AP®︎ Business with Personal Finance: Unit 1 Flashcards

An organization or entity that produces and distributes products and may operate at any size, face-to-face, virtually, or both

A good is a tangible product, while a service is an activity or benefit provided to a customer

A customer purchases a good or service, while a consumer uses it and may or may not be the purchaser

A possible opening to provide a product addressing a customer problem, need, or want that customers will purchase

The condition in which a proposed good or service meaningfully addresses the selected customers' problem, need, or want

The worth or benefit of a product to customers

Value creation provides benefits by addressing customer problems, needs, or wants, while value capture occurs when the business charges more than the product costs to produce

Revenue is money received from sales, costs are the expenses incurred by the business, and profit is the amount by which revenue exceeds costs

Any physical or virtual space in which sellers interact with buyers

An exchange buyers and sellers choose because each expects to benefit

The price or narrow range of prices at which a product is commonly exchanged, emerging from repeated buyer-seller interactions

A business’s ability to outperform rivals in the same market, leading to increased market share and potentially increased profits

The portion of total sales in a defined market accounted for by one business, measured consistently by units, customers, or revenue

The amount and nature of rivalry in a market, shaped by the number of rivals and offerings, product differentiation, and rivals’ ability to offer similar products at lower prices

Making a product meaningfully distinct from rival offerings through features or benefits customers value

A standardized or largely interchangeable product for which buyers perceive little difference among qualified sellers

An advantage created by operating at lower costs than rivals, allowing a business to charge lower prices or earn more profit per sale

An obstacle that makes it difficult for a new business to compete effectively, such as intellectual property rights, regulations limiting rivals, limited access to suppliers, high startup costs, or scale-supported low prices

Intellectual property rights protect creations and inventions from unauthorized copying, and a patent grants an exclusive legal right to an invention for a limited period

A market without competition in which one business is the sole provider of a unique good or service

A business’s ability to obtain resources, operate legally, reach customers, and generate enough revenue relative to costs to continue over time

A framework for evaluating how political, economic, social, technological, environmental, and legal factors affect a particular market or business

Government policies and political dynamics that affect market activity, including trade policy, taxes, subsidies, mandates, bans, and political stability

Conditions in the broader economy that affect market activity, including economic stability, household income, inflation, unemployment, and interest rates

Trends in society and culture that affect consumers and market activity, including demographics, cultural norms, lifestyle trends, and population growth

Market features involving the availability and development of technology for production, distribution, communication, and other business activities

Natural and external environmental conditions affecting markets, including geography, climate, resources, disasters, waste management, and environmental perspectives

Specific binding laws, rules, and regulations that determine whether business activities are legal and what compliance costs they create

Define the business opportunity, identify relevant PESTEL facts, explain their causal effects, consider interactions and changes, and reach a business-specific conclusion

An individual who develops a new business and assumes its risks and potential rewards

Uncertainty that a product’s outcome will not justify the financial, physical, and human resources committed to bringing it to market

Potential benefits of entrepreneurship, including profit, independence, personal fulfillment, growth, and the opportunity to create value or social impact

Generating product ideas by observing, interviewing, and surveying customers, researching markets and technical possibilities, identifying market gaps, and experimenting to develop new capabilities

Identify and validate a customer problem, develop a solution, represent it as an MVP, gather feedback, and retain, revise, or reconsider the idea

Gathering evidence that a customer problem, need, or want exists, can be clearly defined, and is experienced by multiple potential customers

Developing possible solutions by generating many ideas, representing promising ideas visually, and building testable versions to gather feedback

The simplest version of a product idea containing only its core features and used to gather initial feedback from potential customers

Gathering feedback from potential customers on whether an MVP’s core solution appears to address the validated problem

Defining beliefs and principles that guide an individual’s or business’s actions and choices

Capabilities, skills, and expertise that help an individual or business perform effectively, outperform rivals, and achieve competitive advantage

A concise description of a business’s core values and long-term aspirations or desired future

A description of what a business does and how it will achieve its long-term goals

