PAU Business & Business Model Design (Cantabria) common mistakes
PAU Business & Business Model Design (Cantabria) · Understand the traps and how to avoid them.
Defining a legal form by listing its features in isolation (e.g. 'a public limited company has shares') without linking those features to the consequences the question asks about: liability, taxation, capital-raising capacity or continuity of existence. Candidates describe the form instead of evaluating it against the scenario.
Textbook definitions are memorised as feature lists, and under time pressure the candidate reproduces the list rather than re-reading the scenario's constraint (a sole trader wanting to raise capital without losing control, for example). The habit is reinforced because feature lists feel like 'content covered'.
What to do instead
For every legal form, memorise a four-column table: liability, capital sources, taxation, control/continuity. When answering, first underline the constraint in the scenario, then select the two or three columns that answer it and discard the rest. Practise by writing one-sentence verdicts ('an SA fits because unlimited capital-raising outweighs loss of control for a firm this size') rather than descriptions.
Treating stakeholders as a single undifferentiated group and asserting that 'stakeholders want the firm to be profitable', instead of distinguishing conflicting objectives (shareholders vs employees vs creditors vs local community) and identifying the trade-off the firm must manage.
Stakeholder theory is often reduced to a list of names. Candidates do not practise mapping interests onto a specific decision, so they default to the assumption that all parties want the same outcome.
What to do instead
Build a two-column stakeholder map for each decision you study (e.g. relocating production, paying a dividend, investing in a costly environmental upgrade): interest and likely reaction. In answers, name at least two stakeholders with opposed interests and state explicitly which objective the firm is prioritising and why. Use the phrase 'trade-off' to force the comparison.
Filling the Business Model Canvas as nine labelled boxes with generic entries ('value: good quality', 'customers: everyone'), without showing the causal link from value proposition to revenue stream and cost structure. The candidate produces a completed template but no model of how value is created and captured.
The canvas is taught as a template to complete rather than a logic to test. Candidates confuse coverage of all nine blocks with quality of the argument, and generic entries are easier to write than specific ones.
What to do instead
For each block write a testable claim with a number or a named segment ('value: next-day delivery for independent pharmacies within 50 km'; 'revenue: monthly subscription per pharmacy, not per order'). Then add two arrows in prose: how the value proposition generates willingness to pay, and how the cost structure is driven by the key activities. If you cannot draw the arrow, the block is not yet specific enough.
Confusing a business model change with a product or technology change, and answering an innovation question by describing a new feature or a new app rather than a change in how value is created, delivered and captured (revenue model, cost model, or who the customer is).
Everyday usage of 'innovation' means new products. Candidates import that meaning into the exam and never check whether the revenue or cost logic has actually changed.
What to do instead
Before writing, apply a three-part test: has the customer segment, the revenue mechanism, or the cost/delivery mechanism changed? If none has, it is product innovation, not business model innovation, and say so. Practise classifying well-known cases into 'product only' versus 'model change' and justify each classification in two sentences.
Describing the steps of a production process or the elements of a quality system (e.g. listing TQM principles) without calculating or interpreting the operational consequence: capacity, break-even output, stock levels, defect rates or lead time.
Operations content is perceived as descriptive and is revised by reading rather than by doing. Candidates avoid the arithmetic because it is perceived as a different skill from essay writing.
What to do instead
Revise operations through small numerical drills: break-even output, capacity utilisation, reorder level with safety stock, and defect rate from a sample. For every qualitative point, attach the operational variable it moves ('reducing setup time lowers the economic batch size, which lowers average stock'). In essays, include at least one figure or ratio derived from the case data.
Applying the marketing mix as four independent lists (product features, price options, place options, promotion options) without aligning them to one chosen segment and one positioning, so the answer contains internal contradictions such as a premium price with a discount-channel distribution and mass-market promotion.
The four Ps are taught as headings, so candidates treat them as separate questions to answer rather than a consistent set of decisions derived from a segmentation choice.
What to do instead
Always begin with one sentence naming the target segment and the positioning, then make each P justify that sentence. Before finishing, run a consistency check: does the price signal the same quality as the product, does the channel reach that segment, does the promotion message match the positioning? Explicitly name and correct any tension you notice.
Analysing digital marketing by listing channels (social media, email, SEO) without linking them to the customer decision journey, measurable objectives or metrics (conversion rate, CAC, retention, engagement), and without acknowledging limitations such as attribution difficulty.
Channel names are easy to recall and feel current. Candidates lack practice in connecting a channel choice to a funnel stage and a metric, so the answer stays at the level of naming tools.
What to do instead
For each channel you mention, state the funnel stage it serves, the metric that would judge success, and one risk. Memorise a short metric set (reach, click-through rate, conversion rate, customer acquisition cost, retention/churn) and use at least two in any digital question. Add one sentence on attribution or privacy limits to show critical judgement.
Computing a ratio correctly and then stopping, without interpreting what the value means relative to a benchmark (prior year, competitor, sector norm) or stating the decision it implies. Conversely, memorising ratio formulae but inverting them under exam pressure (e.g. writing current assets over current liabilities for the debt ratio).
Ratio questions are treated as arithmetic exercises, and the interpretation step is skipped because it requires a comparison the candidate has not prepared. Formula confusion arises from learning formulas as strings rather than as questions ('can this firm pay next year's bills?').
What to do instead
Write every formula as a question first ('can short-term assets cover short-term liabilities?') and then as the fraction. In answers, use a fixed three-sentence structure: value, comparison to a benchmark, consequence for a decision (lending, investing, cost control). Drill five ratios until the question-to-formula link is automatic.
Presenting an investment appraisal as a single net present value or payback figure and declaring 'accept', ignoring the assumptions behind the discount rate and cash-flow forecasts, the treatment of risk, and non-financial factors. Candidates also mix nominal cash flows with a real discount rate or forget initial outlay timing.
Appraisal is revised as a formula to apply, and the qualitative critique feels like an optional add-on. Time pressure pushes candidates to stop at the number.
What to do instead
Adopt a checklist for every appraisal answer: are cash flows incremental and after tax, is the discount rate consistent with the cash flows (nominal with nominal), what is the sensitivity of the decision to a change in a key variable, and what strategic or qualitative factors could override the number? Include at least one sensitivity statement ('a 10% fall in year-one revenue would make NPV negative') before concluding.
Answering motivation and leadership questions by naming a theory (Maslow, Herzberg, McGregor) and describing its levels, without applying it to the specific people, tasks and context in the question, and without recognising that different theories predict different managerial actions.
Theories are memorised as diagrams and the application step is skipped. Candidates also conflate theories, for example treating Herzberg's hygiene factors as motivators, because the labels are learned without the underlying distinction.
What to do instead
For each theory, memorise one concrete managerial action it implies (job enrichment for Herzberg motivators, autonomy and voice for participative leadership). In answers, quote the case detail that triggers the theory, state the action, and predict the behavioural effect. Add one sentence on the theory's limitation in that context (e.g. cultural assumptions, sample bias) to demonstrate evaluation.