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3) Based upon the Monday Evening class on entrepreneurship, discuss the pros
and cons of having a venture funded internally (Dashed) versus the pros and
cons of having a venture that is funded externally (Jebbit).
-----Pros Cons of Dashed: Pros= hired employees from money already made
cons= had to wait to expand because he had to make the $$
---- Pros Cons of Jebbit: Pros= have more money can expand when want to
Cons= have to sell it to the investors and more responsibility
Pros of Internal Funding (Dashed)
No startup debt
Phil owns the entire company
(no equity given out for loans)
4) In chapter 3 of The Lexus and the Olive Tree, Thomas Friedman argues that
one of the chief challenges in the era of globalization is for countries and
individuals to find a healthy balance between their olive tree and the Lexus.
What does he mean by this?
----- He says to survive economically you have to build the best lexus (best
economy) but not at the cost of giving/selling out your country. If you sell out,
the olive rooters will rebel and say no and a country cant move forward.
-
China was culturally rooted in the olive tree and didnt try to
globalize on top of the following
1.) Government Regulations
2.) Gender Roles (women in the house, not out working)
3.) Absence of free market
-----1) Why innovate when govt gonna take it away
2) against tradition
3) agricultural influence
4) defined classes (poverty to rich)
5) gender- no women rights
6) complacency
7) David Landes, in the chapter The Invention of Invention in his Wealth and
Poverty of Nations, mentions some reasons why innovation flourished
in Europe during the Middle Ages. List three of these reasons.
----- -
----- Customer Power is high: few buyers, large-volume buyers, products are
undifferentiated, few switching costs for buyers
Ex. 1) telecommunications equipment, offshore drilling, and bulk chemicals
have large volume buyers and high fixed costs therefore they are powerful.
9) Describe 2 conditions where the threat of substitute products is high in an
industry. Use an example of an industry to illustrate your argument.
Supplier power high when there are few suppliers but many
buyers
Switching costs are high for the buyer
Product being sold is differentiated
PC Industry- CPU and processor made by Windows and
Intel: concentration of power in these companies because all PCs
need a CPU and processor
------- Supplier power is high when: more concentrated than the industry it sells
to, suppliers dont depend on industry for $$$, offer differentiated products.
Switching costs in switching suppliers, no substitute, suppliers might enter
market
Ex. 1) Microsoft near monopoly in operating systems (PC assemblers)
2) Pharmaceutical companies with different PATENTED drugs..
3) airplanes need pilots, no substitute for a good pilot
11) Describe 2 conditions where a rivalry among existing competitors is
intense. Use an example of an industry to illustrate your argument.