ITM 100 Class 11 Chapter (1.2) Key Terms 2025/2026

textbook questions.

business model

A plan that details how a company creates, delivers, and captures value to generate revenues.

business process

A standardized set of activities that accomplish a specific task.

business strategy

A leadership plan that achieves a specific set of goals or objectives such as increasing sales, decreasing costs, entering new markets, or developing new products or services.

buyer power

The ability of buyers to affect the price they must pay for an item.

competitive advantage

A feature of a product or service that an organization’s customers place a greater value on than similar offerings from a competitor.

competitive intelligence

The process of gathering information about the competitive environment, including competitors’ plans, activities, and products, to improve a company’s ability to succeed.

entry barrier

A feature of a product or service that customers have come to expect and entering competitors must offer the same for survival.

first-mover advantage

Occurs when an organization can significantly impact its market share by being first to market with a competitive advantage.

loyalty program

Rewards customers based on their spending.

operating model

A detailed plan describing how a business delivers its value creation to its internal and external customers via its business processes.

Porter’s Five Forces Model

Analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry.

Porter’s three generic strategies

Generic business strategies that are neither organization nor industry specific and can be applied to any business, product, or service.

product differentiation

An advantage that occurs when a company develops unique differences in its products with the intent to influence demand.

rivalry among existing competitors

High when competition is fierce in a market and low when competition is more complacent.

stakeholder

A person or group that has an interest or concern in an organization.

supplier power

The suppliers’ ability to influence the prices they charge for supplies (including materials, labor, and services).

supply chain

Consists of all parties involved, directly or indirectly, in the procurement of a product or raw material.

switching cost

The costs that can make customers reluctant to switch to another product or service.

SWOT analysis

Evaluates an organization’s strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies.

threat of new entrants

High when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market.

threat of substitute products or services

High when there are many alternatives to a product or service and low when there are few alternatives from which to choose.