PAU Business & Business Model Design (Cantabria) key terms

The specific bundle of benefits a firm promises to deliver to a customer segment, explaining why that customer should choose it over alternatives and what problem it solves.

A one-page visual framework that maps nine building blocks of a business, including customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure.

The way a company converts the value it delivers into money, such as one-off sales, subscriptions, licensing fees, commissions or advertising income, each with its own pricing mechanism.

The mix and relative weight of fixed and variable costs a business incurs to operate its model, determining how margins respond to changes in sales volume.

An alliance with suppliers, distributors, competitors or other parties that lets a firm access resources, capabilities or markets it could not economically provide alone.

A distinct group of buyers with similar needs, behaviours or willingness to pay, which a firm targets with a tailored value proposition and commercial approach.

Dividing a broad market into smaller groups of buyers sharing characteristics or needs, so that offers and marketing can be adapted to each group effectively.

The specific segment or segments a firm decides to serve with its marketing effort, chosen after assessing segment size, growth, competition and fit with its capabilities.

The place a brand occupies in the minds of target customers relative to competitors, built through consistent choices about price, quality, image and communication.

The coordinated set of controllable tools a firm uses to pursue its marketing objectives, traditionally grouped as product, price, place and promotion, with people, process and physical evidence added for services.

Promotion and customer relationship activity carried out through online channels such as search engines, social media, email and websites, allowing fine targeting and measurable response.

The sales volume or revenue level at which total income exactly covers total costs, so the business makes neither profit nor loss, calculated from fixed costs and unit contribution.

The amount each unit sold leaves after variable costs to cover fixed costs and generate profit, usually expressed per unit or as a percentage of selling price.

Revenue minus the direct cost of goods sold, divided by revenue, showing the percentage left to cover operating expenses and profit before overheads are deducted.

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

A financial statement covering a period that reports revenues, expenses and the resulting profit or loss, distinguishing operating results from financing and tax items.

A statement classifying cash movements over a period into operating, investing and financing activities, explaining why the cash balance changed independently of reported profit.

A measure of a firm's ability to meet short-term obligations, such as the current ratio of current assets to current liabilities or the stricter acid-test ratio.

A firm's capacity to meet its long-term debts and survive financial stress, often assessed through gearing and interest cover rather than short-term liquidity measures.

The proportion of a firm's capital financed by debt rather than equity, indicating financial risk because interest and repayment obligations are fixed regardless of performance.

The difference between current assets and current liabilities, representing the funds tied up in stock, receivables and cash needed to run day-to-day operations.

The range of internal and external funds available to a business, including retained profit, bank loans, equity investment, leasing, trade credit and government grants, each with different cost and control implications.

The minimum return a firm must earn on its investments to satisfy lenders and shareholders, blending the interest rate on debt with the return expected by equity investors.

The time taken for cumulative cash inflows from an investment to equal the initial outlay, used as a simple screening measure of risk and liquidity recovery.

The sum of an investment's future cash flows discounted to today's value at the required rate of return, minus the initial cost; a positive figure suggests the project adds value.

A performance ratio dividing the gain from an investment by its cost, expressed as a percentage and used to compare the profitability of alternative uses of funds.

A business owned and run by one person with no legal separation from the owner, who keeps all profits but bears unlimited personal liability for business debts.

A business formed by two or more owners who share capital, profits and decision-making under an agreed deed, generally with unlimited liability unless a limited liability form is used.

A business with separate legal personality whose owners' liability is capped at the capital they subscribed, requiring registration, published accounts and formal governance.

A legal position in which the owner's personal assets can be used to settle business debts, raising the personal risk of running the business.

A person or institution owning shares in a limited company, giving rights to dividends and voting on key decisions, and forming part of the firm's owners.

Any individual or group affected by or interested in a firm's activities, such as owners, employees, customers, suppliers, lenders, local communities and government.

A firm's voluntary commitment to act in ways that consider social, ethical and environmental effects on stakeholders, going beyond what law and regulation strictly require.

A short public declaration of a firm's purpose, values and intended scope, meant to guide decisions and communicate identity to stakeholders.

Reductions in average cost per unit achieved as output rises, arising from spreading fixed costs, bulk purchasing, specialisation and improved technology.

Increases in average cost per unit that appear when a firm grows too large, caused by coordination problems, weaker motivation and slower decision-making.

The network of organisations, activities and resources that transform raw materials into finished products delivered to customers, including sourcing, production, storage and distribution.

Contracting an activity previously done internally to an external provider, typically to cut cost, access specialist skills or focus resources on core competences.

A company-wide approach to quality that involves every employee in continuously improving processes, meeting customer requirements and reducing waste rather than inspecting defects at the end.

A capability that is difficult for rivals to imitate, valuable to customers and usable across several products or markets, forming a basis for sustained competitive advantage.

An attribute that lets a firm outperform rivals in the same market, achieved through lower costs, differentiation, superior service or a focused niche position.

A framework assessing industry attractiveness through rivalry among existing firms, threat of new entrants, threat of substitutes, bargaining power of buyers and bargaining power of suppliers.

A structured review of a firm's internal strengths and weaknesses alongside external opportunities and threats, used to inform strategy and identify priority actions.

A planning tool that classifies growth options by whether products and markets are existing or new, producing market penetration, product development, market development and diversification.

Entering new products and new markets at the same time, which spreads risk but demands new capabilities and is often pursued through acquisition or joint ventures.

A separate business created and shared by two or more partners who contribute capital, know-how and access to markets while sharing control, risk and returns.

The internal or external forces that energise, direct and sustain a person's effort at work, shaped by pay, recognition, autonomy, goals and the work environment.

The process of influencing people towards shared goals, exercised through styles such as autocratic, democratic, laissez-faire or transformational approaches depending on context.

The formal arrangement of roles, reporting lines and coordination mechanisms that determines how authority and information flow through a business.

The number of subordinates who report directly to one manager; a wide span creates flatter structures with more autonomy, while a narrow span allows closer supervision.

Operating so that economic activity meets present needs without depleting the resources or damaging the systems on which future activity depends.

A payment made from profits to shareholders, usually per share, representing a return on equity investment and a signal of financial confidence.

The extent to which a firm's cost structure is fixed rather than variable, which magnifies the effect of sales changes on operating profit.