PAU Balearic Islands Business & Business Model Design (UIB) flashcards

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

Added value

Difference between the market value of a firm's output and the value of intermediate goods and services bought from other firms. It funds wages, interest, rent, taxes and profit.

Sole trader liability

A sole trader owns the business personally and has unlimited liability, so personal assets can be used to pay business debts. No minimum capital or registration as a company is required.

PESTEL analysis

Framework scanning external macro factors: Political, Economic, Social, Technological, Ecological and Legal. It identifies opportunities and threats outside the firm's control before strategy is set.

Business model definition

The logic through which an organisation creates, delivers and captures value. It explains who the customers are, what is offered, how it reaches them and how revenue exceeds costs.

Value proposition

The specific bundle of products or services that solves a customer problem or satisfies a need, stating the pains relieved and gains created for a defined customer segment.

Multi-sided platform segment

A business model serving two or more interdependent customer segments, such as buyers and sellers, where value for one group depends on the presence of the other group.

Revenue stream types

Ways a firm captures value: asset sale, usage fee, subscription, lending, renting or leasing, licensing, brokerage commission and advertising. Each has its own pricing mechanism and risk.

Key resources

The most important assets required for a business model to work: physical, intellectual, human and financial. They may be owned, leased or accessed through partners.

Economies of scale

Reduction in cost per unit as output volume increases, because fixed costs are spread over more units or purchasing and production become more efficient.

Cost-driven business model

A model focused on minimising costs through low-price propositions and high automation. It targets price-sensitive customers and relies on volume and efficiency rather than customisation.

Break-even quantity

Number of units at which total revenue equals total cost, computed as fixed costs divided by the contribution margin per unit (price minus variable cost per unit).

Minimum viable product

The smallest product version that lets a team test key business hypotheses with real customers. Examples are a landing page, concierge service or single-feature product.

Build-Measure-Learn loop

Lean startup cycle in which a product is built, customer behaviour is measured with real metrics and lessons are learned. Progress is measured as validated learning, not features shipped.

Pivot

A structured change in business model elements after evidence shows a hypothesis is wrong, such as changing customer segment, need, channel or revenue model. It is distinct from abandoning the venture.

Value Proposition Canvas

Design tool that maps customer jobs, pains and gains against the product's pain relievers and gain creators, testing whether the offer fits the segment.

Porter's five forces

Industry attractiveness framework covering rivalry among existing competitors, threat of new entrants, threat of substitutes, supplier bargaining power and buyer bargaining power.

VRIO criterion

A resource gives sustained competitive advantage only if it is valuable, rare, difficult to imitate and supported by the organisation's ability to exploit it.

Cost leadership strategy

Generic strategy in which a firm becomes the lowest-cost producer in its industry while offering acceptable quality, achieving above-average returns through efficiency and scale.

Ansoff growth matrix

Framework combining existing and new products with existing and new markets, yielding market penetration, market development, product development and diversification, which carries the highest risk.

Market segmentation

Dividing a heterogeneous market into groups of buyers with similar needs or behaviour. Useful segments must be measurable, accessible, substantial, differentiable and actionable.

Positioning

The distinctive place a brand occupies in the target customer's mind relative to competitors, built from a clear value claim and consistent communication.

Price elasticity of demand

Percentage change in quantity demanded divided by percentage change in price. Demand is elastic when the absolute value exceeds one, so revenue falls if price rises.

Marketing mix 4Ps

Product, price, place and promotion. These controllable variables are combined to reach the chosen target segment and implement the positioning decision.

Conversion rate

Percentage of users who complete a desired action, such as a purchase, out of all users exposed to the digital channel. It links traffic volume to commercial results.

Balance sheet identity

Assets equal liabilities plus equity. Assets are resources controlled by the firm; liabilities and equity show how those resources are financed.

Working capital

Current assets minus current liabilities. A positive figure means short-term resources cover short-term obligations, indicating short-term financial soundness.

Net present value

Sum of expected cash flows discounted at the cost of capital, minus the initial investment. A positive NPV means the project creates value and should be accepted.

Internal rate of return

The discount rate at which a project's net present value equals zero. A project is acceptable when its IRR exceeds the firm's cost of capital.

Herzberg two-factor theory

Hygiene factors such as pay and conditions prevent dissatisfaction but do not motivate; motivators such as achievement, recognition and responsibility produce genuine satisfaction and effort.

Matrix structure

Organisational design combining functional departments with project or product lines, so employees report to two managers. It improves coordination but creates authority conflicts.

Tuckman team stages

Sequence of team development: forming, storming, norming, performing and adjourning. Each stage shows different conflict levels and leadership needs.

Contract essential elements

Consent of the parties, a definite object and a cause or lawful purpose, together with capacity. Where an element is missing or unlawful, the contract is void.

Triple bottom line

Sustainability framework evaluating a firm on three dimensions: economic profit, social equity and environmental quality, often summarised as people, planet and profit.

Carroll CSR pyramid

Corporate social responsibility levels: economic, legal, ethical and philanthropic responsibilities. Economic and legal duties are required; ethical and philanthropic ones go beyond legal obligation.