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ap business unit 1
| Term | Definition |
|---|---|
| organization | An ___________ is an entity formed to work toward a common goal. |
| business | A ___________ is an organization regularly engaged in the production or purchase and distribution of goods or services. |
| customer | A ___________ is the buyer of a good or service. |
| consumer | A ___________ is the user of a good or service. |
| problem-solution fit | A successful business seeks ___________, which is a close match between its product and the problems of intended customers. |
| value | The ___________ of a product is the worth customers assign to it based on how well it serves their needs and wants. |
| 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 | When a customer pays the price for the product, the money received in exchange for the product is called ___________, as shown by the striped segment of the bar. |
| profit | That value is called ___________, which is the revenue received minus the cost of making the product and operating the business. |
| market | The ___________ for a good or service is made up of buyers and sellers interacting either in person or virtually. |
| market price | That ___________ becomes the prevailing __________ charged by firms throughout the market. |
| monopoly | A ___________ is a market with only one firm. |
| rival businesses | A firm seeking profit should consider strategies for outperforming ___________, which are other businesses competing in the same market. |
| competitive advantage | ___________, or a firm’s position of superiority over competitors, makes that possible. |
| product differentiation | A narrow focus on one segment of the market, ___________ to make the product unique in some way, and superior marketing. |
| barriers to entry | Competitive advantage can be sustained by ___________, which are obstacles that deter new competitors from entering the market. |
| intellectual property rights | As an example, the government can encourage innovation with ___________, which are legal rights granted to protect creations of the mind. |
| PESTEL analysis | ___________ is a tool for assessing the business environment based on factors that are political, economic, social, technological, environmental, and legal. |
| subsidy | Some governments promote business activity with ___________, which provide financial assistance in the form of cash payments, tax breaks, low-interest loans, or other financial benefits. |
| mandate | ___________ are authoritative orders to perform an action, such as government mandates that require food manufacturers to disclose product information on nutrition labels. |
| viable | In some cases, the analysis shows whether a specific type of business is ___________, meaning that it has the ability to succeed in that situation. |
| entrepreneur | Business ideas originate with an ___________, who creates a business by initiating the activities, organizing the inputs, and assuming many of the risks of running the business. |
| opportunity | An ___________ is a set of circumstances favorable for the creation of value by offering a new or modified good or service. |
| market research | Using ___________, an entrepreneur searches for unmet needs by observing, surveying, or interviewing consumers, analyzing trends, or studying competitors. |
| technical research | ___________ is the application of scientific and engineering principles to investigate new products or the improvement of existing ones. |
| design thinking | The ___________ process has five steps: (1) empathize with the target audience by learning about their needs and wants; (2) define the problem; (3) ideate about solutions; (4) create a prototype to represent the product idea; and (5) test the product. |
| prototype | A ___________ is a preliminary depiction or model of a product that is created to explore and validate ideas. |
| minimum viable product (MVP) | A ___________ is the simplest version of a product that serves its intended purpose and allows for customer feedback. |
| brainstorming | After a problem is identified, ___________ can encourage participants to think freely about solutions and propose ideas without fear of criticism. |
| core values | ___________ are the underlying principles and beliefs that guide your actions and those of your business. |
| core competencies | ___________ are the unique capabilities or strengths that give you—or your business—a competitive advantage. |
| vision statement | A ___________ provides a brief summary of an organization’s most important values and aspirations. |
| mission statement | A ___________ is a description of why the organization exists and what it does to achieve its long-term goals. |
| social enterprise | A ___________ is an organization that generates profit, but adopts commercial strategies primarily to achieve social objectives. |
| nonprofit organization | A ___________ does not generate profit for its owners and reinvests any surplus of revenue over cost back into its work to serve the public good. |
| business ethics | ___________ is the application of ethical standards to all aspects of a business, including hiring and manufacturing practices and the treatment of workers, suppliers, and customers. |
| incentive | An ___________ is anything that motivates or encourages a person to do something. |
| code of conduct | Businesses may also promote ethical behavior with a ___________ (a document that guides behavior by detailing the rules, expectations, and standards of conduct within an organization). |
| ethical dilemma | An ___________ arises when a choice must be made between two or more options, each of which is questionable from an ethical standpoint. |
| internal stakeholders | ___________ are people directly involved in the activities of the organization, such as employees, managers, owners, and members of the board of directors. |
| external stakeholders | ___________ are people outside of the organization who are affected by its activities, such as customers, suppliers, lenders, community members, and government agencies. |
| sole proprietorship | A ___________ is a business owned and controlled by one person. This is the simplest and most inexpensive legal structure to adopt. |
| partnership | A ___________ involves two or more people who share the ownership, management, and profits or losses of a business. |
| limited liability company (LLC) | A ___________ is a business structure that combines the relatively simple business structure of sole proprietorships and partnerships with the limited liability of a corporation. |
| corporation | A ___________ is owned by shareholders but is a legal entity apart from its owners. |
| organizational structure | An ___________ is a framework that defines the hierarchy, roles, and relationships of people and departments within an organization. |
| board of directors | At the top of a corporation is the ___________, a group of individuals elected by company shareholders to oversee the leadership and strategy of the organization. |
| chief executive officer (CEO) | Next in the hierarchy of command is the ___________, who is the highest-ranking executive in the company. |
| outsourcing | The business can use ___________, meaning that another business is hired to complete the work. |
| sales | ___________ refers to the activities that generate revenue by finding potential customers, engaging them, and converting them into buyers. |
| marketing | ___________ is the process of generating awareness of a company’s brand and helping people find value in the company’s products. |
| research and development department | The ___________ focuses on innovation by developing and improving goods and services to meet customers’ needs. |
| operations department | The ___________ oversees the production process and develops systems to deliver products to customers. |
| finance department | The ___________ is responsible for managing a business’s financial dealings. |
| accounting department | The ___________ keeps track of day-to-day transactions related to earnings, expenditures, assets (what the company owns), and liabilities (what the company owes). |
| human resources department | The ___________ focuses on putting people with the right skills, knowledge, and motivation in the right places to serve the needs of the business and its various departments. |
| artisan processes | ___________ involve skilled craftspeople who employ traditional, minimally mechanized production processes to make goods in limited quantities. |
| mass-production processes | ___________ involve manufacturing large quantities of a standardized good. The primary benefits of mass production are standardization, speed, volume, and low per-unit costs. |
| supply chain | A ___________ is a network of people, processes, and organizations that provide everything necessary for the creation and delivery of a good or service. |
| distributor | ___________ typically buy products from manufacturers and sell them to retail stores. |
| distribution centers | ___________ specialize in receiving items from manufacturers, suppliers, or storage facilities that are quickly sent to retailers or customers. |
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