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BTS exam Flashcards

1
Q

Business model shifts
Service shift

A

From product to service
Goal: meet a job to be done/need
- end of ownership & prefer outcome over ownership
BMC changes: Revenue streams come from subscription / pay per use fee
Examples: Netflix, Felix, Check

Product design business model: designed to develop products in an efficient way
Service design business model: Get a job done for customers, meeting needs

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2
Q

Business model shifts:
Business model shift

A

A change in current business model
- Shift in customer segment or relation
- Shift in value proposition
- Shift in cost structure/ revenue streams
Think of the business model canvas

Due to external factors.

6 types of shifts:
1. Service shift
2. Digital shift
3. Stakeholder shift
4. Platform shift
5. Exponential shift
6. Circular shift

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3
Q

Business model shifts
Stakeholder shift

A

From shareholder to stakeholder
BMC changes: new customer segments, new partners, one customer segments fuels the other
Examples: Tony’s Chocolonely

  • “Robin Hood”
  • Serves both functional and emotional needs

Shareholder business model: aim is to return max. results to shareholders
Stakeholder business model: move from shareholder orientation to creating value for all stakeholders and society

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4
Q

Business model shifts
Digital shift

A

From physical to digital
BMS changes:
- channels: digital elements added
- Customer relationship: using digital technologies creates a better customer experience.
Examples: AH bonus, Online newspaper

Goal: Provide a smooth and seamless customer experience
- Design customer experience and track behavior.

Digital business model: use digital technologies to deliver great customer experiences.

Technology is the enables of the value proposition

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5
Q

Business model shifts
Platform shift

A

From pipeline to platform
Goal: Connecting people who have something to people who need something
BMC changes:
- key activities: connect supply and demand
- Key resources: strong digital capabilities
Examples: Airbnb, Uber

Pipeline business model: value is created in a linear shift (value chain)
Platform business model: facilitating exchange between people who need something and people who have something

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6
Q

Business model shifts
Exponential shift

A

From incremental to exponential
Goal: making disruptive & transformational changes resulting in rapid growth
BMC changes:
- Key activities: continuos experimentation
- Value prop: Value delivery by combining innovative technologies
Examples: Tesla, Apple

Incremental business model: Remaining status quo and slightly growing
Exponential business model: addressing grand challenge by investing in exponential tech

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7
Q

Business model shifts
Circular shift

A

From linear to circular
Goal: minimizing waste, maximize productivity & creating a closed loop system
BMC changes:
- Key activities: recycle: waste from production process is input for others
- Value proposition: repair services to expand lifetime
Examples: Patagonia, thrift shops

Linear business model: low quality, cheap production
Circular business model: waste & footprint are reduced

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8
Q

Finance

Pension funds

A

Funds that represent the retirement assets of workers
- Payment is received after retirement
- Contribute to individual pension accounts of employees

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9
Q

Finance

Pension funds foundations & endowment funds (schenkingen)

A

Non profit foundations & organizations which retain & invest funds over long periods of time to create stability

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10
Q

Finance
Buy side

Analysts

A

Value companies by creating forecasts and then making recommendations to investors

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11
Q

Finance
Buy side

Institutional investors

A

The buy side (money/asset managers)

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12
Q

Finance
Buy side

Mutual funds
(active and passive)

A

Have a collective of stocks that do not share the same risks (diversification)

Active: manager personally decides where to invest
Passive: Cheap, no need for manager, following mutual funds

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13
Q

Finance
Buy side

Sovereign wealth funds
(zelf beschikking van staten)

A

Countries with excess savings investing trough sovereign wealth funds

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14
Q

Finance
Buy side

Hedge funds
Going long - going short
(Hedge=protect)

A

(similar to mutual) Only so-called “sophisticated (rich) investors” can buy them. High risk

Long –> buy the stock
Short –> borrow stock, sell, buy back at lower rate

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15
Q

Finance
Sell side

Traders

A

Make money from the bid-ask spread and get a comission

Example: Ask= lowest price willing to sell = €10
Bid= highest price willing to sell €25
bid-ask spread = €15

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16
Q

Finance
sell side

Sales people

A

Sell stocks/bonds to the buy side

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17
Q

Finance
Sell side

Invetsment bankers

A

Work with companies that either want to buy or sell operating assets “brokers for business”

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18
Q

Finance
Incentives for equity analysts

Ranking systems
(what problem does it create)

A

The higher the rank, the higher the reward

Problem: young investors say extreme things, if they are right, their ranking shoots up

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19
Q

Finance
Special Purpose Vehicle (SPV)

A

A subsidiary created by a parent company to isolate financial risk

Benefits:
- Isolate financial risk
- Direct ownership of financial assets
- Hold companies key properties

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20
Q

Finance
Risk mitigation

A

The SPV’s help the parent company to isolate risk in projects or operations legally.

