Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ThePerMBA > Chapter 1 - Value Creation > Flashcards

Chapter 1 - Value Creation Flashcards

0
Q

What are the 5 Parts of Any Business?

A

A business is a repeatable process that…..

  1. Creates something of value to its customers
  2. That other people want or need
  3. At a price they are willing to pay
  4. In a way that satisfies the customers need and
    expectations
  5. So that the business brings in enough profit so
    that it makes sense for businesses to continue
    operations
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

What are the different way businesses can provide value to customers?

A

A business can survive by providing….

  1. A little value to many
  2. Or a lot of value only to a few people
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What happens if you take any one of the 5 components of business away?

A

You are left with something other than a business. Such as a hobby or a charity etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

A venture that doesn’t create value for others is a…..

A

Hobby

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

A venture that doesn’t attract attention is a….

A

Flop

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

A venture that doesn’t sell the value it creates is a….

A

Not for profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

A venture that doesn’t create provide the value it promises is a….

A

Scam

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

A venture that doesn’t bring in enough money to continue operating will…..

A

Close

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

At its core a business has 5 interdependent processes, what are they?

A
  1. Value creation - discovering what people need or
    want and then creating it.
  2. Marketing - attracting attention and building
    demand for what you have created.
  3. Sales - turning prospective customers into paying
    customers
  4. Value delivery - giving your customers what you
    have promised
  5. Finance - making enough money to keep going
    and make you effort worth while

Business is not rocket science these principles are simple.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the best place to start for any business?

A

With the 5 processes of a business. How will you new venture address these 5 factors of business?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What was Segway’s Original sales Projections and what where they in reality?

A

50,000 units a year

Actually

After 5 years they had sold $22,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the issue with the Segway?

A

Technology was very complex and innovative but it boiled down to people did not want to pay $5000 for a goof looking alternative to walking or riding a bike.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

The Nee Business Road Test by John Mullens shows you what?

A

How to identify promising markets from the outset and increase the probability of success from the start.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are core human drives?

A

.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is Maslow’s Hierarchy of Needs?

A

1943

People progress through 5 stages as they decide on what they want or need.

  1. Physiology
  2. Safety
  3. Belongingness
  4. Esteem
  5. Self Actualization.

Each lower level must be met before a person can focus on each higher level needs.

I.E. If you do not have enough food to eat it is unlikely you are wasting to much energy on how much people like you or how much personal grow you experience.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Clayton Alderford’s version of Maslow’s hierarchy called and how does it differ?

A

ERG Theory of needs

Existence
Relatedness
Growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the Harvard Business School professors book “Driven” about and what does it say?

A

4 Core Human Drive

  1. Drive to Acquire - material, status, money
  2. Drive to Bond - to feel love or romantic valuable
  3. Drive to Learn - Drive to satisfy or
  4. Drive to Defend - martial arts, insurance, home
    security
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the on Human Drive that “Driven” had missed?

A

The drive to feel to experience new sensory experiences.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

At some level all businesses sell some combination of what?

A

Money, status, power, love, knowledge, protection and excitement. And the more of these drives your offering brings into play the more successful it will be.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How must you understand status in order to use it to your advantage in business?

A

People have evolved to be status seeking individuals. When given the opportunity individuals virtually always choose the option that gives them more status.

20
Q

What are 10 ways to evaluate a market?

A
  1. Urgency
  2. How many people are looking for this? Underwater
    basket weaving vs cancer treatment
  3. What is the highest price someone would be willing to
    pay for a solution?
  4. Cost of customers acquisition
  5. Cost of Value Delivery - Money and Effort
  6. Uniqueness of offer
  7. Speed to market
  8. Up Front Investment
  9. Up sell potential
  10. Evergreen Potential - Once you have built your offer how much additional effort do you have to put into it to continue sell?

Score of 50 or below move on 50-75 has potential to pay the bills but will not be a home run. Score of 75-100 full steam ahead.

21
Q

What are the hidden benefits of competition?

A

When any two markets are equal in other respects you are better off choosing to enter the one with competition. It means that there is someone there to sell to. It means you can spend more of your time developing your offer instead of proving a market exists.

