Core concepts Flashcards
Define the following terms (308 cards)
1
Q
Entrepreneurship
A
The ability to initiate or design a new idea.
2
Q
Sole Trader
A
A company run by an individual e.g. plumber. Unlimited liability.
3
Q
Partnership
A
Form of business with 2 or more owners. May be limited or unlimited liability
4
Q
Joint Liability
A
Liability divided between 2 or more people
5
Q
Limited Liability
A
Creditors cannot take personal assets if company declares bankrupcy
6
Q
Unlimited Liability
A
All assets of the individual may be taken by creditors if the company cannot pay debts
7
Q
Risk Partitioning
A
Dividing a company into subsidiaries so that if one subsidiary collapses the whole can remain safe. They can also support each other if the subsidiaries has difficulties.
8
Q
Parent
A
Main part of company that spawns subsidiaries
9
Q
Subsidiary
A
Offshoot of parent company. May be specialised and produce different items.
10
Q
Separation of Ownership from Management
A
Where the owners of a company are not necessarily the managers e.g. public companies where shareholders are technically owners.
11
Q
Private company
A
An unlisted company
12
Q
Initial Public Offering
A
Aka IPO, the initial valuation of a company when it is ‘floated’ on the exchange.
13
Q
Franchising
A
When someone with a good idea sells the rights to use the business name and sell a product for a cut of profits.
14
Q
Vision
A
A goal for where you want the company to be in the future
15
Q
Mission
A
A statement which defines the existence of your company and what it stands for
16
Q
Management
A
The upper team that runs a company
17
Q
Planning
A
Essential for future success
18
Q
Leading
A
Guiding and motivating, giving assignments, feedback and criticism
19
Q
Organising
A
Allocating resources, preparing structures, recruiting and placement of employees
20
Q
Controlling
A
Measuring results against objectives, monitoring performance and rewarding/punishing performance
21
Q
Sustainable competitive advantage
A
Ability to outperform competitors in long run
22
Q
Strategy
A
Game plan: how to get from A to B. Identify weaknesses, specific, adapt to changing environment
23
Q
Rational Approach to Strategy
A
Follow the steps, rigid, flow model.
24
Q
Incremental approach to strategy
A
Do it all the time, constant change - how do you know if you’re doing the right thing though?
25
Resource based view
What resources we have that we can employ that others don't.
26
Valuable
Must have worth
27
Rare
Controlled by very few (hopefully us)
28
Inimitable
Cannot b readily imitated by competition
29
Non substitutable
Cannot be substituted by other products
30
Porter's 5 Forces
1. Threat of new entrants
2. Threat of substitutes
3. Consumer power
4. Supplier power
5. Intensity of competition
31
Competitive rivalry
Rivalry with competition
32
Bargaining power of suppliers
Suppliers have bargaining power because without supply company is unable to act.
33
Bargaining power of consumers
Consumers have sovereignty so they decide what gets produced and how much they wish to buy
34
Threat of new entrants
Entrants increase competition
35
Threat of substitute products
Substitutes reduce profits if people buy them instead of your product
36
SWOT analysis
Strengths
Weaknesses
Opportunities
Threats
37
Strengths
What we're good at
38
Weaknesses
Where we are vulnerable
39
Opportunities
What we can do in the future/now that can benefit us
40
Threats
What others can do to harm us
41
Core competencies
The basic things we're good at
42
Stakeholder theory
Stakeholders are people who have an invested interest in us - see power interest grid
43
Power interest grid
Charts importance of various people by comparing their level of power to their level of interests. Consumers have high power, high interest, government has low interest but high power
44
Means end diagram
How/How diagram - start with goal then keep asking how until you reach a solution
45
Porter's generic strategy
Cost or Differentiation
46
Cost leadership
Lead by offering lowest prices
47
Differentiation
Lead by providing a different product to everyone else
48
Focus
Focus
49
Contingency planning
What to do if things go wrong
50
Span of Control
Number of employees a manager can effectively supervise at any one time
51
Chain of Command
Reporting lines within an organisation
52
Board of Directors
Governing body of an organisation elected by shareholders
53
Centralisation
Head office has lots of power
54
Decentralisation
Power spread over a number of peopl
55
Departmentalisation
Power divided between departments
56
By function
By department as defined by what they do
57
By region
By department defined by geographical location
58
By prodict
Divide company by what product it provides
59
By geography
Divide by geographical location
60
Matrix Structure
Mix of leaders - problem of 2 bosses
61
Virtual organisation
An organisation that does not physically exist e.g. online
62
Organic growth
Natural expansion as the business grows by getting more customers
63
Non organic growth
Artificial expansion through mergers and acquisitions
64
Mergers
Merging with another entity - sharing everything
65
Acquisitions
Purchasing another company outright
66
Joint ventures
Collaboration together but still separate entities
67
Alliances
Working together to get the job done
68
Outsourcing
Getting a 3rd party to do a job that makes you more efficient
69
Synergy
Working together gets better results because of complementing skill sets.
