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Business Perspectives Exam
Business Perspectives Exam
45
Business
Graduate
10/19/2012

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Cards

Term
What is a business model?
Definition
Describes the logic of a company-how it operates and creates and captures value for stakeholders in a competitive marketplace.
Term
Explain the four components of a business model.
Definition
1)A customer value proposition 2)A profit formula 3)Key resources 4)Key processes
Term
Give and Explain examples of business models.
Definition
1)Low cost=lower cost to user, lower margins, must count on high volume for profit. 2)Differentiation=high value to user. Possible lower volume but higher margin.
Term
Porters 5 forces
Definition
1)Threat of new entrants 2)Bargaining power of suppliers 3)Threat of substitute products or services 4)Bargaining power of buyers 5)Rivalry amongst existing competitors
Term
b. Be able to apply Porter’s theories to the company for which you currently work including how to use these theories to better position (gain more power) your company
Definition
ex. Bargaining power of buyers using cash, checks or different charge cards forces us to offer rewards and perks.
Term
Know how to explain vertical integration
Definition
refers to the management control of varying aspects in the supply chain for output. ie. owning the steel mill that supplies steel to make the cars in your own facility.
Term
Stakeholder model
Definition
Corporate social responsibility model which states that every business decision affects a wide variety of people benefitting some and imposing costs on others.
Term
Operations and Supply Management
Definition
Design, operation and improvement of the systems that create and deliver the firms primary products and services.
Term
Efficient vs Effective
Definition
Efficient is doing something at the lower cost. Effective is doing the right things to create the most value for the company.
Term
Value
Definition
what is useful. . .
Term
Straddling
Definition
occurs when a firm seeks to match what a competitor is doing by adding new features,services or technologies to existing activities. .
Term
Explain productivity measurements
Definition
Outputs/Inputs A measure of how well resource are used.
Term
Be able to explain/apply a efficiency vs. effectiveness tradeoff
Definition
Occurs in the service industry whereas customers interfere with a business by asking questions, demanding service and even changing their minds which prohibits a business from being efficient.
Term
Strategic vs tactical forecasts
Definition
Strategic is used to set the strategy of how we will meet demand long term. Tactical is used to estimate demand in the relative short term/weeks or 6 months.
Term
Dependent vs Independent Demand
Definition
Dependent demand is the demand for a product that is caused directly by the demand of another. ie. the demand for bicycle tires is dependent upon the demand of bicycles in a manufacturing company. Independent demand is a demand for a product that is not related to the demand of another item. ie. the total number of total number of bicycles sold is not derived from other products.
Term
Components of demand
Definition
  1. cyclical elements-ex. war, economic factors, elections, socialogical pressures.
  2. random variation-caused by chance events.
  3.  auto correlation-denotes the persistance of an occurence
Term
Time series analysis-5 factors How to choose
Definition
  1. -time horizon to forecast
  2.  -data availability
  3. -accuracy required
  4. -size of forecasting budget
  5. -availability of qualified personnel
Term
Linear Regression formula
Definition
Y= a + bx
Term
moving averarages
Definition
  1. simple-used to forecast demand and removes random fluctuations.
  2. weighted-allows a given "weight" to be included in the element so long as the sum = 1.
  3.  exponential smoothing-used when the most recent data is more relavant than older.
Term
trend
Definition
-a tendency towards a demand based on historical data -
Term
  1. Data Set
  2. Elements
  3.  Variables
Definition
  1. -group of data used for a particular study
  2. -people, objects, events or other entities described in a data set
  3. -any characteristic of an element
Term
Time series vs. Cross sectional
Definition

=data collected over different time periods

=data collected at the same period or nearly same period of time.

Term
Population vs sample
Definition

 is a set of all elements about which we wish to draw conclusions.

 is a subset of the population.

Term

Descriptive statistics

statistical inferences

qualitative variables

Definition

=the science of describing the important aspects of a set of measurements.

