AP Business 1.1 & 1.4

organization

a structured group of people formed to achieve common goals.

business

an organization that produces or purchases goods or services and then sells them; most businesses seek profit by selling their products for more than the cost of obtaining them.

customer

the buyer of a good or service.

consumer

the user of a good or service

problem-solution fit

the match between a business’s product and the problems of intended customers.

value

the worth assigned to a good or service based on its perceived fits with customers’ needs and wants; businesses created value by offering products that solve customers’ problems or satisfy their interests.

value creation

occurs when a business offers a product that solves customers’ problems or satisfies their needs and wants.

value capture

occurs when a business can charge customers a price that exceeds the cost of providing the product.

revenue

the money received in exchange for goods or services.

profit

revenue minus the cost of making the product and operating the business.

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 consumers, analyzing trends, or studying competitors in order to identify unmet needs.

technical research

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

design thinking

a problem-solving process with 5 stages: (1) empathize with the target audience by learning about potential customers; (2) define the problem; (3) ideate about solutions; (4) create a prototype to represent the product idea; and (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 w/o fear of criticism.

find pathway

individuals identify product ideas by observing or experiencing unmet needs.

search pathway

an entrepreneur actively seeks ideas, using different kinds of research to identify needs.

effectuate pathway

apply their existing skills and knowledge to solve a problem.

ideate pathway

come up with ideas through brainstorming and experimenting. (serves needs we were not even aware of ex. the creation of the iphone)

low-fidelity prototype

a rough, simple representation of the product, such as a sketch, or wireframe.

high-fidelity prototype

more closely resembles the final product, and might be a 3D printed model or an interactive version of an app.

empathize

this is an information-gathering stage of surveying, interviewing, observing and gathering insights to gain a deep understanding of the needs and wants of the target audience.

define

the design team uses information collected in the empathize stage to clearly articulate the primary problem to be addressed. It is common to frame the problem with “How might we…” and questions, such as “How might we help reduce food waste in high school cafeterias? or “How might we provide better entertainment on school buses?

Ideate

Brainstorming generates a broad range of possible solutions. Then the ideas are narrowed and refined to land on a starting point for product development.

prototype

a simple representation of the product idea provides opportunities for experimentation and refinement by the design team. It can be:

- a sketch or diagram

- digital representation

- video portrayal

- model made with 3D printer or out of cardboard or clay

- miniature version

- working model

test

at this stage, early versions of the product are shared with potential users for validation and feedback. Initial rounds of testing might be conducted with simple prototypes, while later rounds use functional versions called minimum viable products. The ____ can reveal which elements of the idea are useful, popular, problematic, or in need of polishing.