Galicia PAU Business and Business Model Design cheat sheet

Business environment layers: general (PESTEL: political, economic, social, technological, ecological, legal) and specific (customers, suppliers, competitors, financial intermediaries).

Legal forms in Spain: empresario individual (unlimited liability), sociedad limitada (SL, minimum capital €1), sociedad anónima (SA, minimum capital €60,000, 25% paid at incorporation).

Sector classification: primary (extraction), secondary (manufacturing/construction), tertiary (services); in Galicia services exceed 60% of employment while fishing and aquaculture remain comparatively significant.

Value added = final output value − intermediate consumption; it is the correct measure of a firm's or sector's contribution, not total turnover.

Size thresholds (EU SME definition): micro <10 employees and ≤€2m turnover; small <50 and ≤€10m; medium <250 and ≤€50m.

Stakeholder map: shareholders (residual claim), employees, customers, suppliers, creditors, public administrations, local community; each holds different information and risk.

Circular flow: households supply labour and capital to firms and receive wages, rent and profit; firms supply goods and services; the public sector taxes and provides public goods.

Opportunity cost of a decision = value of the best forgone alternative; sunk costs are excluded from forward-looking decisions.

Business model = value proposition + customer segments + channels + customer relationships + revenue streams + key resources + key activities + key partners + cost structure (nine-block canvas).

Value proposition must state the customer's job, the pain relieved and the gain created; a proposition with no measurable customer benefit is not a proposition.

Revenue model options: unit sale, subscription, freemium, commission/marketplace, licensing, advertising; each implies a different cash-flow timing and margin profile.

Unit economics: contribution margin per unit = price − variable cost per unit; break-even volume = fixed costs ÷ contribution margin per unit.

LTV = average revenue per customer × gross margin × average retention period; a viable model generally needs LTV > 3 × CAC.

Scalability test: marginal cost of serving one extra customer must fall or stay flat as volume grows; otherwise growth destroys cash.

Pivot types: customer segment, value proposition, channel, revenue model; a pivot keeps validated learning and changes one core hypothesis.

Lean cycle: build → measure → learn; each iteration must test a falsifiable hypothesis with a pre-defined success metric.

Porter's five forces: rivalry, threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers; high combined force intensity compresses industry profitability.

Generic strategies: cost leadership, differentiation, focus (cost or differentiation); being 'stuck in the middle' yields below-average returns.

SWOT is diagnostic only; it must feed a TOWS-style action (SO, ST, WO, WT) to become strategic.

Resource-based view: a resource yields sustained advantage only if it is valuable, rare, inimitable and organised (VRIO).

Ansoff matrix: market penetration, product development, market development, diversification - increasing risk in that order.

Experience curve: unit cost falls by a constant percentage with each doubling of cumulative output; it is about cumulative, not current, volume.

Competitive advantage is measured by sustained above-industry-average ROIC, not by market share alone.

Concentration ratio (CR4) and HHI (sum of squared market shares) summarise industry structure; HHI above 2,500 indicates high concentration.

Organisational structures: functional (specialisation, slow cross-area response), divisional (product/market focus, duplicated resources), matrix (dual authority, conflict risk), network/holacracy (flexible, weak formal control).

Span of control: narrow spans give tall hierarchies with more management layers; wide spans flatten the structure and raise supervisory load per manager.

Maslow (physiological to self-actualisation) and Herzberg (hygiene factors prevent dissatisfaction; motivators drive satisfaction) are distinct: pay is mainly a hygiene factor.

Recruitment stages: job analysis → job description and person specification → sourcing → selection → onboarding; each stage needs defined criteria to be defensible.

Employment contract types in Spain include indefinido, temporal (obra y servicio, eventual) and formativo; the 2021 labour reform sharply restricted temporary contracts.

Collective bargaining: convenio colectivo sets sector or company minimum wages, working time and grading; it binds the firm even where individual contracts are worse.

Turnover rate = leavers ÷ average headcount × 100; absenteeism rate = days lost ÷ potential working days × 100.

Training evaluation (Kirkpatrick): reaction, learning, behaviour, results - only the last two measure business impact.

Marketing mix (4P): product (features, quality, packaging, brand), price (cost-plus, value-based, penetration, skimming), place (channels, coverage), promotion (advertising, sales promotion, PR, personal selling, digital).