22
Q

What is the best way to deal with competition?

A

Become a customer. Buy as much of competing products as you can and analyze what is missing. Observing you competition from the inside is the best way to see what is working and not working for them.

23
Q

What is the mercenary rule?

A

Never start a business just based on the money. You will just quit long before your business becomes successful.

24
Q

What are the 12 Standard Forms of Value?

A
  1. Product - single tangible item that you sell and
    produce
  2. Service - provide a service that meets a
    customers needs and then charge a fee for it
  3. Shared Resource - create a durable resource that
    can be used by others and then charge for access
  4. Subscription - create something of benefit and the
    charge an ongoing fee for access
  5. Resale - buy low sell high
  6. Lease - buy and asset and then let a customer use
    it for a predefined amount of time for a fee
  7. Agency - market and sell for third party
  8. Audience aggregation - advertising
  9. Loan
  10. Option
  11. Insurance
  12. Capital - ownership stake and collect profit
25
Q

What must you do to run a product oriented business?

A
  1. Create some sort of tangible item that people want.
  2. Produce that item as inexpensively as possible while
    maintaining an acceptable level of quality.
  3. Sell as many units as possible for as high a price as the market will bear.
  4. Have enough inventory of the product to fill orders as they come in.
26
Q

What forms do “products” come in?

A
  1. Durable
  2. Consumables
  • the value in products is that they can be duplicated and multiplies
27
Q

What is an example of a shared resource?

A

.

28
Q

What are examples of agency?

A

.

29
Q

What is an example of audience aggregation?

A

.

30
Q

What is an example of an option?

A

.

31
Q

What is an example of capital as it relates to a standard form pf value?

A

.

32
Q

What are the 3 thing you need to do to create a successful service business?

A

.

33
Q

What are the 3 things you need to do to create a shared resource and what are the important factors to be aware of when making a shared resource work?

A

.

34
Q

What are the 4 things you must do to create value via the subscription model of value?

A

.

35
Q

What are the 4 things you must do to create a successful reselling business?

A

.

36
Q

Who is Alain de Botton and what is his quote?

A

Social critic and philosopher. If one felt successful there would be so little incentive to be successful.

37
Q

What is a hassle premium?

A

.

38
Q

What do most offers do?

A
  1. Satisfy one or more of the core human drives
  2. Offer a clear and easy to visualize end result
  3. Offer the highest Hassle Premium by limiting the end
    user involvement as much as possible
  4. Provide status seeking symbols

Perceived value is a subjective matter. Focus on providing the most significant benefits with the highest status in a way that requires the least amount of end user effort and frustration and you will increase the value of your offer.

39
Q

What is modularity?

A

Offering value in multiple forms.

40
Q

What is bundling and unbundling?

A

Bundling occurs when you combine multiple small offers into one large offer. Unbundling is where you take one offer and divide it into multiple offers (MPS Albums to selling just songs).
- open the way to sales that otherwise would not have happened

41
Q

What are issues with being so secretive about new ideas?

A

Limits your learning opportunities. It is almost always better to get early feedback from customers.

42
Q

What is an iteration cycle?

A

A process for making anything better over time. Small improvements over time from your original idea or design.

43
Q

What are the 6 stages of the iteration cycle?

A
  1. Watch Whats happening. Whats working and whats not.
  2. Ideate What can you improve. What are your options?
  3. Guess. Based on what you ideas or so far which will
    improve your offer the most and have the most impact.
  4. Which Choose which idea you are going to use
  5. Act - Actually make the change
  6. Measure - measure results
44
Q

What is iteration velocity?

A

The faster you can make your changes or the faster your iteration cycle is the quicker you are going to be able to improve your offering.

  • iteration takes time and effort but it gives you valuable information on what you are offering to see if it will be viable
45
Q

What can you do to maximize the value of your feedback?

A
  1. Get feedback from real potential customers
  2. Ask open ended questions. Listen more then you talk.
  3. Steady yourself and keep calm (keep thick skin)
  4. Take what you hear with a grain of salt
  5. Give potential customers potential feedback
46
Q

What is shadow testing?

A

.

47
Q

Feb 6 Bookmark

A

.

ThePerMBA (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions