Aragón PAU Business and Business Model Design key terms

The set of external factors that affect how firms obtain resources, sell output and set prices, including market structure, demand conditions, technology, and the general state of the economy.

The organisation of a market according to the number of buyers and sellers, product differentiation, and ease of entry, ranging from perfect competition through monopolistic competition and oligopoly to monopoly.

Obstacles that make it difficult or costly for new competitors to enter a market, such as capital requirements, legal licences, patents, economies of scale, or strong brand loyalty.

The recurring pattern of expansion and contraction in aggregate economic activity, usually described through phases of recovery, boom, recession and depression, which shapes demand for a firm's products.

A measure of how strongly the quantity demanded of a good responds to a change in its price or in consumer income; elastic demand is highly responsive, inelastic demand is not.

Costs or benefits of a firm's activity that fall on third parties not involved in the transaction, such as pollution or worker training, and which markets do not automatically price.

The plan a firm follows to achieve advantage over rivals in its chosen markets, typically by pursuing lower costs, differentiation, or focus on a narrow segment.

A distinctive bundle of skills and technologies that a firm performs better than competitors and that underpins several of its products, being difficult for rivals to imitate.

The sequence of primary and support activities through which a firm transforms inputs into a product or service and delivers it to customers, each activity potentially adding value.

A structured diagnosis that lists a firm's internal strengths and weaknesses alongside external opportunities and threats, used to inform strategic choices.

Contracting an activity previously performed internally to an external supplier, usually to reduce cost, gain specialist capability, or free resources for core activities.

The combination of product, price, place and promotion decisions a firm uses to position its offer in a target market and to meet customer needs profitably.

Dividing a heterogeneous market into groups of buyers with similar needs or characteristics, so that offers and marketing can be tailored to each group.

The specific group of customers a firm chooses to serve with a given product or brand, selected after segmentation and evaluation of segment attractiveness.

The method a firm uses to set prices, such as cost-plus, penetration, skimming, or value-based pricing, balancing demand, competition and profit objectives.

A one-page visual template that describes a business through nine building blocks, including customer segments, value propositions, channels, key resources, and cost and revenue structures.

The clear statement of the specific benefit a product or service delivers to a defined customer segment, and why that offer is preferable to available alternatives.

A group of people or organisations that a business aims to reach and serve because they share needs, behaviours or attributes relevant to the value offered.

The mechanism by which a business converts the value it delivers into income, for example direct sales, subscription fees, licensing, advertising, or commission on transactions.

The description of all costs incurred in operating a business model, distinguishing fixed from variable costs and identifying the activities and resources that drive them.

A deliberate redesign of how a firm creates, delivers and captures value, changing elements such as customer segments, revenue mechanisms or key partnerships rather than only products.

An innovation that initially serves a small or overlooked segment with a simpler, cheaper offer and then improves until it displaces established competitors in the mainstream market.

An approach to building new ventures that tests assumptions through a minimum viable product and iterative build-measure-learn cycles, aiming to validate the model before scaling.

The smallest version of a product that allows a team to test core assumptions with real users and gather learning, before committing resources to full development.

The capacity of a business model to grow revenue substantially without a proportional increase in costs, often achieved through digital delivery or network effects.

A situation where the value of a product to each user increases as the number of other users grows, creating a self-reinforcing advantage for the leading platform.

A financial statement listing a firm's assets, liabilities and equity at a specific date, showing what it owns, what it owes, and the owners' residual interest.

A financial statement summarising revenues, expenses and the resulting profit or loss over an accounting period, also called the profit and loss account.

The difference between current assets and current liabilities, representing the funds tied up in day-to-day operations such as inventory and receivables.

The actual movement of money into and out of a business over a period; positive cash flow is essential for meeting payments even when accounting profit exists.

The sales volume or revenue level at which total revenue exactly equals total cost, so the firm makes neither profit nor loss.

The difference between a product's selling price and its variable cost per unit, showing how much each sale contributes towards covering fixed costs and generating profit.

A profitability ratio comparing the gain from an investment with its cost, usually expressed as a percentage and used to judge whether resources are being used effectively.

Calculated relationships between figures in the financial statements, such as liquidity, solvency and profitability ratios, used to analyse performance and compare firms.

The length of time needed for the cash inflows from a project to recover the initial investment, used as a simple measure of risk and liquidity.

The legal structure chosen for a business, such as sole trader, partnership, or limited company, which determines liability, taxation and governance obligations.

A legal principle under which owners of a company are liable for its debts only up to the amount of capital they have subscribed, protecting personal assets.

The formal process of entering a company in the official commercial register, requiring articles of association and public disclosure of key details such as capital and directors.

The body of laws, rules and supervisory authorities that constrain business conduct in areas such as competition, consumer protection, employment, and data protection.

Legislation prohibiting anti-competitive agreements, abuse of dominant position and mergers that substantially lessen competition, enforced by national and EU authorities.