Topic 1.1: What Is a Business?

Business

An organization or entity that produces and distributes products (goods and/or services)

Goods

Tangible products

Services

Intangible products, work done for the customer

Customer

The individual or business who purchases a product

Consumer

The individual who uses a product (may or may not be the buyer)

Problem, need, or want

A specific gap, requirement, or desire a customer has that a business can address together, these define a market opportunity

Market opportunity

An unsolved customer problem, need, or want that a business can serve

Problem-solution fit

When a business’s product successfully addresses a specific customer problem

Value

The worth or benefit a product gives the customer

Value creation

When a business provides a product that responds to a customer’s problem, need, or want

Value capture

When a business charges customers a price higher than the cost to produce the product

Any size

Businesses can be _______—measured by geographic reach, number of employees, or revenue

Virtually

Businesses can serve customers face-to-face or _______________

Everyone

Businesses cannot satisfy _____________. They must SELECT which problems and customers to focus on.

Focused

____________ businesses can deliver a better solution to a specific group

Selection

_____________ is the foundation of every other business decision (marketing, pricing, supply chain, etc)

Below the most they are willing to pay

Customers capture value when the price they pay is __________________