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market
a group of people or organizations that may be interested in buying a given product or service, has the resources to purchase it, and is permited by law and regulation to do so
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business definition questions
- who will the business serve
- what will the busiiness offer customers
- how will the business provide the products or services it offers
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business definition
- the offer
- target market
- production and delivery compatibility
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four basic types of businesses
- manufacturing
- wholesale
- retail
- service
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manufacturing
making or producing a tangible product
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wholesale
buying in bulk from manufacturers and selling smaller quantities to retailers
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retail
selling individual items to consumers
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service
sells an intangible prodict to businesses or consumers
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core values
the fundemental ethcal and moral philosophy and beliefs that form the foundation of the organization and provide board guidance for all decision making
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mission statement
concise comunication of your purpose, business definition, and values
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vision
paints a broader perspective of what you want your organization to become in the future, not what it is at the moment
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culture
core values of the organization in action, defines work envirionment
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competitive advantage
strategy for beating the competition
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six factors of competitive advantage
- quality
- price
- location
- selection
- service
- speed/turnaround
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competitive advantage, a successful business needs:
- to sell to a market that is large and growing
- to sell to a market where the competition is able to make a profit
- no barriers to entry
- solve problems of competitions faults
- competitive prce
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barriers to entry
the factors that contribute to the ease or difficulty of a new competitor joining an established market
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to determine whether or not you have a competitive advantage
- competitive offers
- unique selling proposition
- cost structure
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unique selling proposition
the distinctive feature and benefit that sets a company apart from its competition
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competitive strategy
the combination of the business definition with its competitive advantage, must be sustainable
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tactics
the specific ways in which a business carries out it's strategy (the plan for out-performing the competition)
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gross profit
total sales revenue minus total costs of goods sold
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economics of one unit sale
the amount of gross profit that is earned on each unit of the product or service a business sells
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units of sale
the basic unit of the product or service sold by the business
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average gross profit per customer
average sale per customer - average cost of sale per customer
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cost of goods sold
the costof selling one additional unit of a tangible item
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cost of services sold
the cost of selling one additional unit of service; direct labour + cost of delivery of service
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total gross profit
total revenue - total cost of goods sold
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average unit of sale
total sales / number of customers
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currency
money that can be exchanged internationally
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foreign exchange rate
the relative value of one currency to another
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