Week 3 (Chapter 4) Flashcards
Business plan
A firm’s plan or recipe that describes the rationale of how an organization creates, delivers, and captures value for its stakeholders.
- Business models seek to explain how value is created, not just how it is captured
Disruptive business model
Business models that do not fit the profile of a standard BM, and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry
New market disruption
Create a market that was not previously being served
Low-end market disruption
Provide a simpler or cheaper product/way to perform a similar task
Core strategy
Describes how the firms plans to compete relative to its competitors
Elements of a core strategy
- Business mission
- Basis of differentiation
- Target market
- Product/market scope
Business mission
A mission statement can provide insights into the fundamental goals of a company, its priorities, focus, what value delivers, its moral/ethical direction and can guide for decisions
Basis of differentiation
What does the company offer that others don’t addresses the questions: why should customers use/pay for your products/services rather than those from another company?
Target market
Identify an emerging or niche market within a larger market, identifying who your customers will be is extremely important to developing the right business model - it influences other parts of the BM design.
Product/ market scope
On which products and markets will the firm focus/concentrate on
Core competencies
Key skills, expertise, knowledge: what a company is good at.
Key assets
The assets that a firm owns that enable its business model to work. Can be: physical, intellectual, financial or human.
Cost structure
Cost or value driven business
Fixed costs
Costs that remain the same despite the volume of goods or servies provided
Variable costs
Vary proportionally with the volume of goods or services produced
