Business Dictionary

Acquisition

The process of strengthening a business by acquiring another business (such as a competitor or supplier).

Anchoring bias

The tendency to use an initial piece of information as the basis for making later judgments.

Availability heuristic

Relying on easily available information, rather than investigating more deeply.

BATNA

Best Alternative To a Negotiated Agreement. BATNAs are alternative options that you can pursue if the negotiation does not meet your expectations.

Balance Sheet

A financial statement relating to the value and type of assets your business owns and controls. It shows how all your business’s finances (including investments, debts, and sales) are connected at a particular moment in time – typically annually.

Behavioral interviewing

A technique of interviewing which seeks to identify a candidate’s likely future performance. Questions are asked that elicit information on past performance, rather than on hypothetical or predictive outcomes.

Behavioral segmentation

The grouping of potential customers based on their actions.

Blue Sky ideas

Progressive and forward-looking ideas. They offer an innovative and novel approach to customer pain points or a progressive move in a sector.

Brand advocacy

Public support and recommendation for your brand.

Brand associations

Links that develop in a customer's mind between your brand and certain qualities or characteristics.

Brand awareness

The degree that customers are familiar with your particular brand and its qualities or characteristics.

Brand consideration

The process of evaluating your brand and deciding the extent to which it meets a customer's needs.

Brand differentiation

The degree to which your brand stands out from the competition.

Brand loyalty

The likelihood of a customer making repeat purchases of your product or service.

Brand parity

The degree to which your brand offering is similar to those of competitors in terms of quality and features.

Brand position

How your brand is viewed in comparison to competitors (for example, as a premium or mass market offering).

Brand preference

The degree to which a customer prefers one brand over others.

Bundle pricing

A pricing strategy which encourages customers to purchase more products or services than they would otherwise consider. This involves providing a discount when a set number of items are purchased at the same time.

Business Growth Plan (BGP)

A detailed, formal plan of an intended growth opportunity.

Capital

Wealth or other assets owned by an individual or an organization.

Cash Flow Forecast

A month-by-month projection of money coming in and out of your business.

Cash flow cycle

The movement of cash through your business, i.e. going out to suppliers, and being used to purchase or produce inventory, before returning from customers.

Competitive advantage

The unique value that your business can offer customers over its competitors.

Competitive mapping

Gathering information about competitors, including their market share and what differentiates them in the eyes of customers.

Confirmation bias

The tendency to only seek information that supports pre-existing beliefs or assumptions.

Core values

These describe what is most important to you, and the traits you respect in others.

Cost advantage

Delivering the same benefits as competitors, but at a lower cost.

Cost-plus pricing

A pricing strategy which defines a price by calculating the costs of making the product or delivering the service. It adds a set mark-up to generate a profit.

Cultural Audit

An investigation into the current values, assumptions, and practices that make up the culture of your business today.

Customer Buying Process (CBP)

The decision-making process that customers take before purchasing a product or service.

Customer Segmentation

Grouping customers in different ways based on key shared characteristics.

Customer Value Proposition (CVP)

A detailed statement which defines exactly who needs a product or service, and exactly how it meets those needs.

Customer pain point

A customer need or demand which a new product or service will meet.

Customer-centric

Products or services focused on meeting customer pain points and responding to their needs.

Customized pricing

A pricing strategy which involves individual price agreements with customers based on their exact needs and context.

Debt funding

A funding approach where a business takes out a loan, either from a bank or any other financial institution. The debt needs to be repaid at a future date, usually with interest.

Decentralize

Moving departments or functions of a business away from a single control point to multiple control points.

Developmental coaching

A method of coaching that aims to support the growth of the whole person, rather than the attainment of a skill or competence in isolation.

Diagnostic

An interactive exercise that provides a ‘diagnosis’ and personalized feedback based on responses to the questions or activities set.

Differentiation advantage

Delivering benefits that are better or more appealing than those offered by competitors.

Digital analytics

The analysis of digital data, and the information resulting from the analysis of digital data.

Driver

A factor which facilitates something happening (for example, motivational drivers shape a business vision).

Emotional value

The value a product or service can offer by meeting a customer's emotional needs.

Episodic growth

Business growth that is unpredictable and fluctuating.

Equity funding

A funding approach where equity investors get ownership or equity in the business and get a share of the earnings of the business every year. This is calculated in proportion to the amount they have invested.

Feasibility checklist

A document assessing the viability of a proposed new business concept.

Financial profile

The information that can be gathered about your business’s finances by others.

Financial ratios

A comparison of how two or more financial measures have moved relative to one another. This comparison is generally more useful than individual numbers when assessing financial performance. Different ratios are used to analyze different elements of your business. For further detail of these ratios, refer to the Financial Terms Glossary in the finance courses.