Product life cycle: introduction, growth, maturity, decline; pricing and promotion tactics must change at each stage.

Market segmentation criteria must be measurable, accessible, substantial, differentiable and actionable; STP = segmentation, targeting, positioning.

Primary research (surveys, interviews, observation, experiments) is collected for the purpose; secondary research uses existing sources (INE, IGE, Eurostat, trade bodies).

Sampling: random, stratified, cluster, convenience; a larger convenience sample does not remove selection bias.

Elasticity of demand = % change in quantity ÷ % change in price; |E| > 1 elastic (price cut raises revenue), |E| < 1 inelastic (price rise raises revenue).

Market share = firm sales ÷ total market sales × 100; relative market share = firm share ÷ largest competitor's share.

AIDA (attention, interest, desire, action) and the marketing funnel describe the sequence from awareness to purchase and retention.

Process types: project, job shop, batch, mass/line, continuous flow; volume and variety trade off inversely.

Productivity = output ÷ input (labour productivity = units ÷ hours worked); it is a ratio, not a level of output.

Break-even point (units) = fixed costs ÷ (price − variable cost per unit); margin of safety = (actual sales − break-even sales) ÷ actual sales.

Economic order quantity EOQ = √(2DS/H), where D = annual demand, S = order cost, H = holding cost per unit per year.

Just-in-time reduces inventory and holding cost but increases exposure to supply disruption; it requires reliable suppliers and demand stability.

Quality costs: prevention and appraisal (cost of good quality) versus internal and external failure (cost of poor quality); failure costs usually dominate.

Deming's 14 points and PDCA (plan-do-check-act) underpin continuous improvement; statistical process control uses control limits at ±3 sigma.

Capacity utilisation = actual output ÷ maximum capacity × 100; low utilisation raises unit fixed cost.

Balance sheet identity: Assets = Liabilities + Equity; the balance sheet is a snapshot at a date, the income statement covers a period.

Working capital = current assets − current liabilities; the cash conversion cycle = days inventory + days receivable − days payable.

Liquidity: current ratio = current assets ÷ current liabilities (≈1.5–2 healthy); acid test = (current assets − inventory) ÷ current liabilities.

Solvency: debt ratio = total liabilities ÷ total assets; interest coverage = EBIT ÷ interest expense.

Profitability: ROA = net profit ÷ total assets; ROE = net profit ÷ equity; margin = net profit ÷ sales; asset turnover = sales ÷ total assets.

NPV = Σ CFt ÷ (1+k)^t − initial investment; accept if NPV > 0. IRR is the discount rate making NPV = 0; accept if IRR > cost of capital.

Payback period = time to recover the initial outlay from cumulative cash flows; it ignores cash flows after payback and the time value of money.

Financing sources: internal (retained earnings) versus external (bank debt, bonds, equity issuance, leasing); each carries different cost and control implications.

Contract elements: consent, object, cause and capacity; a contract is void without any of these and voidable where consent is vitiated (error, duress, fraud).

Company incorporation requires public deed before a notary and registration at the Registro Mercantil; legal personality begins on registration.

Insolvency (concurso de acreedores) is triggered by inability to pay debts as they fall due; directors must file within two months of insolvency.

Consumer protection: mandatory warranty of three years for goods, right of withdrawal of 14 days in distance sales, and prohibition of unfair terms.

Intellectual property: patents protect inventions (20 years), trademarks protect signs (10 years, renewable), copyright protects works (life + 70 years).

Entrepreneurship stages: idea → opportunity validation → business plan → funding → launch → growth; the business plan is a communication and control tool, not a guarantee.

CSR dimensions: economic, legal, ethical and philanthropic (Carroll); the triple bottom line reports people, planet and profit.

Sustainability reporting under the CSRD applies progressively to large and listed firms; SMEs in the value chain are affected indirectly through supply-chain data requests.

PESTEL analysis scans six macro-environmental factors: political, economic, social, technological, ecological and legal.

Spanish company forms: empresario individual (unlimited liability), sociedad limitada (minimum capital €1), sociedad anónima (minimum capital €60,000).

Primary sector extracts raw materials, secondary transforms them, tertiary provides services; Galicia has a comparatively large fishing and aquaculture base.

