Aragón PAU Business and Business Model Design flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Value added

Sales revenue minus the cost of intermediate goods and services purchased from outside suppliers. It measures the wealth the company itself generates and is the basis for aggregating GDP.

Opportunity cost

The value of the best alternative forgone when a resource is devoted to one use. It is an economic concept, never recorded in accounting, and central to rational decision-making.

Sociedad Anónima capital

A Spanish public limited company needs a minimum share capital of 60,000 euros, of which at least 25 percent must be paid up at incorporation. Shares are freely transferable by default.

Sociedad Limitada

A Spanish private limited company with minimum capital of 3,000 euros fully paid at incorporation. Ownership interests are generally restricted in transfer and it suits small and medium firms.

Business cycle phases

Expansion, peak, recession and trough. Cyclical sectors such as construction and consumer durables amplify the swings, while defensive sectors like food and utilities dampen them.

Stakeholder groups

Shareholders hold the residual claim on profit; employees, customers, suppliers, creditors, public administrations and the local community hold other legitimate interests that may conflict with it.

Porter five forces

Rivalry among competitors, threat of new entrants, threat of substitutes, bargaining power of buyers and of suppliers. Together they determine the structural attractiveness and average profitability of an industry.

Generic strategies

Cost leadership, differentiation and focus. A firm that pursues none clearly, or tries to combine conflicting ones, ends up stuck in the middle with below-average returns.

Ansoff matrix

A growth grid crossing products and markets: market penetration, product development, market development and diversification. Diversification carries the highest risk because both dimensions are new.

BCG matrix

Classifies business units by market growth and relative market share: stars, cash cows, question marks and dogs. Cash cows fund stars and selected question marks; dogs are divestment candidates.

Break-even point

The sales volume at which total revenue equals total cost, computed as fixed costs divided by unit price minus unit variable cost. Below it the firm incurs operating losses.

SWOT analysis

Strengths and weaknesses are internal and controllable; opportunities and threats are external and uncontrollable. The analysis pairs them to derive strategies that exploit or defend.

Marketing mix

The four Ps: product, price, place and promotion. Pricing approaches include skimming, penetration, cost-plus and psychological pricing, chosen according to product life cycle stage.

Business Model Canvas

Nine blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure. It maps creation, delivery and capture of value.

Revenue model types

Ways of capturing value: outright sale, subscription, freemium, pay-per-use, licensing, advertising, brokerage commission and leasing. Each implies a different cash-flow rhythm and risk profile.

Value proposition

A statement of the customer's job-to-be-done, the specific pains relieved and the gains created. It must be framed in customer terms, not in technical product features.

Disruptive innovation

An entrant offers a simpler, cheaper product at the low end or in a new market, then moves upmarket as incumbents overshoot customer needs. Incumbents often rationally ignore it.

Minimum viable product

The smallest offering that lets a team test its riskiest assumption with real users. It belongs to the build-measure-learn cycle of the lean startup method.

Network effects

The value of a platform to each user rises with the number of users, especially on the other side of the market. Cross-side effects are the core engine of platform business models.

Open innovation

Ideas and knowledge flow across firm boundaries: inwards from users, suppliers and universities, outwards through licensing and spin-offs. It contrasts with closed, internal-only R&D.

Balance sheet identity

Assets equal liabilities plus equity. Current items mature within one year; non-current items exceed it. The statement is a snapshot at a given date, not a flow.

Working capital

Current assets minus current liabilities. A positive figure provides a liquidity buffer; a persistent negative one signals financing tension unless the business collects cash before paying.

Current ratio

Current assets divided by current liabilities. It measures short-term liquidity; a value below one means current obligations exceed the assets expected to cover them within a year.

ROE

Return on equity: net profit divided by shareholders' equity. It measures the return earned on owners' funds and rises mechanically with leverage, so it must be read together with debt.

ROA

Return on assets: net profit divided by total assets. It shows how efficiently all invested capital, regardless of financing source, produces profit, allowing comparison across capital structures.

Contribution margin

Revenue minus variable costs. It is what remains to cover fixed costs and generate profit; the break-even point is fixed costs divided by the unit contribution margin.

Net present value

Sum of future cash flows discounted at rate k, minus the initial investment. Accept a project when NPV is positive; it is the preferred criterion because it adds value in money terms.

Payback period

Years needed for cumulative cash flows to recover the initial outlay. It is simple but ignores all flows after the cut-off and the time value of money.

Registro Mercantil

The Spanish companies registry. A company acquires full legal personality when its incorporation deed, signed before a notary, is registered there.

Shareholders' general meeting

The sovereign company body: it approves annual accounts, appoints and dismisses directors, amends the bylaws and decides on capital changes. It meets at least once a year.

Insolvency filing duty

Under Spanish law a debtor must apply for concurso de acreedores within two months of knowing it is insolvent. Directors who fail may become personally liable for the shortfall.

Right of withdrawal

In distance and off-premises consumer contracts the buyer may cancel within 14 calendar days without giving a reason, and goods carry a mandatory two-year legal guarantee.