70
Drivers of post acquisition performance
Compatibility, synergy, similar views and goals
71
Consumer goods marketing
Marketing consumer goods to customer
72
Industrial marketing
Marketing to an industry
73
Non profit and societal marketing
Appeal to society values and charity
74
Services marketing
Marketing of services
75
Customer satisfaction
How satisfied customers are
76
Direct marketing
Marketing straight to the consumer
77
Global marketing
Marketing globally
78
Digital Marketing
Use of digital media in marketing
79
Production orientation
Focus on production
80
Selling orientation
Focus on selling
81
Marketing
An activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large
82
Market
Set of all actual and potential buyers of a product
83
Human needs
Most basic concept underlying marketing - what a consumer wants
84
Societal orientation
_________________________________
85
Wants
Desires of an individual
86
Demands
What they want
87
Utility
Enjoyment
88
PEST analysis
```
Political
Economic
Sociocultural
Natural
Technology
```
89
Marketing stimuli
Something that stimulate consumers through marketing
90
Other stimuli
__________________________________
91
Buyer's black box
Buyer is a black box - cannot see what they want
What the buyer sees --> something happens inside (the buyer is the black box we can't see inside) --> they then do something
92
Buyer's response
How buyer responds to marketing
93
Consumer decision making process
1. Problem/need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post purchase behaviour
94
High involvement
Customer must get highly involved in purchase
95
Low involvement
Customer does not really get involved
96
Problem/need recognition
Recognising what the consumer wants
97
Information search
Researching product
98
Evaluation of alternatives
Compare research results
99
Product orientation
_______________________________
100
Marketing orientation
_________________________
101
Societal orientation
______________________
102
Purchase decision
Deciding what to purchase
103
Post purchase behaviour
How they react after buying the product
104
Factors influencing consumer behaviour
External - cultural or social
| Internal - personal and psychological
105
Cultural
How culture and upbringing effects purchasing decisions
106
Personal
How personal tastes and preferences effect purchases
107
Psychological
Other psychologic marketing tools such as pricing
108
Market segmentation
Dividing the market up by defining factors
109
Geographic segmentation
Divide based on geographic location/characteristics e.g. hot, cold, north, city, country
110
Social
Divide based on social influences e.g. trends and vogues
111
Demographic segmentation
Divide based on identifiable measurable characteristics of a population e.g. age, gender, family size, income, religion, occupation, education, generation
112
Psychographic segmentation
Divide based on social class, lifestyle or personal characteristics - 'lifestyle analysis'
113
Behavioural segmentation
Divides into segments based on consumer knowledge, attitudes, uses or responses to a product e.g. occasions, user status, loyalty
114
Hybrid segmentation
Combination of all
115
The 4 Ps
Product
Place
Price
Promotion
116
Product
What it is you are selling - total product model
117
Physical goods
Physical, tangible goods or services
118
Services
A benefit provided, not a good e.g. transport, education
119
Experiences
A type of product e.g. holiday, concert etc.
