business awareness

Question 1

what is a retail concession

Answer 1

brand establishes a physical presence within anotehr brand’s store

Question 2

B2C

Answer 2

business 2 customer

Question 3

What is Amazon

Question 4

What is Amazon’s revenue per year?

Answer 4

$470B

Question 5

Market share definition

Answer 5

company’s sales over the period / industry’s total sales ove rthe period

Question 6

Product Mix definition

Answer 6

A product mix is the total number of product lines and individual products or services offered by a company.

Question 7

Recession

Answer 7

A recession is a significant decline in economic activity that lasts longer than a few months.

Question 8

Cyclical market

Question 9

Examples of cyclical companies

Answer 9

airlines, hotels, restaurants, auto manufacturers, luxury goods producers

these are the first things to cut when times get tough (cyclical stocks are subject to elastic demand)

Question 9

Non cyclical stocks

Answer 9

services or products that remain in demand regardless of economic conditions (eg. utilities, tobacco, grocery companies)

Question 10

Customer churn rate

Answer 10

normal rate at which customers leave
(if 10% customers leave every month then we need to get 10% new customers just for revenues to stay the same)

A customer retention problem happens when that 10% rate increases and more than 10% of customers leave per month - revenue declines)

A customer acquisition problem happens when the rate that customers leave didn’t increase (stays 10%) and we CAN’T find new customers (10% new customers) to make up for that loss of 10%

Question 10

Fixed Cost definition

Answer 10

A fixed cost is a business expense that does not vary even if the level of production or sales changes.

Question 11

Fixed costs examples

Answer 11

Fixed costs include any number of expenses, including rental and lease payments, certain salaries, insurance, property taxes, interest expenses, depreciation, and some utilities.

Question 12

Conglomerate definition

Answer 12

A conglomerate is the combination of two or more business entities engaged in either entirely different or similar businesses that fall under one corporate group, usually involving a parent company and many subsidiaries. Often, a conglomerate is a multi-industry company and is often large and multinational.

Question 13

Customer segmentation definition

Answer 13

Customer segmentation is the process of dividing a company’s customers into groups based on common characteristics so companies can market to each group effectively and appropriately.

Question 14

Business Cartel definition

Answer 14

A cartel is where two or more businesses agree not to compete with each other. T

Question 15

Due Diligence in M&As definition

Answer 15

Due diligence is a process of verification, investigation, or audit of a potential deal or investment opportunity to confirm all relevant facts and financial information and to verify anything else that was brought up during an M&A deal or investment process.

Question 16

What is the capital of a business

Answer 16

The capital of a business is the money it has available to fund its day-to-day operations and to bankroll its expansion for the future. The proceeds of its business are one source of capital.

Question 17

Synergy M&A meaning

Answer 17

Synergy refers to any additional value yielded through a mergers and acquisitions (M&A) transaction

Question 18

Price Premium definition

Answer 18

Price premium, or relative price, is the percentage by which a product’s selling price exceeds (or falls short of) a benchmark price.

Question 19

what is break even

Answer 19

the point at which cost and income are equal and there is neither profit nor loss. also : a financial result reflecting neither profit nor loss.

Question 20

Market cannibalisation

Answer 20

a drop in sales and demand for a product when the company replaces it with a new one. Market cannibalization can occur when a new product is similar to an existing product, and both share the same customer base.

That is product cannibalization. An example of this is if you have a flavored lemon juice that you are selling. Now you decide to sell the same product with less sugar and price reduction. Your consumers will go for the second product because it has an added advantage and lower price.

Question 21

Brand dilution

Answer 21

Brand dilution, also known as excessive brand extension, is when a brand diminishes its value, usually after releasing a product that doesn’t align with the company’s original mission.

Brand dilution happens when a brand fails to live up to customers’ expectations and, as a result, they negatively perceive the company’s value, quality and authenticity

Question 22

Finance definition of synergy

Answer 22

the collective benefit that two companies achieve when they merge or form strategic alliances.