Imagine you have a friend who has created a new board game. A prototyping lab in the College of Engineering where your friend goes to college made him a prototype of the game, which he took to a trade show; it received an enthusiastic response. He even obtained orders for 2,000 copies of the game. When you asked your friend how he plans to pay for the initial production run of the game, he said that he plans to bootstrap his company and will pay for everything from his profits. Does your friend have a good sense of the financial implications of launching a new product into the marketplace? What scenario is more likely to play out for your friend?
Answer to relevant QuestionsThere is a discussion early in this chapter of the need to prepare for growth. What actions did Scott Norton and Mark Ramadan take that demonstrate their commitment to trying to fully understand growth and its ramifications ...What are the economies of scale and economies of scope and why are these important to entrepreneurial firms? Think of a company that sells a product or service that’s similar to SwitchFlops, in that the product or service provides a natural segue to add-on products or services. Briefly explain the product and its built-in avenues ...What is the difference between technology licensing and merchandise and character licensing? Provide examples of both types of licensing and how they can increase a firm’s sales. Cisco Systems, Microsoft, and IBM often acquire small, technology-based entrepreneurial firms. Why would Cisco Systems, Microsoft, and IBM, which each employ hundreds of product development specialists and engineers, buy ...
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