Specific outcomes a business seeks to achieve in support of its mission, vision, and long-term success

A business that seeks to generate profit while also achieving social objectives through its products, operations, or financial model

An organization that serves the public good rather than generating distributable profit for owners; any surplus must be reinvested in the organization

Money remaining after an organization pays its expenses, which a nonprofit reinvests in its mission rather than distributing to owners

Ethical behavior follows accepted moral principles and business values; unethical behavior violates them through conduct such as dishonesty, unfairness, misuse of resources, or avoidable harm

A formal statement that translates a business’s values into specific standards of expected workplace behavior

A choice in which a core value conflicts with another core value or with a business goal or practice

An individual or group with an interest in a business’s decisions and outcomes

An individual or group directly involved in a business’s operations, decisions, and outcomes, such as an owner, manager, or employee

An individual or group outside the business’s operations that has a vested interest in its decisions and outcomes, such as customers, government agencies, or community members

Identify the conflict, values, stakeholders, and options; compare each option’s benefits, costs, and effects on reputation and culture; then choose the greatest total benefit, least total harm, or best alignment with vision and goals

A business owned by one individual who controls decisions and profits, is personally liable for business debts, and typically has less access to funding than a corporation

A business owned by two or more partners who retain substantial control over decisions and profits, are personally liable for business debts, and typically have less access to funding than a corporation

A business whose owners retain substantial control over decisions and profits while the company, not the owners, is liable for business debts; it typically has less funding access than a corporation

A business owned by shareholders who elect a board of directors; the company controls profits and is liable for debts, while greater funding and growth capacity come with reduced direct owner control

The owners of a corporation, who elect its board of directors and hold its executive leaders accountable

The body elected by shareholders to oversee a corporation and its executive leadership

The owner of a sole proprietorship, with primary responsibility for all aspects of the business and often multiple roles such as CEO, marketer, product developer, financial manager, and operations manager

The owners of a partnership, who have primary responsibility for all aspects of the business and typically divide roles according to their strengths and interests

Groups that organize related business functions and develop expertise, improving efficiency, effectiveness, and the business’s ability to meet customer needs

Leaders responsible for the entire business’s vision, operations, strategy, and performance; in a corporation, they report to the board and shareholders

Contracting another business to perform a function, usually to increase efficiency, reduce costs, or obtain skills unavailable internally

The department that conducts market research, develops sales strategies, manages brands, and builds customer relationships to attract and retain customers

The department that innovates around new and existing goods, services, and processes to better meet customer needs and wants

The department that manages the technical process of manufacturing goods or developing services so products reach customers

The department that tracks expenditures and earnings and prepares financial statements to monitor the business’s financial health

The department that secures and manages funds and uses financial data to recommend strategies for improving business performance

The department that recruits, trains, and oversees the evaluation of employees so the business has a capable workforce

A production process relying heavily on skilled labor, craftsmanship, and attention to detail, often for customized or small-batch products

The use of technology, machinery, assembly lines, and standardized procedures to produce large quantities of goods

The customer priorities a business must satisfy and the rival prices, features, quality levels, and production capabilities it faces when selecting a production process

The connected individuals and businesses involved in acquiring inputs, producing a product, and delivering it to the final customer

A chain that moves raw materials and components through manufacturing, possible storage and distribution, and final delivery to customers

A chain that acquires the employees, resources, technology, and delivery systems needed to provide a service in person or virtually

The cost, quality, efficiency, and convenience of obtaining the required inputs from a supplier

The possibility that an event or condition will delay delivery, interrupt production, reduce quality, increase costs, or damage reputation

A supply chain strategy that emphasizes inexpensive inputs, efficient operations, limited waste, and reliable low-cost delivery

A supply chain strategy that prioritizes suppliers, inputs, processes, and delivery methods that consistently meet high performance and quality standards

Building higher-capacity or more efficient operations intended to produce an increase in revenue greater than the increase in costs

Agreements that prevent a supplier from selling a specified input to rivals or prevent a retailer or distributor from carrying rival products