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BACKWARD INTEGRATION - when a customer becomes a competitor (by producing that which used to be a purchased input). [Source: M. Porter] BARGAINING POWER OF CUSTOMERS - refers to the relative strength of buyers to affect prices and to influence the amount of product features the firms in the industry must provide. [Source: M. Porter] BARGAINING POWER OF SUPPLIERS - refers to the relative strength of suppliers to affect the price of the inputs they provide. The greater the bargaining power of suppliers the higher the prices of inputs are likely to be and the more of the industry's profit will be bargained away. The more suppliers there are and the more alike their product or service, the less bargaining power they will have. [Source: M. Porter] BARRIERS TO ENTRY - make it difficult for a firm to enter the industry. Examples of barriers to entry include: economies of scale; proprietary product differences; brand identity; switching costs; capital requirements; access to distribution channels; cost advantages independent of scale; government policy; and expected retaliation. [Source: M. Porter] (Also see Threat of New Entrants.) BENCHMARKING - the process of analyzing and evaluating how other companies perform an activity or process in order to compare and learn from their experience. BRAND IDENTITY - a trademark or distinctive name identifying a product or company. Superior brand identity can help to both attract new customers and keep current customers (making it more difficult for existing competitors or potential entrants to gain market share). BUNDLING - selling distinct but complementary products together only, as a bundle, with a single price. [Source: M. Porter] BUSINESS INTERRUPTION RISK - refers to loss of fixed costs and profits resulting from damage that affects normal business operations. BUSINESS MISSION - A statement clarifying the purpose of the business. For example, a mission statement might include the words: "To provide... ...customers with... ...products that are... ...in order to..." BUSINESS OBJECTIVES - a listing of what the business plans to achieve. Objectives may be in terms of revenue goals, profit goals, shareholder value targets, market share position, cross-selling goals, image enhancement, or anything else. But the business objectives should represent the framework necessary to judge the achievements of the business. BUSINESS RECOVERY PLAN - includes information and procedures relating to continuing the operations of the business due to any business interruption. Computer recovery and information recovery are both major subsets of business recovery planning. BUSINESS RISK - is the uncertainty inherent in business operations and may be measured by the variability of cash flows. (Compare with financial risk.) BUSINESS UNIT - A very general term that means many things to many people. (Compare with: Strategic Business Unit.) BUSINESS UNIT STRATEGIC PLANNING - See Strategic Business Unit Planning. BUSINESS VISION - a building process which has as its foundation the company's mission statement, future industry trends, and an understanding of the organizational culture. BUYER INFORMATION - refers to whether the buyer has information about demand, actual market prices, and other information which usually will give the buyer greater bargaining leverage than when information is poor. [Source: M. Porter] BUYER PURCHASE CRITERIA - refers to what the buyer (specifically, the decision maker) values (measures) before making a purchase. See Signaling Criteria and Use Criteria. [Source: M. Porter] BUYER SEGMENT - refers to a strategically relevant buyer type based upon differences in buyer needs and the cost of producing, marketing, distributing, and servicing different buyers. Sample buyer segmentation variables which often help identify corporate buyer types include: buyer's industry; buyer's technological sophistication; buyer's strategy; buyer's purchasing process; buyer's size or financial strength; ownership; vertical integration; type of channel; buyer's location. Sample buyer segmentation variables which often help identify consumer buyer types include: age; sex; nationality; language; marital status; family composition; wealth; income; profession; decision-making unit; occasion; lifestyle; self-image; values; technological sophistication; geographic location; channel. [Source: M. Porter] BUYER TYPE - encompasses such things as the buyer's size, industry, strategy, and demographics; the types of end buyers that purchase, or could purchase, the industry's products. A variable used to define strategically relevant buyer segments (the others are channel and geographic buyer location). [Source: M. Porter] |
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