120
Events
A specific event
121
Person
Another type of product
122
Political
Another type of product
123
Cause related
Related to a cause e.g. charity
124
Not for Profit
Donations
125
Total product concept
Core, Actual, Augmented
126
Core product
What is the buyer realy buying e.g. food, a method of transport
127
Actual product
As many as 5 characteristics: quality level, features, styling, brand name, packaging
128
Augmented product
Added consumer services and benefits built around the core and actual product e.g. service
129
Product differentiation
How can we make our product different?
| Product, service, personnel, channel, strong brand image, first mover advantage
130
Consumer product classification
Convenience, shopping, specialty or unsought
131
Convenience products
Simple, frequent and minimal involvement e.g. water
132
Unsought products
Not wanted by consumers
133
Product line
Group of related products produced by a firm
134
Product mix
Entire product range offered by a firm
135
Downward stretch
Producing goods that fit lower price bracket
136
Line filling
Bridging gap between high and low cost items
137
Upward stretch
Expanding product range price upwards
138
Shopping products
less frequent, slightly more involvement and higher pries e.g. clothing
139
Brand
Distinctive brand
140
Brand attribute
What the brand confers to the item
141
Benefits
What positive gain does the consumer get
142
Values
Has to say something about the buyer's values
143
Brand personality
Projects its personality
144
Brand name
Name of brand
145
Brand mark
Mark of brand
146
Brand logo
Brand logo
147
Trademark
Distinctive symbology
148
Brand awareness
Trying to increase awareness about brand
149
Brand preference
Make people want to prefer this brand
150
Brand loyalty
Make people stick to this brand
151
Brand equity
Value of a brand based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations and other assets such as patents, trademarks and channel relationships
152
Types of brands
```
Manufacturer/national brands
Distributor/private brands
Generic brands
Co-branding
Licensing
```
153
Manufacturer/national brands
Brand owned by maker of product, intended to create loyalty toward products of a particular manufacturer
154
Distributor/private brands
Brand owned by retailers or other intermediaries
155
Generic brands
Carries neither manufacturer nor distributor brand 'no name'
156
Co branding
Use of two individual brands in a single product e.g. Telstra Visa card
157
Licensing
Legal agreement allowing an organisation to use the trademark of another organisation
158
New product
```
Varies:
New to world
New category
Product line extension
Product improvement
Repositioning
```
159
New to the world
Brand new invention not available in market before
160
New category
Existing product in market but NEW type of product to firm
161
Product line extension
Variety of existing product already offered by firm
162
Product improvement
'New and improved' existing product
163
Repositioning
Change of image, use or target market for existing product
164
New product development process
Through acquistion or through internal new-product development process
165
Idea generation
Come from sources such as internal, customers, competitors, distributors, others
166
Idea screening
Reduce number of ideas generated so scrap poor ones
167
Product analysis
Review of sales, costs and profit projections to find out whether they satisfy the company's objectives
168
Product development
Develop prototype to test. Requires large jump in investment
169
Concept testing
Taking a product idea to consumers to test their reactions
170
Commercialisation
Decision to launch full scale production & distribution
171
Product life cycle
Introduction --> Growth --> Maturity --> Decline
172
Introduction
Period of slow sales growth as people discover product
173
Growth
Period of rapid market acceptance and sales growth
174
Maturity
Slowdown in sales growth as product gains acceptance by most buyers
175
Decline
Drop in sales and profits as customer switch to new products
176
Price
Amount of money charged for a product or service, determines value
177
Pricing objectives
Simple survival, maximise profits (short term), grow market share, block competition, price/quality leadership (image)
178
Price elasticity
How much a change in price affects demand
179
Price elastic
Small change in price leads to large change in demand
180
Price inelastic
Big change in price leads to small change in demand
181
Market structure
Pure competition, monopolistic competition, oligopolistic competition, pure monopoly
182
Pure competition
What we wish could happen
183
Monopolistic competition
Lots of firms selling slightly different goods with a monopoly in each small segment
184
Oligopolistic competition
A few big forms controlling market
185
Pure monopoly
Just one big firm
186
Economies of scale
