AP Business Section 1.3--1.4 Vocabulary

PESTEL analysis

A tool for assessing the business environment based on political, economic, social, technological, environmental, and legal factors.

Subsidy

Financial assistance— such as cash payments, tax breaks, or low-interest loans— that a government provides to promote business activity.

Mandate

An order from a government to perform an action, such as providing nutrition labels.

Viable

Able to succeed in a specific market or situation.

Entrepreneur

Someone who creates a business by initiating the activities, organizing the inputs, and assuming many of the risks of running the business.

Opportunity

A set of circumstances favorable for the creation of value by offering a new or modified good or service.

Market research

The process of observing, surveying, or interviewing customers, analyzing trends, or studying competitors in order to identify unmet needs.

Technical research

The application of scientific and engineering principles to investigate new products or the improvement of existing ones.

Design thinking

A problem-solving process with five stages: (1) Empathise with the target audience; (2) define the problem; (3) ideate about solutions; (4) create a prototype; (5) test the product.

Prototype

A preliminary depiction or model of a product that is created to explore and validate ideas.

Minimum viable product (MVP)

The simplest version of a product that serves its intended purpose and allows for customer feedback.

Brainstorming

The technique of encouraging participants to think freely and propose ideas without fear of criticism.