OBM flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Five Forces framework
- Porter's model assessing industry attractiveness through new entrants, buyer power, supplier power, substitutes, and rivalry; intense forces generally compress profitability.
- VRIO framework
- A resource yields sustained competitive advantage only when it is valuable, rare, difficult to imitate, and supported by the organization's structure and processes.
- Ansoff growth matrix
- A two-by-two grid of products (existing or new) against markets (existing or new), producing penetration, product development, market development, and diversification strategies.
- Generic strategies
- Porter's three strategic positions: overall cost leadership, differentiation, and focus; firms failing to achieve one are described as stuck in the middle.
- Expectancy theory
- Vroom's model stating motivation equals expectancy multiplied by instrumentality multiplied by valence; a zero on any factor eliminates motivation.
- Herzberg two-factor theory
- Hygiene factors such as pay and conditions prevent dissatisfaction, while motivators such as achievement and recognition create genuine satisfaction and motivation.
- Tuckman stages
- The five stages of group development: forming, storming, norming, performing, and adjourning, with conflict typically peaking during storming.
- Equity theory
- Adams' proposition that employees compare outcome-to-input ratios with referents and act to restore equity when they perceive unfairness.
- Product life cycle
- Four stages of a product's market life: introduction, growth, maturity, and decline, each requiring different pricing, promotion, and distribution emphasis.
- Price elasticity of demand
- The percentage change in quantity demanded divided by the percentage change in price; demand is elastic when the absolute value exceeds one.
- STP process
- Segmentation, targeting, and positioning: dividing a market, choosing attractive segments, and crafting a distinct position in customers' minds.
- Customer lifetime value
- The present value of expected future contribution from a customer relationship, net of acquisition costs, used to justify marketing spending.
- Accounting equation
- Assets equal liabilities plus owners' equity; every recorded transaction must keep this identity in balance across the financial statements.
- Net present value
- The present value of a project's expected cash inflows minus its initial investment; positive NPV projects add value at the given discount rate.
- WACC
- The weighted average cost of capital, blending after-tax cost of debt and cost of equity by their proportions in the firm's capital structure.
- DuPont identity
- Return on equity decomposed into net profit margin, total asset turnover, and equity multiplier, revealing whether profitability, efficiency, or leverage drives returns.
- Economic order quantity
- The order size minimizing the sum of ordering and holding costs, computed as the square root of twice annual demand times order cost divided by holding cost.
- Little's Law
- Average inventory equals average throughput rate multiplied by average flow time; it applies to any stable process or supply chain.
- Bullwhip effect
- Amplification of demand variability moving upstream in a supply chain, caused by forecast updating, order batching, price promotions, and rationing.
- Lean seven wastes
- Overproduction, waiting, transport, overprocessing, inventory, motion, and defects; lean thinking targets these to create customer-valued flow.
- MR equals MC rule
- Profit is maximized at the output where marginal revenue equals marginal cost; expanding output beyond that point reduces total profit.
- Lerner index
- Price minus marginal cost divided by price, equal to the reciprocal of the absolute price elasticity of demand; higher values indicate greater market power.
- Economic profit
- Total revenue minus explicit costs minus implicit costs, including opportunity costs of resources the owner supplies; it differs from accounting profit.
- Shutdown point
- In the short run a competitive firm halts production when price falls below minimum average variable cost, since revenue fails to cover variable costs.
- Statute of Frauds
- A legal rule requiring written evidence for certain contracts, including land sales and agreements not performable within one year.
- Contract elements
- A valid contract requires offer, acceptance, consideration, capacity of the parties, and legality of purpose; missing any element undermines enforceability.
- Negligence elements
- A plaintiff must prove duty of care, breach of that duty, actual and proximate causation, and resulting damages to recover for negligence.
- ACID properties
- Database transaction guarantees: atomicity, consistency, isolation, and durability, ensuring reliable processing despite failures or concurrent access.
- Analytics types
- Four progressive categories: descriptive reporting of past data, diagnostic explanation, predictive forecasting, and prescriptive recommendation of optimal actions.
- Precision and recall
- Precision is true positives divided by predicted positives; recall is true positives divided by actual positives; they trade off in classification models.
- Diffusion of innovations
- Rogers' model describing adoption over time across innovators, early adopters, early majority, late majority, and laggards, with a chasm after early adopters.
- Lean startup cycle
- Iterative build, measure, learn loop in which a minimum viable product tests business hypotheses and validated learning guides the next iteration.