Decrease costs due to increase in efficiency
187
Experience (learning curve)
As they gain more experience they get better
188
Pricing strategies
Cost based
Demand based
Customer value based
Competition based
189
Cost based pricing
Setting prices based on costs for producing, selling and distributing plus a fair rate of return for efforts and risk
190
Break even analysis
Sell at breakeven point
191
Competition based pricing
Setting prices based on competitor's strategies, costs, prices and market offerings
192
Value based pricing
Setting price based on buyer's perceptions of value rather than on seller's cost
193
Market skimming
Price well above market to maximise profits - good for highly sought after products
194
Market penetration
Price well below market to maximise sales
195
Every day low pricing (EDLP)
Setting prices lower than competitors and then not having any special sales
196
Segmented pricing
Setting different prices for different clients, product forms, places or times
197
Psychological pricing
Pricing goods and services at price points that make the product appear less expensive than it is
198
Integrated marketing communications
AKA Promotional mix
199
Promotion mix elements
Advertising, Sales promotion, PR, Personal selling, blogging, direct/digital marketing, events
200
Advertising
Non personal communcation information persuasive in nature about products or ideas by an identified sponsor through various models
201
Sales promotions
Short term incentives of gifts or money that facilitate the movement of products from producer to end user
202
Trade promotions
Promotions through trade
203
Public relations
Activities that influence public opinion and create goodwill for organisation
204
Personal selling
Direct face to face interaction with potential buyers
205
Advertising objectives
Inform, persuade and remind
206
Crisis management
PR aimed at disseminating information during an emergency
207
Publicity
Generated through PR activities but not a strategy. e.g. news conferences/releases, appearances
208
Steps in the selling process
Prospecting, pre approach, approach, presentation, handling objections, closing, follow up
209
Place
Make product accessible to target market
210
Logistics network
Elements such as supplier, manufacturer, distributor and retailer
211
Supply chain
Suppliers manufacturers, packagers, distributors etc
212
Types of intermediaries
Wholesalers
Retailers
Brokers
Agents
213
Wholesalers
Buy products from manufacturer and resell it to retailers
214
Retailers
Buy product from wholesaler and then sell it directly to consumer
215
Brokers
Facilitate transactions between buyers and sellers
216
Agents
Manufacturing for purchasing agents depending on who they are working for
217
Intermediary utilties
```
Form
Time
Possession
Place
Information
Service
```
218
Form utility
Making raw materials into useful products
219
Time utility
Making products available when consumers need them
220
Place utility
Placing products where consumers want them
221
Possession utility
Doing whatever necessary to transfer ownership
222
Information utility
Adding value to products by opening two way flows of info between participants
223
Service utility
Adding value by providing service before and after sale
224
Channel choices
Manufacturer, wholesaler, retailer consumer
225
Wholesailing
Selling goods and services to those buying for resale or business use
226
Retailing
Selling goods straight to consumers for personal, non business use
227
Multi channel retailing
Woolworths - supermarkets, petrol stations etc.
228
Intensive channels
Focus on as many retailers as possible with product in stock
229
Selective
Focus on access to key retailers and good in store location
230
Exclusive
Focus on brand, good relationships with a few retailers
231
Retailer classification
Specialty store, department store, supermarket, discount store, convenience store, category killer, outlet store
232
Specialty store
Wide selection of goods in one category
233
Department store
Wide variety, full range of product lines and services
234
Supermarket
Wide variety of food and non food products, large departmentalised operation featuring self service, aisles and centralised checkouts
235
Discount store
Standardised merchandise at lower prices
236
Convenience store
Little variety, shallow selection, fast service, high turnover goods
237
Category killer
Sells a large variety of one type of product to dominate that category of goods
238
Outlet store
Sells general merchandise at a discount - may be discontinues or have flaws
239
The performance process
?
240
The motivation process
Needs, cognitive activities and rewards/reinfircements
241
Needs
Maslow's Hierarchy of needs, ERG, 2 factor theory, acquired needs
242
Cognitive activities
Expectancy theory, equity theory, goal setting theory
243
Rewards/reinforcement
Reinforcement theory, social learning theory
244
Behaviours
?