Focus advantage

Gathering an in-depth understanding of target customers, and producing specific offerings for this niche market.

Freemium pricing

A pricing strategy which allows a potential customer to use a product or service for free, but charges a premium for additional features or services.

Functional value

The ways in which a product or service can make a customer's life easier (for example, through reduced cost). Also known as commercial value.

Grounded ideas

Safe and incremental ideas, the logical next step in growth.

Growth factor

A fact or circumstance that contributes to business growth.

Growth-oriented

Focused on the intention to significantly grow and develop a business.

Income Statement

A financial statement focused on revenues and costs over a chosen period of time. Also known as the Profit and Loss Statement, and Statement of Revenue and Expense.

Incremental growth

Periods of rapid growth followed by periods of plateau.

Internationalization

A business increasingly operating across national boundaries.

Lag measure

Indicates the outcome or output of a process or activity. These are sometimes called outcome measures.

Lead measure

Indicates how closely a planned process has been followed. These are sometimes called activity measures.

Leadership style

The manner and approach used in providing strategic direction, motivation, and decision-making within a business.

Leads

Potential customers who may be interested in buying your product or service.

Life-changing value

Value that connects to a customer's long-term goals, or increases their motivation.

Logistics

The detailed organization and implementation of a business and its actions.

MSRP

The Manufacturer’s Suggested Retail Price.

Market

A demand for a particular product or service.

Necessary Non-Value-Added Steps

Steps that are crucial to the process, but do not add value for customers.

Netiquette

Rules on how to effectively and respectfully communicate and behave online.

Niche market

A small, specialized market for a specific product or service.

No-limits approach

An approach which deliberately ignores conventional restrictions to enable innovative thinking.

Non-Value-Added Steps

Steps that drain business resources and time, while providing no value to the product or service.

Operations

Activities involved in the day-to-day functions of a business conducted for the purpose of generating profits.

Operations Audit

A communication of the strengths of operational processes, both to external stakeholders and to team members.

Opportunity Feasibility Checklist

An exercise which will help you assess the feasibility of a growth opportunity for your business.

Opportunity Feasibility Summary

A summary of your Opportunity Feasibility Checklist.

Opportunity Statement

A clear and concise expression of a new business opportunity, which covers how the opportunity meets key criteria for success.

Organizational Audit

A means of identifying processes and sub-systems that could be introduced to change your culture and performance, and grow your business.

Personal Development Plan

A plan of personal development activities (for example, training/mentoring), that a business leader intends to complete in a defined period of time.

Plateau

A period of zero or very limited growth.

Portfolio pricing

A pricing strategy which involves looking at your offering as a whole, pricing some items low to attract customers and generating greater profits on other items.

Process map

A visual representation of a process, which details every component step. It also includes any smaller processes (or sub-processes) that form part of a larger overall process.

Prospects

Potential customers who are very likely to buy your product or service.

Purchase criteria

Criteria that come from any stage of the Customer Buying Process to influence a customer’s decision-making process. This includes factors such as quality, price, and convenience of delivery.

Rapid growth

A steep and consistent rise in turnover over a short period of time.

Reference-based pricing

A pricing strategy which uses the standard market pricing for a product or service as a reference for defining a price.

Resilience

The ability to withstand or recover quickly from difficult conditions.

Sales Funnel

A visualization of the conversion process from leads to prospects, and prospects to customers.

Sector

A large group of the economy (for example, the financial sector).

Social value

The value a product or service can offer related to the local or global community (for example, by having a positive impact on sustainability and diversity).

Spaced Out ideas

Ideas that are significantly more ambitious than Grounded or Blue Sky ideas. They are larger in scale, but are not necessarily achievable in the short term.

Stakeholders

People with an interest or concern in the business.

Status quo

The existing state or condition (for example, how things are normally approached or achieved).

Sustainable growth

Growth which can be sufficiently maintained in the long term. A limit to resources, customers, or funding may make growth unsustainable.

Turnover

The amount of money generated by a business during a particular period (for example, a financial quarter or a calendar year).

Value-added steps

Steps that enhance a product or service by meeting customers’ needs.

Value-based pricing

A pricing strategy that uses the perceived value target customers place on a product or service (in comparison to a competitor’s offering) to define a price.

Variable pricing

A pricing strategy where prices for products or services are changed based on a range of different factors (for example, peak and off-peak air fares).

Vision Statement

An efficient, effective and compelling expression of aspirations for your business, and how employees fit that picture.

XaaS pricing

A business offering something (X) as a Service.

ZOPA

Zone of Possible Agreement. The conceptual range of agreement between two negotiators' preferred outcomes.