Business Case Flashcards
Breakeven Units with Target Profit
Target Profit = CM x Units
Weighted Average Formula
((N1 x Average 1) + (N2 x Average 2)) / Total N
What to consider when evaluating the business
Target market, competition, core competencies, barriers to entry, business cycle stage, method to measure viability, opportunity cost
Product Life Cycle Stages
Introduction, Growth, Maturity, Decline
4 Main Types of Barriers to Entry
Legal, Technical, Strategic, Loyalty
Opportunity Cost
The benefit you forego in choosing one course of action over another
Breakeven Point per Unit
Fixed Costs / (Sales Price Per Unit – Variable Costs Per Unit)
Cost per Subscriber
Cost of Mailing / Response Rate
Market/External Impact Examples
- Competitors
- Economic Health
- Regulation / Government
- Industry Trends
- Geography / Climate
Customer/Internal Impact Examples
- Internal Capabilities
- Acquisitions
- Manufacturing Capacity
- Distribution Networks
- Brand Perception
- Exit Strategies
- Consumer Preferences
Example Brainstorming Frameworks
Internal vs. External, The Supply Chain, Financial vs. Non-financial, Stakeholders, Long-term vs. Short-term, Customer Journey (AIDA)
AIDA
Attention, Interest, Desire, Action
4 Ps
Product, Price, Promotion, Place
4 ways to segment customers
geographical, demographic, behavioral, psychological
Breakeven in years
investment cost / annual profit
return on investment (ROI)
(revenue - investment costs) / investment costs
10 ways to improve a trash can
- Odor - Add air freshener to it to ensure rotten smell is taken care of.
- Trash level - Simple indicator lets people know the time to change it.
- Integration with smart homes - Tell people the days trash hasn’t been removed.
- Pest repellant - Inbuilt system to repel pests.
- Food composter - Compost waste food into manure.
- Compressor - Compress trash with a simple lever.
- Compartments for different trash types.
- Connect directly to trash lines for easy removal.
- Integrate with vacuum cleaner to directly take in trash from cleaning.
- Kid friendly - Small compartment for kids to tuck in small bits of trash without height issues
Steps to answer favorite product question
business objective, user problems, solutions
new product development process
idea generation, idea screening, concept development and testing, building a market strategy, product development, market testing, and market commercialization