Securitization of loans is one of the most common reasons for SPV

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21
Q

Finance
Joint venture

A

Business agreement where two or more parties pool their resources to accomplish a specific goal

The venture is it’s own entity
Common use: partner with local businesses to enter foreign markets

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22
Q

Finance
Joint venture
Types of JV

A
  1. Project based JV
  2. Vertical JV
  3. Horizontal JV
  4. Functional JV
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23
Q

Finance
Joint venture
Benefits

A
  • Penetrating new markets
  • synergy
    -maximum flexibility and limited liability
  • decreased go to market time
24
Q

Finance
Joint venture
Reasons

A
  1. Leverage resources –> combine resources of both companies
  2. reduce costs –> economies of scale result in lower price per unit
  3. Combine expertise –> different skills sets which compliment each other
  4. enter foreign markets
25
Finance joint venture cons
- Requires a lot of control - companies need same goals - difference in company culture & management style can be a barrier - multiple management teams involved
26
Finance Consortium
Similar to Joint Venture, but more informal
27
Finance Merges and acquisitions How an acquirer can improve it's targets competitiveness
1. Being a smarter provider of growth capital 2. providing a better managerial oversight 3. Transferring valuable skills 4. Sharing valuable capabilities
28
Finance Business unit within a company Considerations
- Fiscal factor --> possible tax losses / tax structure optimization - Capital markets factor --> cheaper financing activities using commissioners' risk profile - Foreign exchange factor --> natural hedging is possible when the same currency as revenue & costs are earned - Governance & reputation factors --> Low risk, less flexible, decision making takes time
29
Finance Mergers and acquisitions Checklist for oppertunity
- Identify target - Asses chance of succes - Value the target - Legal compliance - Integration
30
Finance Mergers and acquisitions Benefits
- Encourage teamwork - Bigger marketshare - Better performance
31
Finance Mergers and acquisitions Motivations
- Growth - Regulation - New opportunities - Economies of scale - New technology - Tax purposes
32
Finance Mergers and acquisitions Types
- Vertical acquisition --> typically when a company buys one of their suppliers, boosts profits - Horizontal acquisitions --> Company takes over a company that operates at the same level -Diversification
33
Finance Mergers and acquisitions Merger considerations
- Fiscal factor --> depending on how assets are valued tax consequences might occur - Capital market factor --> financing need is often less than acquisition - Reputation factor --> Merger seems more friendly than acquisition
34
Finance Mergers and acquisition Acquisition considerations
- Fiscal factor --> target company continues to pay tax - Capital market factor --> Big financing will be involved - Foreign exchange factor --> Could have significant impact due to different locations of companies - Reputation factor --> can strengthen or weaken the companies reputation
35
Finance Capital raising implications for chosen structure - Business unit financing
Business unit financing --> New projects and ideas are financed trough the company's available resources
36
Finance Capital raising implications for chosen structure - SPV
SPV financing Isolated via a separate legal entity - Intercompany loans provided by the commissioner - Selling shares from SPV's to investor - Corporate bonds
37
Finance Capital raising implications for chosen structure - Joint venture
JV financing - Loans provided by JV partners - (depending on legals) external financing via banks
38
Finance Capital raising implications for chosen structure - M&A financing
M&A financing - Exchange stock - Debt financing - Cash - Leverage buy out - Bank loan
39
Law 5 conditions to enter into a contract
1. The offer 2. The acceptance 3. The consideration (who is paying what) 4. Competency and capacity 5. Legal intent
40
Law Why do we need contracts
- Misunderstanding of the agreement - Supplier does not supply what is agreed - Buyer refused to pay - Supplier causes damage
41
Law 6 elements of a contract
1. Description of all parties involved 2. Jurisdiction of the contract (validity, correctness & enforcement) 3. Nature of the consideration (rights granted) 4. The definition and interpretation of terms used in the contract 5. The duration and territory 6. Obligations associated with each role & terms and conditions for invoicing and payment
42
Leadership Situational leadership Purpose
- Open communication - Help other develop competence & commitment - teach other how to provide on their own direction & support - Value and honor differences
43
Leadership Situational leadership 3 skills
Diagnosis, flexibility, partnering for performance
44
Leadership 4 development levels
D4, self reliant. High competence & commitment D3, moderate to high competence, variable commitment D2, low to some competence, low commitment D1, low competence, high commitment
45
Leadership 4 development levels D4 characteristics
D4, Self reliant achiever - expert - inspired / inspires others - accomplished
46
Leadership 4 development levels D3 characteristics
D3, Capable but cautious performer - Self critical - Contributing - Insecure
47
Leadership 4 development levels D2 characteristics
D2, Dillusioned learner - Demotivated - Confused - Overwhelmed / frustrated
48
Leadership 4 development levels D1 characteristics
D1, Enthusiastic learner - curious - optimistic / hopeful - inexperienced
49
Leadership Positive leadership 4 characteristics of a meaningful job
1. Positive impact 2. Core individual values 3. Long-term impact 4. Community
50
Leadership Transactional leadership 4 characteristics
1. Idealized influence (role model) 2. Inspirational motivation (rewards) 3. Intelectual stimulation 4. Individualized consideration
51
Leadership Transactional leadership 3 characteristics
- Management by exceptions - Promises reward for good performance - Laissez-faire
52
Ethics Identifying problems & solutions Shareholders
- Conflict of interest, executive compensation, dividend policy, governance Solution: fair & transparent compensation structure which aligns pay & performance
53
Ethics Identifying problems & solutions Employees
- Fair treatment, compensation, diversity, rights, health & safety Solution: fair wages, safe & inclusive environment, policies & innovations protecting wellbeing
54
Ethics Identifying problems & solutions Consumers
Deceptive advertising, product safety, fair pricing, customer privacy Solution: Recall or replace product as soon as it becomes known, provide accurate & transparent info to customers, disclosing risks
55
Ethics Identifying problems & solutions Suppliers & competitors
Supplier relation, labor practices in supply chain, responsible sourcing Solution: thorough due diligence of suppliers for labor practice, responsible sourcing policies, collaborate with suppliers to improve conditions, insource supplyEthics Identifying problems & solutions Shareholders
56
Ethics Identifying problems & solutions Civil society
Corporate Social Responsibility (CSR) impact on society, pollution, local communities, health & environment Solution: Implement sustainable practices to minimize harm, engage community, partnership to adres concerns

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