrective action. 8- Evaluate the firm’s stock and bonds.
9- Evaluate the firm’s financial position and assess its ability
Core competencies:
Are resources and capabilities that serve as a source of a firm’s
competitive advantage over rivals. Core competencies
distinguish a company competitively and reflect its personality.

Intellectual capital:
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Is the knowledge and information a company acquires and uses

to create a competitive edge in its market segment.
Marketing mix (4ps):
1- Product
2- Place
3- Price
4- Promotion
Marketing mix (7ps):
1- Products
2- Price
3- Promotion
4- Place
5- People
6- Process
7- Physical evidence

Financial ratios: (match)

1- Return on Equity (ROE): This measure indicates how much
income was earned for every dollar invested by the owners.
2- Return on Assets (ROA) or (ROI): This ratio is generally
considered the best overall measure of a company’s profitability.
3- Financial Leverage percentage: Financial leverage is the
advantage or disadvantage that occurs as the result of earning a
return on equity that is different from the return on assets.
4- Quality of Income: A ratio higher than 1 indicates high-
quality earnings.
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5- Profit Margin: This ratio tells us the percentage of each sales

dollar that is income.
6- Quick Ratio (Acid Test): the extent to which a firm can meet
its short-term obligation without relying on the sale of its
Inventories.
7- Debt-to-total-assets: The percentage of total funds that are
provided by creditors.
8- Debt-to-equity: the percentage of total funds provided by
creditors versus by owners.
9- Long-term Debt-to-equity ratio: the balance between debt
and equity in a firm’s long term capital structure.
10- Times-interest-earned ratio: the extent to which earnings
can decline without the firm becoming unable to meet its annual
interest costs.

Outline a general approach to producing innovative business

model options:
1- Team composition
2- Immersion
3- Criteria selection
4- Prototyping
5- Expanding

A business plan serves two essential functions:

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1- It guides the company’s operations by charting its future

course and devising a strategy for following it.
2- To attract lenders and investors.
To get external financing, an entrepreneur’s plan must pass
three tests with potential lenders and investors:
1- Reality Test: The external component of the reality test
revolves around proving that a market for the product or service
really does exist. It focuses on industry attractiveness, market
niches, potential customers, market size, degree of competition,
and similar factors. Entrepreneurs who pass this part of the
reality test prove in the marketing portion of their business plan
that there is strong demand for their business idea. The internal
component of the reality test focuses on the product or service
itself.
2- Competitive Test: The external part of the competitive test
evaluates the company’s relative position to its key competitors.
The internal competitive test focuses on management’s ability to
create a company that will gain an edge over existing rivals. To
pass this part of the competitive test, a plan must prove the
quality, skill, and experience of the venture’s management team
3- Value Test: To convince lenders and investors to put their
money into the venture, a business plan must prove to them
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Extra information:

9) Opportunity: is a consumer need or want that can be met by a

new business
Venture and has a commercial.
10) Start a new business: is one of your choice when you need to
turn Ideas into
Opportunities.
11) Buying an existing Business:
Advantages:
Trained employees, Operated equipment installed already, its
production capacity well known, operating equipment,
Merchandise and supplies on hand.
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