OBM cheat sheet

Porter's Five Forces: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitutes, rivalry among existing competitors; high combined force intensity compresses industry profitability.

SWOT analysis classifies internal strengths and weaknesses against external opportunities and threats; it is a descriptive audit, not a strategy-selection tool.

Porter's generic strategies: cost leadership, differentiation, and focus (cost focus or differentiation focus); firms lacking a clear generic strategy are 'stuck in the middle'.

Ansoff matrix axes are product (existing/new) and market (existing/new), yielding market penetration, product development, market development, and diversification.

BCG matrix classifies business units by market growth rate and relative market share into stars, cash cows, question marks, and dogs.

VRIO test: a resource must be valuable, rare, inimitable, and organizationally supported to yield sustained competitive advantage.

Corporate-level strategy spans vertical integration, horizontal integration, diversification, and outsourcing; related diversification presumes economies of scope across businesses.

Strategic management process: mission and vision, external and internal analysis, strategy formulation, strategy implementation, and evaluation and control.

Maslow's hierarchy ascends physiological, safety, social, esteem, and self-actualization needs; lower needs are typically satisfied before higher ones motivate.

Herzberg's two-factor theory separates hygiene factors (pay, working conditions, policy) that prevent dissatisfaction from motivators (achievement, recognition, growth) that produce satisfaction.

Vroom's expectancy theory: Motivation = Expectancy × Instrumentality × Valence; a value of zero on any term yields zero motivation.

Equity theory holds that employees compare their outcome/input ratio with referents; perceived inequity motivates restoring equity by altering inputs, outcomes, or the referent.

Tuckman's group development stages: forming, storming, norming, performing, and adjourning.

Big Five personality dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism (emotional stability).

HR planning process: job analysis produces job descriptions and specifications, which feed recruitment, selection, training, performance appraisal, and compensation.

Turnover rate = (separations during period ÷ average number of employees during period) × 100; a rising rate signals retention problems requiring diagnosis.

Marketing mix 4Ps: product, price, place, and promotion; services marketing adds people, process, and physical evidence (7Ps).

Product life cycle stages: introduction, growth, maturity, and decline; pricing and promotion tactics shift by stage (e.g., skimming in introduction, price competition in maturity).

Market share = (firm sales ÷ total market sales) × 100; relative market share = firm share ÷ largest competitor's share.

Customer lifetime value (CLV) = sum of expected future contribution margin per customer, discounted to present value, minus acquisition cost.

Break-even volume for a price change = fixed costs ÷ (unit price − unit variable cost); the contribution margin per unit is the denominator.

STP process: segmentation, targeting, and positioning; effective segments are measurable, accessible, substantial, differentiable, and actionable.

Price elasticity of demand = percentage change in quantity demanded ÷ percentage change in price; demand is elastic when the absolute value exceeds 1.

AIDA model of communication effects: attention, interest, desire, and action, describing the hierarchy a buyer moves through.

Accounting equation: Assets = Liabilities + Owners' Equity; every transaction preserves the balance.

Current ratio = current assets ÷ current liabilities; quick ratio = (current assets − inventory) ÷ current liabilities.

Net working capital = current assets − current liabilities; a negative value signals potential liquidity stress.

Time value of money: FV = PV × (1 + r)^n and PV = FV ÷ (1 + r)^n; annuity present value uses the discount factor sum over the payment periods.

Net present value = present value of cash inflows − initial investment; accept independent projects with NPV > 0.

Weighted average cost of capital (WACC) = (E/V) × Re + (D/V) × Rd × (1 − tax rate), where V = E + D.

DuPont decomposition: ROE = net profit margin × total asset turnover × equity multiplier.

Accrual basis records revenue when earned and expenses when incurred, independent of cash timing; the matching principle pairs expenses with the revenue they generate.

Economic order quantity (EOQ) = √(2DS ÷ H), where D = annual demand, S = order cost, H = annual holding cost per unit.

Little's Law: average inventory = average throughput rate × average flow time; it holds for any stable system.

Inventory turnover = cost of goods sold ÷ average inventory; days of inventory = 365 ÷ inventory turnover.

Capacity utilization = actual output ÷ design capacity × 100; effective capacity accounts for planned downtime and allowances.

Process types by volume-variety: project, job shop, batch, assembly line, and continuous flow; lower volume and higher variety favor earlier types.