=the science of using a sample of measurements to make generalizations about the important aspects of a population of measurements.

=category variables that simply record the categories that data fall into.

Term
objectives
Definition
=the overall strategy of a company
Term
The 4 P's of Marketing
Definition

Price=what do we charge

Product=what do we make/provide service

Place=how do deliver the product/service. Promotion=communication of our product/service

Term
Value based marketing
Definition
is used to decide what is most desired by a customer and providing this for them.
Term
5 Segmentation methods
Definition

geographic=where they live

demographic=age, gender, income psychographic=lifestyle, self concept, self values geodemographic=urban, affluent retirees, exurban,

Benefits= convenience, economy, prestige

Behavioral= occasion, loyalty

Term
Segmentation attractiveness
Definition
refers to answering the question of is the market worth pursuing. Is it profitable, identifiable, reachable and responsive?
Term
4 positioning methods
Definition

value proposition=unique value that product/service provides that its competitors don't

 salient attributes=Aspect of a product by which the consumer tends to judge a product.

symbols=many times it is the trademark or branding power that is unique.

competition=marketers use distinguishing verbage/symbols to differentiate themselves from their competitors in the marketplace

Term
perceptual mapping
Definition
=displays in 2 or more dimensions the position of products or brands in the consumers mind
Term
The 5 C's of pricing
Definition

competition=who are they and how many will help determine price

cost=how to stay profitable throughout differing levels of demand

company objectives=goals of company

customers=who are they and what do they value

channel members=manufacturers, wholesalers and retailers

Term
demand curve
Definition
as price goes down, demand goes up
Term
price elasticity of demand
Definition
determines how sensitive demand is relative to price increases
Term
formula for price elasticity
Definition
% change in quantity demanded / % change in price
Term
Break even analysis
Definition

examine relationship between cost, price, revenue and profit among varying degrees of production and sales. Calculate=fixed costs/contributions per unit (price - variable cost)

 

A formula for Break =Even : Fixed Costs / Price – Variable Costs   [Break-Even = Fixed Cost / GPM]

 


For Example:

Sales Price per unit = $100
Variable Unit Costs = $60 (COGS)
Gross Profit Margin = $40
Fixed Cost = $100,000

 

 

 

Break-Even = Fixed Costs / (Price – Variable Costs)

 

Break-Even = $100,000 / ($100 - $60 per unit)

 

Break Even = $100,000 / $40 per unit

Break Even = 2500 units

Term

variable costs

fixed costs

Definition

 are costs that vary with production such as labor and materials.

 remain a constant no matter how many units are produced such as rent, insurance and depreciation of equipment.

Term

monopoly

 oligopoly

monopolistic competition

pure competition

Definition

monopoly=one firm controls the market=less price competition=ex. power company

oligopoly=a small amt of firms control the market=price competition is usually reactionary to competitors=ex. airlines

monopolistic competition=many firms selling differentiated products @ different prices=differentiation more prevalant=watch makers

 pure competition=many firms selling commodities for the same prices=very aggressive pricing but through differentiation a company can avoid errosion=farmers

Term
factors that influence price elasticity of demand
Definition

income effect=as our income goes up we tend to buy more higher priced items

 substitution effect=how easy is it for a consumer to replace their focal brand.

cross price elasticity=refers to change in elasticity of complementary products

Term
Productivity
Definition
measures how well a business is using its resources
Term
Strategic Fit
Definition
expresses how a business is matching its resources with the opportunities in the external environment.
Term
Core Capabilities/Companies
Definition
describe skills that differentiate a company from its competitors
Term
Order Winners
Definition
describe the item that differentiates the product from it's competitors.
Term
Order Qualifiers
Definition
are screening criteria that a firm would use to decide if their products are candidates for purchase
Term
  1. seasonality
  2. cyclical
  3. random
Definition
  1. good example is snowblowers
  2. good example is inferior goods during a recession
  3. good example is ...random
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