Mid- Term (24.10.16)

Question 1

Circular flow

Answer 1

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

Question 2

Opportunity Cost

Answer 2

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

Question 3

Production possibilities frontier (PPF)

Answer 3

Curva que ayuda a decidir que producto conviene mas producir

Question 4

Value of marginal products

Answer 4

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

Question 5

Key performance indicator

Answer 5

Measures success in achieving predeterminated goal

Question 6

Demand

Answer 6

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

Question 7

Demand shifts to the right

Answer 7

Increase in the quantity demanded at every price

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

Question 8

Demand shifts to the left

Answer 8

Demand decreases

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

Question 9

Supply

Answer 9

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

Question 10

Supply shifts to the left

Answer 10

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

Question 11

Supply shifts to the right

Answer 11

costs fall, more can be produced

Question 12

Elastic products

Answer 12

Change in price causes a bigger change in demand

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

Question 13

Inelastic products

Answer 13

Change in price causes a small change in demand

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

Question 14

Types of company

Answer 14

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

Question 15

Goals of a company

Answer 15

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

Question 16

Economy of Scale

Answer 16

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

Question 17

What is a market?

Answer 17

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

Question 18

PESTLE

Answer 18

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

Question 19

Porter’s 5 forces

Answer 19

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

Question 20

Blue ocean

Answer 20

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

Question 21

Franchise

Answer 21

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

Question 22

Value Chain

Answer 22

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

Question 23

Primary activities of Value Chain

Answer 23

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

Question 24

Crowdfounding

Answer 24

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

Question 25

IPO?

Answer 25

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

Question 26

Pre- money

Answer 26

Before any additional investment is made

Question 27

Post- money

Answer 27

Money a company has after investment

Question 28

Internal growth

Answer 28

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

Question 29

External growth

Answer 29

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

Question 30

Vertical integration

Answer 30

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

Question 31

Horizontal integration

Answer 31

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

Question 32

Conglomerate acquisition

Answer 32

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

Question 33

4 P's

Answer 33

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

Question 34

Segment your market by:

Answer 34

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.

Question 35

Select a beachhead by:

Answer 35

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.

Question 36

What NOT to do with investors

Answer 36

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

Question 37

Spinoff

Answer 37

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

Question 38

Startup

Answer 38

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

Question 39

What investors want:

Answer 39

- 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

Question 40

10 key success factors

Answer 40

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