business awareness Flashcards
what is a retail concession
brand establishes a physical presence within anotehr brand’s store
B2C
business 2 customer
What is Amazon
What is Amazon’s revenue per year?
$470B
Market share definition
company’s sales over the period / industry’s total sales ove rthe period
Product Mix definition
A product mix is the total number of product lines and individual products or services offered by a company.
Recession
A recession is a significant decline in economic activity that lasts longer than a few months.
Cyclical market
Examples of cyclical companies
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)
Non cyclical stocks
services or products that remain in demand regardless of economic conditions (eg. utilities, tobacco, grocery companies)
Customer churn rate
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%
Fixed Cost definition
A fixed cost is a business expense that does not vary even if the level of production or sales changes.
Fixed costs examples
Fixed costs include any number of expenses, including rental and lease payments, certain salaries, insurance, property taxes, interest expenses, depreciation, and some utilities.
Conglomerate definition
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.
Customer segmentation definition
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.
Business Cartel definition
A cartel is where two or more businesses agree not to compete with each other. T
Due Diligence in M&As definition
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.
What is the capital of a business
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.
Synergy M&A meaning
Synergy refers to any additional value yielded through a mergers and acquisitions (M&A) transaction
Price Premium definition
Price premium, or relative price, is the percentage by which a product’s selling price exceeds (or falls short of) a benchmark price.
what is break even
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.
Market cannibalisation
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.
Brand dilution
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
Finance definition of synergy
the collective benefit that two companies achieve when they merge or form strategic alliances.