Lean principles: specify value, map the value stream, create flow, establish pull, and pursue perfection; the seven wastes include overproduction, waiting, transport, overprocessing, inventory, motion, and defects.

Supply chain bullwhip effect: demand variability amplifies upstream; causes include forecast updating, order batching, price fluctuation, and rationing.

Six Sigma targets 3.4 defects per million opportunities; DMAIC phases are define, measure, analyze, improve, and control.

Price elasticity of demand = (% change in quantity) ÷ (% change in price); demand is elastic when |E| > 1, inelastic when |E| < 1, unit elastic at 1.

Profit is maximized where marginal revenue equals marginal cost (MR = MC); a price-setting firm sets price above marginal cost by the markup implied by elasticity.

Lerner index = (P − MC) ÷ P = 1 ÷ |E|; it measures market power.

In the short run, a competitive firm shuts down when price falls below minimum average variable cost; in the long run, exit occurs when price is below minimum average total cost.

Economies of scale reduce long-run average cost as output rises; diseconomies of scale increase it beyond the minimum efficient scale.

Opportunity cost is the value of the next-best forgone alternative; economic profit = total revenue − explicit costs − implicit costs.

A monopoly maximizes profit at MR = MC and sets price on the demand curve; deadweight loss arises because output is below the allocatively efficient level.

Giffen and Veblen goods are exceptions to the law of demand: quantity demanded rises with price due to income effects (Giffen) or status signaling (Veblen).

A valid contract requires offer, acceptance, consideration, capacity, and legality; a counteroffer operates as a rejection of the original offer.

The Statute of Frauds requires certain contracts (e.g., sale of goods over a threshold, land transfers, contracts not performable within one year) to be evidenced in writing.

Agency relationship: the principal grants authority to the agent; apparent authority binds the principal when a third party reasonably relies on the principal's manifestations.

Corporate veil piercing applies where the corporation is used as an alter ego or to commit fraud; limited liability is otherwise the default.

Negligence elements: duty of care, breach of duty, causation (actual and proximate), and damages; comparative negligence reduces recovery by plaintiff fault.

Intellectual property: patents protect novel inventions for a limited term; copyright protects original expression; trademarks protect source identifiers; trade secrets protect confidential information.

Kohlberg's stages of moral development: preconventional (self-interest), conventional (social norms and law), and postconventional (universal ethical principles).

Utilitarian ethics evaluates actions by aggregate consequences; deontological ethics evaluates actions by duties and rules irrespective of outcomes.

Data hierarchy: bit, byte/character, field, record, file, and database; a relational database stores data in tables with rows (records) and columns (attributes).

ACID properties of transactions: atomicity, consistency, isolation, and durability.

Primary key uniquely identifies each row; a foreign key references a primary key in another table and enforces referential integrity.

Normalization reduces data redundancy and update anomalies; first normal form eliminates repeating groups, second removes partial dependencies, third removes transitive dependencies.

Types of analytics: descriptive (what happened), diagnostic (why), predictive (what will happen), and prescriptive (what should be done).

Confusion matrix metrics: precision = TP ÷ (TP + FP); recall = TP ÷ (TP + FN); accuracy = (TP + TN) ÷ total observations.

Moore's Law observes that transistor density on integrated circuits roughly doubles at regular intervals; Metcalfe's Law states network value scales with the square of connected users.

CIA triad for information security: confidentiality, integrity, and availability; authentication verifies identity while authorization determines permitted actions.

The entrepreneurial process: opportunity identification, business plan development, resource acquisition, launch, and growth management.

Break-even point in units = fixed costs ÷ (price per unit − variable cost per unit); a lower break-even volume reduces startup risk.

Rogers' diffusion of innovations adopter categories: innovators, early adopters, early majority, late majority, and laggards; the chasm separates early adopters from the early majority.

Disruptive innovation (Christensen) begins in low-end or overlooked segments and improves until it displaces incumbents; sustaining innovation improves existing products for current customers.

Sources of startup funding in sequence: bootstrapping, angel investors, venture capital, and public markets; each stage trades equity dilution for capital and validation.

Lean startup cycle: build, measure, learn; the minimum viable product tests a hypothesis with the least effort that yields validated learning.

TAM, SAM, and SOM estimate total addressable market, serviceable available market, and serviceable obtainable market, narrowing to realistically capturable demand.

A business model canvas captures nine blocks including value propositions, customer segments, channels, revenue streams, and cost structure.