Value added equals output minus intermediate consumption and measures the firm's real contribution, not turnover.

EU SME thresholds: micro under 10 employees and up to €2m turnover; small under 50 and €10m; medium under 250 and €50m.

Stakeholders include shareholders, employees, customers, suppliers, creditors, public administrations and the local community.

Opportunity cost is the value of the best forgone alternative; sunk costs must be excluded from decisions.

The business model canvas has nine blocks: value proposition, customer segments, channels, customer relationships, revenue streams, key resources, key activities, key partners and cost structure.

A value proposition states the customer job, the pain relieved and the gain created; without a measurable benefit it is not a proposition.

Revenue models include unit sale, subscription, freemium, marketplace commission, licensing and advertising, each with different cash-flow timing.

Contribution margin per unit = price − variable cost per unit; break-even volume = fixed costs ÷ contribution margin per unit.

LTV = average revenue per customer × gross margin × retention period; a viable model generally needs LTV above three times CAC.

Scalability requires marginal cost per extra customer to fall or stay flat as volume grows.

Pivot types include customer segment, value proposition, channel and revenue model; a pivot keeps validated learning.

The lean cycle is build → measure → learn, and each iteration must test a falsifiable hypothesis.

Porter's five forces are rivalry, new entrants, substitutes, buyer power and supplier power; high combined intensity compresses industry profitability.

Generic strategies are cost leadership, differentiation and focus; being stuck in the middle yields below-average returns.

SWOT is diagnostic; it becomes strategic only when converted into SO, ST, WO and WT actions.

The resource-based view requires resources to be valuable, rare, inimitable and organised (VRIO) for sustained advantage.

The Ansoff matrix orders options by risk: market penetration, product development, market development, diversification.

The experience curve shows unit cost falling by a constant percentage with each doubling of cumulative output.

Sustained competitive advantage is measured by above-industry-average ROIC, not by market share alone.

HHI is the sum of squared market shares; above 2,500 indicates high concentration.

Functional structures specialise by area, divisional structures by product or market, matrix structures create dual authority, and network structures rely on flexible external links.

A narrow span of control produces a tall hierarchy with many layers; a wide span flattens the structure and raises supervisory load.

Maslow ranks needs from physiological to self-actualisation; Herzberg separates hygiene factors from motivators, with pay mainly a hygiene factor.

Recruitment runs from job analysis to job description and person specification, sourcing, selection and onboarding.

Spanish contract types include indefinido, temporal and formativo; the 2021 labour reform sharply restricted temporary contracts.

The convenio colectivo sets sector or company minimum wages, working time and grading and binds the firm.

Turnover rate = leavers ÷ average headcount × 100; absenteeism rate = days lost ÷ potential working days × 100.

Kirkpatrick's training evaluation levels are reaction, learning, behaviour and results, with only the last two measuring business impact.

The 4P mix covers product, price, place and promotion; price methods include cost-plus, value-based, penetration and skimming.

The product life cycle has introduction, growth, maturity and decline, and pricing and promotion tactics must change at each stage.

Segmentation criteria must be measurable, accessible, substantial, differentiable and actionable; STP means segmentation, targeting and positioning.

Primary research collects new data through surveys, interviews, observation or experiments; secondary research uses existing sources such as INE, IGE and Eurostat.

Sampling methods include random, stratified, cluster and convenience; a larger convenience sample does not remove selection bias.

Elasticity = % change in quantity ÷ % change in price; when |E| > 1 a price cut raises revenue, when |E| < 1 a price rise raises revenue.

Market share = firm sales ÷ total market sales × 100; relative market share = firm share ÷ largest competitor's share.

AIDA describes attention, interest, desire and action along the marketing funnel.

Process types are project, job shop, batch, mass or line, and continuous flow; volume and variety trade off inversely.

Productivity = output ÷ input, and labour productivity = units produced ÷ hours worked.

Break-even units = fixed costs ÷ (price − variable cost per unit); margin of safety = (actual sales − break-even sales) ÷ actual sales.

EOQ = √(2DS/H), where D is annual demand, S the order cost and H the holding cost per unit per year.

Just-in-time lowers inventory and holding cost but raises exposure to supply disruption.

