chapter 3 Flashcards
Business Definition
includes the offer target market and product and delivery capability answering who what and how
the Offer
what will you sell to your customers and includes the complete bundle of products and services you will be bringing to the marketplace
Target Market
which segment of the market are you aiming to serve
Product and Delivery Capability
how will you provide your offer to your targeted customers
Four basic types of Businessess
Manufacturing
Wholesale
Retail
Service
Manufacturing
produces a tangible product and sells it either through distributors or directly to end customer
Wholesale
buys in bulk from manufacturers and sells smaller quantities to retailers
Retail
sells individual items to consumers
Service
sells an intangible product to businesses or consumers
Mission Statement
concise communication of your purpose business definition and values
clarify what the business is trying to do in the present and provide direction and motivation for future action
Vision
paint a picture of the overall view of what you want your organization to become in the future
Culture
composed of the core values of the organization in action
factors including risk tolerance and innovation orientation with respect to people teams and outcomes attention to detail and communication norms
Competitive Advantage
Strategy for beating the competition
must be sustainable
consumer need and want
6 factors of Competitive Advantages
1 quality 2 price 3 location 4 selection 5 service 6 speed/turnaround
Economics of one unit of sale (EOU)
the amount of gross profit that is earned n each unit of the product or service a business sells
Organizational core beliefs
beliefs guiding the company
5 Breakthrough Steps
1 calculating unit of sale 2 determining EOU 3 substituting someone elses labor 4 selling in volume 5 creating jobs and operating as a profit
Currency
term for money when exchanging internationally
Foreign Exchange Rate
relative value of one currency to another
3 Types of valuation
cost approach
market approach
discounted cash flow
EOU manufacturing
one item create and sell but includes direct labor
EOU Wholesale
buy for cheaper
sell for more
little/no direct labor
EOU Retail
buys for less and sells for more per item
EOU Service
Hairdresser charging for a haircut
