Andalusia PAU Business and Business Model Design flashcards
Andalusia PAU Business and Business Model Design · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Business model
- The logic by which a firm creates, delivers and captures value, described through customer segments, value proposition, channels, relationships, revenue streams, resources, activities, partners and costs.
- Value proposition
- A clear statement of the problem solved or benefit delivered to a specific customer segment and why the offer is preferable to existing alternatives.
- Customer segment
- A group of buyers sharing similar needs, behaviours and willingness to pay, targeted with a tailored value proposition and channel mix.
- Revenue stream
- The mechanism through which a firm captures value from a segment, such as asset sale, subscription, usage fee, licensing, brokerage commission or advertising.
- Lean Canvas
- A one-page model for start-ups with problem, solution, key metrics and unfair advantage replacing key partners, activities, resources and relationships in the original canvas.
- Value Proposition Canvas
- A tool pairing a customer profile of jobs, pains and gains with a value map of products, pain relievers and gain creators to test fit.
- Customer lifetime value
- The present value of net contribution a customer generates over the whole relationship; it should substantially exceed the cost of acquiring that customer.
- Minimum viable product
- The smallest version of an offer that lets a team test key assumptions with real users and collect evidence for pivoting or persevering.
- Build-measure-learn loop
- The lean start-up cycle in which assumptions are turned into a product, behaviour is measured, and the model is adjusted from the resulting evidence.
- Pivot
- A structured change to one core element of a business model, such as segment or channel, based on validated learning while retaining the rest.
- Creative destruction
- Schumpeter's idea that new combinations introduced by entrepreneurs displace established firms, products and methods, renewing the economy.
- Net present value
- The sum of discounted future cash flows minus the initial outlay; a positive NPV means the project adds value at the required rate of return.
- Internal rate of return
- The discount rate that makes a project's net present value zero; accepted when it exceeds the required rate of return.
- Payback period
- The time needed for cumulative cash inflows to recover the initial investment; simple to compute but ignores flows after recovery and the time value of money.
- Weighted average cost of capital
- The average cost of equity and after-tax debt weighted by their market shares in total financing; used as the discount rate for average-risk projects.
- Financial leverage
- The use of borrowed funds; it raises return on equity when return on assets exceeds the cost of debt and increases financial risk in all cases.
- Break-even point
- The sales volume at which total revenue equals total cost, computed as fixed costs divided by contribution margin per unit; profit is zero there.
- Current ratio
- Current assets divided by current liabilities; it measures short-term liquidity and the ability to meet obligations falling due within one year.
- Return on equity
- Net profit divided by shareholders' equity; it shows the return generated on owners' funds and is sensitive to leverage.
- Debt ratio
- Total liabilities divided by total assets; it indicates the share of assets financed by debt and therefore long-term solvency risk.
- Vertical analysis
- A technique expressing each line of a financial statement as a percentage of a base item, such as total assets or net sales, to compare structure.
- Working capital
- Current assets minus current liabilities; a positive figure indicates the firm can fund day-to-day operations from short-term resources.
- Span of control
- The number of subordinates directly reporting to one manager; it determines how many hierarchical levels an organisation needs.
- Mechanistic structure
- A highly formalised, centralised organisation with narrow spans and standard rules, suited to stable environments and routine work.
- Organic structure
- A flexible, decentralised, low-formalisation organisation with wide spans and lateral communication, suited to uncertain and changing environments.
- Expectancy theory
- Vroom's model in which motivation equals expectancy times instrumentality times valence; effort is exerted when effort leads to valued outcomes.
- Stakeholder
- Any individual or group affected by or able to affect the firm's decisions, including owners, employees, customers, suppliers, creditors, government and community.
- Corporate social responsibility
- The voluntary integration of social, environmental and ethical concerns into strategy and operations, beyond what the law requires.
- Five forces
- Porter's framework assessing industry attractiveness through rivalry, new entrants, substitutes, buyer power and supplier power.
- Generic strategies
- Porter's three routes to competitive advantage: cost leadership, differentiation and focus on a narrow segment; failing to choose one leaves a firm stuck in the middle.
- Ansoff matrix
- A growth framework crossing existing and new products with existing and new markets, yielding penetration, product development, market development and diversification.
- Triple bottom line
- A performance framework measuring economic profit, social people outcomes and environmental planet impact as three interdependent dimensions of sustainability.