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Business Economics > Mid- Term (24.10.16) > Flashcards

Mid- Term (24.10.16) Flashcards

1
Q

Circular flow

A

Neoclassical economic model showing how money flows through the economy.
Money flows to workers as wage/ salaries
Money flows to firms in exchange for products

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2
Q

Opportunity Cost

A

A benefit a person could have received, but gave up to choose other option

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3
Q

Production possibilities frontier (PPF)

A

Curva que ayuda a decidir que producto conviene mas producir

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4
Q

Value of marginal products

A

is the change in output that occurs when 1 ore more inputs are added

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5
Q

Key performance indicator

A

Measures success in achieving predeterminated goal

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6
Q

Demand

A

amount of a product people is willing to buy at a certain price

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7
Q

Demand shifts to the right

A

Increase in the quantity demanded at every price

Why: Increases in price of substitute, increase in income, change in taste and preferences

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8
Q

Demand shifts to the left

A

Demand decreases

why: Decrease in price of substitute, decrease in income, change in taste and preferences

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9
Q

Supply

A

Amount of a certain good producers are willing to sell when receiving a certain price

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10
Q

Supply shifts to the left

A

the cost rises, less can be produced at any given price

why: change in technology, change in production costs, number of sellers and change in suppliers expectation

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11
Q

Supply shifts to the right

A

costs fall, more can be produced

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12
Q

Elastic products

A

Change in price causes a bigger change in demand

E.g: Heinz soup, if prices increase, customers will change to substitute

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13
Q

Inelastic products

A

Change in price causes a small change in demand

E.g: petrol, despite it’s price, people has to buy it.

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14
Q

Types of company

A

For profit: earn money
Non- governmental organization: ayudar a personas
Public

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15
Q

Goals of a company

A

Purpose of a business it to maximize profits for it’s owners or stakeholders while maintaining corporate social responsble

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16
Q

Economy of Scale

A

Happens when the increase of an output leads to lower units of cost
E.g: Bulk buying, buy in large quantities= cheaper

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17
Q

What is a market?

A

It is an structure that allows buyers and sellers to exchange any type of goods, services and information in exchange for money.

18
Q

PESTLE

A

Identifies how various macro environmental factors might affect organization.
E.g: Political, Economic, Social, Technological, Legal

19
Q

Porter’s 5 forces

A

Model that identifies and analyzes 5 competitive forces that shape an industry, helps determine weakness and strengths of a firm.

20
Q

Blue ocean

A

Uncontested market space for unknown industry or innovations
Competition is weak in comparison to benefits

21
Q

Franchise

A

Typo of license that someone accquires to have acces to the proprietary knowledge, processes and trademark in order to provide service under the business’s name

22
Q

Value Chain

A

Model by which a business receive raw material, add value to raw material through different processes to create a finished product and sell it.

23
Q

Primary activities of Value Chain

A

Inbound logistics: arranging inbound movements
Operations: managing the process that converts inputs into outputs
Outbound logistics: Process related to the storage and movement of final product
Marketing and Sales: selling the product
Service: all activities required to keep the products working effectively

24
Q

Crowdfounding

A

project or venture by raising many small amounts of money from large number of people, typically via internet

25
Q

IPO?

A

Initial public offering

First time that the stock of a private company is offered to the public

26
Q

Pre- money

A

Before any additional investment is made

27
Q

Post- money

A

Money a company has after investment

28
Q

Internal growth

A

Generated through increasing sales

To increase sales, firms need to: market efficiently, invest in new equipment and capital, invest in labor

29
Q

External growth

A

Mergers: agreed “union” between two firms
Takeover: one firm seeking control over another firm.

30
Q

Vertical integration

A

When the company expands its business operations into different steps on the same production path.
*) Companies that operate on the same value chain
Motivation: it reduces cost
E.g. Google bought android, Motorola, internet, softwares

31
Q

Horizontal integration

A

It is the acquisition of additional business activities that are at the same level in the value chain in similar or different industries.
Achieved by: reinvestment of operating profits (internal), merger or acquisition ( external)
Motivation: allows to share resources at that level
E.g. Kraft foods buoyed Cadbury// at&t bought t-mobile

32
Q

Conglomerate acquisition

A

Amalgamation, merger, takeover of firms in different lines of business
Motivation: diversification, take risks.
E.g. Until ever has foods, products de cuidsdo personal

33
Q

4 P’s

A

Product: functionality, brand, packaging and services
Price: last price, discounts, bundling, credit terms
Promotion: advertisement, sales force, publicity, sales promotion
Place: channel, inventory, logistics, distribution

34
Q

Segment your market by:

A

1) Brainstorm every use of the product or service
2) Identify and specific market segment
3) Talk to potential segment and become familiar with the problems
4) Observe potential customers and clarify how can you help them.
5) Be open to the idea that everything can change in the end.
6) Spend at least a few weeks doing your primary market research.

35
Q

Select a beachhead by:

A

The segment has to meet three conditions:

1) Gas to be a group of customers who all by similar products and have similar goals
2) All customers within this segment have similar sales and equivalent expectations of value
3) Evidence that “word of mouth” is happening.

36
Q

What NOT to do with investors

A
  • Bad partners
  • Not having a full- time CEO
  • Bad business plan
  • Acceptance of dilution
  • No difference between spinoff and research group
37
Q

Spinoff

A

It is the creation of an independent company through the sale or distribution of new shares of an existing business

38
Q

Startup

A

Is a company that is in the first stages of its operations. Often initially sustained with entrepreneurs money until they find long- term investors

39
Q

What investors want:

A
  • Excellent proof of results
  • Technology transfer and license
  • Good patent
  • Well developed plan
  • Business model well defined
  • Lifecycle of current fund
  • Stage of development of the current project
  • Existing full- time CEO
40
Q

10 key success factors

A 
Market research 
Competitive position
Proof that the product will work
IP protection
Regulatory strategy
Development plan
Team project
External advisers
Financial plan
Negotiations plan

Business Economics (1 decks)

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