Business Foundations Exam 2

Business Model

How a company creates, delivers, and captures value

Customer Value Proposition (CVP)

The specific value a product or service provides to a customer segment

Strategy

The plan of action designed to achieve a long term or overall aim

Cost leadership

being the cheapest in a broad market (Walmart)

Differentiaion

being unique/premium in a broad market (Apple)

Cost Focus

Being the cheapest in a narrow / niche market

Differentiation Focus

being the most unique in a narow/niche market

PESTLE

used to identify driving forces (Political, Economic, Social, Technological, Legal, Environmental) ex: high unemployment is an economic factor

Scenario Planning

Uses PESTLE data to develop contingency plans for the future

VRIO Framework

if a company’s resources are Valuable, Rare, Inimitable (hard to copy), and Organized, they have a sustained competitive advantage

Competitive Profile Matrix (CPM)

A tool to compare a company against its competitors using “critical success factors”

The Marketing Mix

Product: The actual good or service

Price: the cost strategy

Place: Distribution

Promotion: Advertising, PR, Social Media

Distribution Strategies

Intensive: everywhere

Selective: Specific retailers

Exclusive: Only one or two outlets

The buying process and adoption

Stages: Need recognition - information search - evaluation - decision - post purchase evaluation

Buyers Dissonance

Also known as buyers remorse or regret after a purchase

Technology Adoption Life Cycle

Innovators - early adopters - early majority - late majority - laggards

Delegation

passing authority to others. You can delegate authority and responsibility but the final accountability often remains with the manager

Span control

the number of people a manager supervises

Vertical Structure

narrow span (tall hierarchy)

Horizontal Structure

broad span (flat hierarchy)

Centralization

top down decision making

Decentralization

shared decision making

Competing Values Framework

Flexibility Vs Stability and Internal vs External

Clan

Internal focus, flexible (like a family)

Adhocracy

External focus, flexible (innovative / entrepreneurial)

Market

External focus, stable (competitive / results oriented)

Hierarchy

Internal focus, stable (structure / controlled)