Ap Business Vocab

Business

An organization that produces and distributes goods or services

Customer

Individual or business that purchase goods or services

Consumer

individual who actually uses the product (may not be the buyer)

Value

Worth/benefit of a product to customers

Value creation

businesses provide that fulfills customers needs/wants

Value capture

businesses ability to charge more then the production cost

entrepreneur

Person who creates a new business and takes on risks and benefits

Design Thinking process

1) find an issue

2) develop a solution

3) validate the solution by gathering feedback

MVP(Minimum viable product): Simplest version of the idea

Problems

Something that cause an issue or inconvenience

Needs

Essential or functional things customers rely on

Wants

Desires that make life easier or joyful

Market Opportunity

An unsatisfied or newly emerging customer problem, need, or want

Problem solution fit

Does your product actually solve the problem

commodity

a product that is similar to other products

commodity markets

buyers mainly focus on the price; sellers have little control over pricing and profit tend to be lower

Market

space where buyers and sellers come together to trade goods

differentiated markets

products that stand out in a meaningful way; sellers have more pricing power

competitive advantage/ for agricultural products and commodities/ for differentiated products

ability to out perform your competitor/

highly competitive produce efficiently for low prices/

develop high quality products with unique features

Barrier to entry

stopping competition by making it difficult for new rivals to enter the market

Monopoly

No competition; own 100% of the market

PESTEL FRAMEWORK

strategic tool to analyze factors that are out of your control

Political

trade policy, taxes

Economic

Level of household income, unemployment, interest rates

Social

consumer demographics, cultural norms, lifestyle trends

Technological

Internet access, rate of technological innovation

Environmental

geography, natural disasters, access to resources

Legal

employment laws, health and safety laws