245
Maslow's hierachy of needs
Psychological needs, safety needs, belonging needs, esteem needs, self actualisation needs
246
Herzberg's theory
Hygiene and motivators
247
Hygiene factors
Help to prevent disatisfaction
248
Motivators
Help to promote satisfaction
249
ERG theory
Growth needs, relatedness needs, existence needs
250
McClelland's Needs theory
Need for achievement, need for power, need for affiliation
251
Cognitive theories
Expectancy, reinforcement, equity and goal setting
252
Expectancy theory
Effort expected outcome (physically able), performance expected outcome (successful)
253
Equity theory
Our efforts/awards vs. others efforts/awards
254
Reinforcement theory
Charts effect of behaviour against maturity
| Positive reinforcement, negative reinforcement, extinction and punishment
255
Social learning theory
Attention, retention, reproduction, motivation, new behaviour - self control drives behaviour
256
Job characteristics (enrichment model)
Ways to make workers more motivated:
| Core job characteristics (pay) --> critical psychological states (non monetary things e.g. meaningfulness) --> outcomes
257
Non normative approaches to decision making
Satisficing, regret, certainty, prospect theory
258
Satisficing
Select an alternative that will be satisfactory but not necessarily optimal
259
Regret
Select an option which you will regret the least
260
Certainty
People prefer certainty over uncertainty
261
Prospect theory
Evaluations are made in relation to a reference point
262
Cognitive bias
Flaws in our way of thinking
263
Heuristics
```
Gambler's fallacy
Anchoring and adjustment
Framing
Psychological accounting
Overconfidence
```
264
Gambler's fallacy
6 tails in a row will not guarntee 7th to be tail too
265
Anchoring and adjusting
People adjust perception of value to stated one
266
Framing
Wording of question using negative to promote action against e.g. death, killing
267
Psychological accounting
Failure to take into account sunk costs and so forth
268
Overconfidence
Increasing confidence does not necessarily lead to accurate predictions
269
Leadership
Guiding a group of individuals in the direction of a common desired goal
270
Legitimate power
Authority from virtue of position in hierarchy
271
Reward power
Power derived from ability to reward
272
Autocratic leadership
Dictatorship
273
Expert power
Power from special knowledge or skills
274
Referent power
Power from respect - best type
275
Information power
Power from ability to control info needed by others
276
Participative/Democratic leadership
Managers and employees work together to make decisions
277
Free rein leadership
Managers set objectives and employees are free to do whatever is appropriate to accomplish these objectives
278
Leadership grid
Balance between concern for production and concern for people
279
Fiedler's situational model of leadership
Relationship vs task - able,unable; willing, unwilling
280
Fiedler's contingency model of leadership
As performance worsens, more input required
281
Mindfulness
Non judgemental awareness of events, objects, emotions, perceptions, sensations
282
Servant leadership
Serve the people
283
Culture
Collective programming of the mind distinguishing the members of one group or category of people from others
284
Hofstede's dimensions of cultural values
```
Power distance
Individualism and collectivism
Masculinity and femininity
Uncertainty avoidance
Long and short term orientation
```
285
Power distance
Small - people working closely together, little distinction. Opposite is true.
286
Individualism and collectivism
Care about self vs. care about family and others in society
287
Masculinity and feminity
Masculine if clear division in roles, emphasis on material success and toughness. Women more tender than men
Feminine when roles overlap and both are meant to be tender.
288
Uncertaintty avoidance
Uncertainty is bad
289
Long and short term orientation
Spending vs. saving, luck vs effort being cause of success/failure
290
Proximity
How close effect to us is
291
Magnitude
How big the effect is (death vs theft)
292
Probability of effect
Likelihood of occurring
293
Temporal immediacy
How soon it will occur
294
Consensus
Other people agree or disagree with actions
295
Concentration
How many people are effected by the magnitude
296
High intensity
High concern of moral issue
297
Low intensity
Very minor moral issue
298
Idealist
Stick to ideals, beliefs
299
Relativist
Exceptions to the rule
300
Absolutist
Must always adhere to rule
301
Exceptionalist
Always exceptions to ethical rules
302
Situationalist
Largely agree with moral but depends on situation
303
Subjectivist
No universal moral code anything is permissible
304
Business Processes
```
System has:
Structure
Hierarchy
Inputs and outputs
Boundaries
Behaviour
```
305
Activity System
All business processes of the organistaion
306
Information system
Hardware and software; procedures and people; Data
307
Process Slalom
Cut across different levels of management and functions within a company.
308
Uses of business process management
_____________