Prevention and appraisal costs are the cost of good quality; internal and external failure costs are the cost of poor quality.

PDCA (plan-do-check-act) and Deming's points underpin continuous improvement, and SPC uses control limits at plus or minus three sigma.

Capacity utilisation = actual output ÷ maximum capacity × 100, and low utilisation raises unit fixed cost.

Assets = Liabilities + Equity; the balance sheet is a snapshot at a date while the income statement covers a period.

Working capital = current assets − current liabilities; the cash conversion cycle = days inventory + days receivable − days payable.

Current ratio = current assets ÷ current liabilities; acid test = (current assets − inventory) ÷ current liabilities.

Debt ratio = total liabilities ÷ total assets; interest coverage = EBIT ÷ interest expense.

ROA = net profit ÷ total assets; ROE = net profit ÷ equity; asset turnover = sales ÷ total assets.

NPV = Σ CFt ÷ (1+k)^t − initial investment; accept when NPV > 0, and accept IRR when it exceeds the cost of capital.

Payback period ignores cash flows after payback and the time value of money.

Financing is internal (retained earnings) or external (bank debt, bonds, equity, leasing), each with different cost and control effects.

Contract elements are consent, object, cause and capacity; a contract is void without them and voidable where consent is vitiated by error, duress or fraud.

Incorporation requires a public deed before a notary and registration at the Registro Mercantil, where legal personality begins.

Insolvency (concurso de acreedores) arises from inability to pay debts as they fall due, and directors must file within two months.

Consumer law sets a three-year warranty for goods, a 14-day withdrawal right in distance sales and prohibits unfair terms.

Patents last 20 years, trademarks 10 years and are renewable, and copyright lasts life plus 70 years.

Entrepreneurship runs from idea to opportunity validation, business plan, funding, launch and growth.

Carroll's CSR dimensions are economic, legal, ethical and philanthropic; the triple bottom line reports people, planet and profit.

The CSRD sustainability reporting rules reach SMEs indirectly through supply-chain data requests.

PESTEL covers political, economic, social, technological, ecological and legal factors in the general environment.

The specific environment comprises customers, suppliers, competitors and financial intermediaries.

Sociedad limitada requires a minimum capital of €1; sociedad anónima requires €60,000 with 25% paid at incorporation.

Value added = final output value − intermediate consumption.

EU size classes: micro under 10 employees, small under 50, medium under 250.

The circular flow links households, firms and the public sector through wages, spending and taxes.

Sunk costs are excluded from forward-looking decisions; only opportunity cost matters.

The nine canvas blocks split into desirability (value proposition, segments, channels, relationships), viability (revenue, cost) and feasibility (resources, activities, partners).

Contribution margin per unit = price − variable cost per unit.

Break-even volume = fixed costs ÷ contribution margin per unit.

LTV = average revenue per customer × gross margin × retention period.

A viable model generally needs LTV above three times CAC.

Marginal cost must fall or stay flat as volume grows for the model to scale.

The lean cycle is build, measure, learn, driven by falsifiable hypotheses.

Pivots change one core hypothesis while retaining validated learning.

Porter's five forces are rivalry, new entrants, substitutes, buyer power and supplier power.

Generic strategies are cost leadership, differentiation and focus.

VRIO stands for valuable, rare, inimitable and organised.

The Ansoff matrix runs from market penetration to diversification, increasing risk.

The experience curve links unit cost to cumulative, not current, output.

Sustained advantage means above-industry-average ROIC.

HHI = sum of squared market shares; above 2,500 is high concentration.

SWOT must be converted into SO, ST, WO and WT actions to be strategic.

Functional, divisional, matrix and network structures differ in specialisation and coordination cost.

A narrow span of control creates a tall hierarchy; a wide span flattens it.

Herzberg treats pay as a hygiene factor, not a motivator.

Recruitment runs from job analysis to onboarding, with defined selection criteria.

The 2021 Spanish labour reform sharply restricted temporary contracts.

The convenio colectivo binds the firm on wages, working time and grading.

Turnover rate = leavers ÷ average headcount × 100.

Kirkpatrick levels: reaction, learning, behaviour, results.

The 4P mix covers product, price, place and promotion.

The product life cycle stages are introduction, growth, maturity and decline.

STP means segmentation, targeting and positioning.

Segments must be measurable, accessible, substantial, differentiable and actionable.

Primary research collects new data; secondary research uses existing sources such as INE and Eurostat.

Elasticity = % change in quantity ÷ % change in price.

|E| > 1 means elastic demand, so a price cut raises revenue.

Market share = firm sales ÷ total market sales × 100.

Process types run from project and job shop to batch, mass and continuous flow.

Productivity = output ÷ input.

Break-even units = fixed costs ÷ (price − variable cost per unit).

EOQ = √(2DS/H).

Just-in-time lowers inventory but raises disruption exposure.

Prevention and appraisal costs are the cost of good quality; failure costs are the cost of poor quality.

SPC control limits sit at plus or minus three sigma.

Capacity utilisation = actual output ÷ maximum capacity × 100.

Assets = Liabilities + Equity.

Working capital = current assets − current liabilities.

Cash conversion cycle = days inventory + days receivable − days payable.

Current ratio = current assets ÷ current liabilities; acid test excludes inventory.

ROE = net profit ÷ equity.

NPV = Σ CFt ÷ (1+k)^t − initial investment; accept when NPV > 0.

IRR is the rate making NPV = 0; accept when IRR exceeds the cost of capital.

Payback ignores post-payback cash flows and the time value of money.

Contract elements are consent, object, cause and capacity.

Incorporation requires a notarial deed and registration at the Registro Mercantil.

Directors must file for insolvency within two months of inability to pay debts.

Consumer goods carry a three-year warranty and distance sales a 14-day withdrawal right.

Patents last 20 years, trademarks 10 years and are renewable, copyright life plus 70 years.

Carroll's CSR dimensions are economic, legal, ethical and philanthropic.

The triple bottom line reports people, planet and profit.

The CSRD reaches SMEs indirectly through supply-chain data requests.

PESTEL factors are political, economic, social, technological, ecological and legal.

The specific environment covers customers, suppliers, competitors and financial intermediaries.

Sociedad limitada minimum capital is €1; sociedad anónima is €60,000.

Value added = output − intermediate consumption.

EU SME classes: micro under 10, small under 50, medium under 250 employees.

The circular flow links households, firms and the public sector.

Opportunity cost is the value of the best forgone alternative.

The canvas has nine blocks covering desirability, viability and feasibility.

Contribution margin = price − variable cost per unit.

Break-even volume = fixed costs ÷ contribution margin per unit.

LTV = average revenue per customer × gross margin × retention period.

A viable model generally needs LTV above three times CAC.

Marginal cost must fall or stay flat with volume for scalability.

The lean cycle is build, measure, learn.

A pivot changes one core hypothesis and keeps validated learning.

Porter's five forces are rivalry, entrants, substitutes, buyer power and supplier power.

Generic strategies are cost leadership, differentiation and focus.

VRIO means valuable, rare, inimitable and organised.

The Ansoff matrix orders options by increasing risk.

The experience curve uses cumulative output.

Sustained advantage means above-industry-average ROIC.

HHI above 2,500 indicates high concentration.

SWOT becomes strategic only through TOWS actions.

Functional, divisional, matrix and network structures differ in coordination cost.

A narrow span of control produces a tall hierarchy.

Herzberg classifies pay as a hygiene factor.

Recruitment runs from job analysis to onboarding.

The 2021 labour reform restricted temporary contracts in Spain.

The convenio colectivo sets binding minimum wages and working time.

Turnover rate = leavers ÷ average headcount × 100.

Kirkpatrick levels are reaction, learning, behaviour and results.

The 4P mix covers product, price, place and promotion.

The product life cycle runs from introduction to decline.

STP means segmentation, targeting and positioning.

Segments must be measurable, accessible, substantial, differentiable and actionable.

Primary research collects new data; secondary research uses existing sources.

Elasticity = % change in quantity ÷ % change in price.

|E| > 1 means elastic demand.

Market share = firm sales ÷ total market sales × 100.

Process types run from project to continuous flow.

Productivity = output ÷ input.

Break-even units = fixed costs ÷ (price − variable cost per unit).

EOQ = √(2DS/H).

Just-in-time lowers inventory but raises disruption exposure.

Prevention and appraisal costs are the cost of good quality.

SPC control limits sit at plus or minus three sigma.

Capacity utilisation = actual output ÷ maximum capacity × 100.

Assets = Liabilities + Equity.

Working capital = current assets − current liabilities.

Cash conversion cycle = days inventory + days receivable − days payable.

Current ratio = current assets ÷ current liabilities.

ROE = net profit ÷ equity.

NPV = Σ CFt ÷ (1+k)^t − initial investment.

IRR is the rate making NPV = 0.

Payback ignores post-payback cash flows.

Contract elements are consent, object, cause and capacity.

Incorporation requires a notarial deed and Registro Mercantil registration.

Directors must file for insolvency within two months.

Consumer goods carry a three-year warranty.

Patents last 20 years and trademarks 10 years.

Carroll's CSR dimensions are economic, legal, ethical and philanthropic.

The triple bottom line reports people, planet and profit.

The CSRD reaches SMEs through supply-chain data requests.

PESTEL covers political, economic, social, technological, ecological and legal factors.

The specific environment covers customers, suppliers, competitors and financial intermediaries.

Sociedad limitada minimum capital is €1; sociedad anónima is €60,000.

Value added = output − intermediate consumption.

EU SME classes: micro under 10, small under 50, medium under 250 employees.

The circular flow links households, firms and the public sector.

Opportunity cost is the value of the best forgone alternative.

The canvas has nine blocks covering desirability, viability and feasibility.

Contribution margin = price − variable cost per unit.

Break-even volume = fixed costs ÷ contribution margin per unit.

LTV = average revenue per customer × gross margin × retention period.

A viable model generally needs LTV above three times CAC.

Marginal cost must fall or stay flat with volume for scalability.

The lean cycle is build, measure, learn.

A pivot changes one core hypothesis and keeps validated learning.

Porter's five forces are rivalry, entrants, substitutes, buyer power and supplier power.

Generic strategies are cost leadership, differentiation and focus.

VRIO means valuable, rare, inimitable and organised.

The Ansoff matrix orders options by increasing risk.

The experience curve uses cumulative output.

Sustained advantage means above-industry-average ROIC.

HHI above 2,500 indicates high concentration.

SWOT becomes strategic only through TOWS actions.

Functional, divisional, matrix and network structures differ in coordination cost.

A narrow span of control produces a tall hierarchy.

Herzberg classifies pay as a hygiene factor.

Recruitment runs from job analysis to onboarding.

The 2021 labour reform restricted temporary contracts in Spain.

The convenio colectivo sets binding minimum wages and working time.

Turnover rate = leavers ÷ average headcount × 100.

Kirkpatrick levels are reaction, learning, behaviour and results.

The 4P mix covers product, price, place and promotion.

The product life cycle runs from introduction to decline.

STP means segmentation, targeting and positioning.

Segments must be measurable, accessible, substantial, differentiable and actionable.

Primary research collects new data; secondary research uses existing sources.

Elasticity = % change in quantity ÷ % change in price.

|E| > 1 means elastic demand.

Market share = firm sales ÷ total market sales × 100.

Process types run from project to continuous flow.

Productivity = output ÷ input.

Break-even units = fixed costs ÷ (price − variable cost per unit).

EOQ = √(2DS/H).

Just-in-time lowers inventory but raises disruption exposure.

Prevention and appraisal costs are the cost of good quality.

SPC control limits sit at plus or minus three sigma.

Capacity utilisation = actual output ÷ maximum capacity × 100.

Assets = Liabilities + Equity.

Working capital = current assets − current liabilities.

Cash conversion cycle = days inventory + days receivable − days payable.

Current ratio = current assets ÷ current liabilities.

ROE = net profit ÷ equity.

NPV = Σ CFt ÷ (1+k)^t − initial investment.

IRR is the rate making NPV = 0.

Payback ignores post-payback cash flows.

Contract elements are consent, object, cause and capacity.

Incorporation requires a notarial deed and Registro Mercantil registration.

Directors must file for insolvency within two months.

Consumer goods carry a three-year warranty.

Patents last 20 years and trademarks 10 years.

Carroll's CSR dimensions are economic, legal, ethical and philanthropic.

The triple bottom line reports people, planet and profit.

The CSRD reaches SMEs through supply-chain data requests.