Canary Islands PAU Business & Business Model Design (ULPGC / ULL) flashcards

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

Stakeholder vs shareholder model

The shareholder model holds that the firm exists to maximise owner profit within legal and ethical limits. The stakeholder model holds that it is accountable to all affected groups: workers, customers, suppliers, community and owners.

PESTEL analysis

A scanning framework that classifies external macro-environment factors as Political, Economic, Socio-cultural, Technological, Environmental and Legal. It identifies opportunities and threats outside the firm's control but does not by itself set strategy.

Porter's Five Forces

An industry attractiveness model based on rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of suppliers and bargaining power of buyers. Strong forces compress industry profitability.

Value chain

Porter's breakdown of the firm into primary activities (logistics, operations, marketing, service) and support activities (infrastructure, HR, technology, procurement). Competitive advantage arises where activities create distinctive value for buyers.

Business model definition

The logic by which an organisation creates, delivers and captures value. It explains who the customers are, what is offered, how it is produced and delivered, and how revenue and costs arise.

Business Model Canvas blocks

Nine blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners and cost structure. Market-facing blocks sit on the right, efficiency blocks on the left.

Value proposition

The bundle of benefits an offer delivers to a specific segment, stating the problem solved or need met, the differential advantage over alternatives, and why that customer would pay for it.

Cost-driven vs value-driven model

Cost-driven models minimise costs through automation, low prices and outsourcing. Value-driven models emphasise premium value, customisation and service. The choice shapes the whole cost structure block of the canvas.

Porter's generic strategies

Cost leadership, differentiation and focus (cost focus or differentiation focus). A firm without a clear advantage is 'stuck in the middle' and typically earns below-average returns in its industry.

Ansoff growth matrix

Four growth directions from combining existing or new products with existing or new markets: market penetration, product development, market development and diversification. Risk rises as the firm moves away from its current position.

Internationalisation entry modes

Modes ranked by commitment and control: exporting, licensing and franchising, joint ventures, and wholly owned subsidiaries. Higher commitment offers more control but greater risk and capital needs.

BCG matrix

A portfolio tool classifying business units as stars (high growth, high share), cash cows (low growth, high share), question marks (high growth, low share) and dogs (low growth, low share) to guide investment.

Segmentation criteria

A useful segment must be measurable, accessible, substantial, differentiable and actionable. Bases of segmentation are geographic, demographic, psychographic and behavioural. Targeting then chooses mass, differentiated, niche or micro approaches.

Marketing mix 4Ps

Product decisions (quality, features, brand, lifecycle), price decisions (cost-plus, value-based, skimming, penetration), place decisions (channels, coverage, logistics) and promotion decisions (advertising, sales promotion, PR, personal selling, direct marketing).

Product life cycle

Four stages - introduction, growth, maturity and decline - each requiring different marketing emphasis. Introduction builds awareness, growth builds share, maturity defends and differentiates, decline harvests or divests.

Digital marketing metrics

Key indicators include click-through rate, conversion rate, cost per acquisition, customer acquisition cost, customer lifetime value and return on investment. Inbound marketing attracts users with content; outbound pushes messages to them.

Break-even point formula

In units: fixed costs divided by unit price minus unit variable cost. In money: fixed costs divided by the contribution margin ratio. It is the sales volume at which total revenue equals total cost.

Labour productivity

Output divided by input, for example units produced per labour hour. It improves through technology, training, better organisation or more capital per worker. Total factor productivity uses all inputs together.

Operating leverage

The sensitivity of profit to changes in sales, driven by the proportion of fixed costs. High fixed costs mean high leverage: larger gains when sales rise and larger losses when they fall.

Cost of quality categories

Prevention costs (training, design), appraisal costs (inspection, testing), internal failure costs (scrap, rework) and external failure costs (warranty, recalls, lost reputation). Prevention is the cheapest category.

Net Present Value

The sum of discounted future cash flows minus the initial investment, using the project's cost of capital. Accept projects with positive NPV; among mutually exclusive projects, choose the highest NPV.

Internal Rate of Return

The discount rate at which a project's NPV equals zero. Accept if it exceeds the cost of capital. With non-conventional cash flows it can produce multiple or misleading values, so NPV is preferred.

Payback period

The time needed to recover the initial investment from cash flows. It is simple and measures liquidity risk but ignores the time value of money and all cash flows occurring after the payback date.

Balance sheet identity

Assets equal liabilities plus equity. Assets and liabilities are split into non-current and current; equity comprises share capital, reserves and retained profit. The statement is a snapshot at a given date.

WACC

Weighted average cost of capital: the cost of debt after tax and the cost of equity, weighted by their market proportions. It is the minimum return a project must earn to create value.

Herzberg's two-factor theory

Hygiene factors such as salary, working conditions and company policy prevent dissatisfaction but do not motivate. Motivators such as achievement, recognition, responsibility and growth generate genuine satisfaction and effort.

Vroom's expectancy theory

Motivation equals expectancy multiplied by instrumentality multiplied by valence. If any one factor is zero, motivation is zero. Managers must link effort to performance and performance to valued rewards.

Transformational leadership

A leadership style based on vision, intellectual stimulation, individual consideration and inspirational motivation. It contrasts with transactional leadership, which relies on reward and punishment exchanges and monitoring.

Matrix organisational structure

A structure in which employees report to both a functional manager and a project or product manager. It improves coordination and flexibility but creates dual authority, conflict and accountability ambiguity.

Sociedad limitada (SL)

The most common Spanish company form for small firms: limited liability, minimum capital of 3,000 euros, fully subscribed and at least 25 percent paid up at incorporation, with transfer restrictions on shares.

Business plan core sections

Executive summary, promoter team, product or service, market analysis, marketing plan, operations plan, organisation and HR, legal form, financial plan and risk analysis. The financial plan includes cash budget and break-even.

Minimum viable product

The smallest version of an offer that lets a team test key assumptions with real customers and learn before scaling. It belongs to the lean start-up build–measure–learn cycle and informs pivot decisions.