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PATTERN OF CAPACITY UTILIZATION - See Capacity Utilization. PERPETUITY METHOD - is one alternative method for estimating the value of a
business at the end of the forecast period. Using the perpetuity method, the
present value (at the end of the forecast period) is calculated by:
"Residual Value" = "Perpetuity Cash Flow" / "Cost
of Capital". [Source: A. Rappaport] PERSONNEL COSTS - includes salaries, benefits, and bonuses of full-time and
part-time employees, as well as agency fees and fees to consultants. PRESENT VALUE - refers to the discounting of future cash flows to
accurately reflect the time value of money. PRESENT VALUE OF BUSINESS - see Shareholder Value. PRE STRATEGY SHAREHOLDER VALUE - represents the value of the business today assuming no
additional value is created. PRICE ELASTICITY - a ratio of the percentage change in quantity demanded to
the percentage change in price. For example, assume an industry price war
reduces average industry prices by 10%. If the amount of products and
services purchased by the industry's buyers increases by more than 10%, then
the price elasticity of demand is greater than 1 and is price elastic. If
the amount of products and services purchased by the industry's buyers
increases by less than 10%, then the price elasticity of demand is less than
1 and is price inelastic. (If the amount of products and services purchased
by the industry's buyers increases by exactly 10%, then the price elasticity
of demand is equal to 1 and is unitary.) PRICE SENSITIVITY OF CUSTOMER - a determinant of the bargaining power of customers.
Customers who are not price sensitive tend to fall into one or more of the
following categories: the cost of the product is a minor part of the buyer's
budget; the penalty for product failure is low relative to its costs;
effectiveness of the product can not yield major savings or improvement in
performance; the buyer seeks a custom designed variety; the buyer is very
profitable and/or can readily pass on the cost of inputs; the buyer is
poorly informed about the product; the motivation of the actual decision
maker is not narrowly defined as the cost of inputs. PRIVACY - for personal records privacy - the OECD Privacy Guidelines (which underpin most current international agreements) are as follows:
Also, for privacy issues regarding: Wireless Location Information, Children, Medical, Financial, Profiling Intel Processor Serial Number, and Personally Identifiable Information, please see: http://www.cdt.org/privacy/ PROCESSING RISK - the risk of loss due to computer or other processing
error. PROCUREMENT - refers to the function of purchasing inputs used by the
business (and not to the purchased inputs themselves). [Source: M. Porter]
Sample procurement activities include: vendor record keeping; travel &
expense arrangements; obtaining temporary help and consultants; purchasing
supplies; purchasing legal and accounting services. PRODUCT - a product or service that provides customers with value
that can be purchased on a stand alone basis. PRODUCT DIFFERENCES - see Proprietary Product Differences. PRODUCT DIFFERENTIATION - means that established firms have brand identifications
and customer loyalties which stem from past advertising, customer service,
product differences, or simply being first in the industry. Product
differentiation creates a barrier to entry by forcing entrants to spend
heavily to overcome existing customer loyalties.
PRODUCT LINE - one or more highly related products or services which
address a particular customer transaction or business need. PRODUCT PLANS AND MAJOR PROGRAMS - a list of action plans with targets and time frames that
are measurable. The action plan summary should also include any assumptions
that are relevant to attaining the stated target by the stated time frame. PRODUCT VARIETIES - a key industry segmentation variable (the other variable
is buyer type). Sample product segmentation variables include: features;
technology or design; performance; bundled versus unbundled; new versus
replacement; product versus ancillary service. [Source: M. Porter] PRODUCTION ORIENTED DIVERSIFICATION STRATEGY - aims to produce similar products with shared production
value activities. Often procurement interrelationships stem from production
interrelationships. [Source: M. Porter] PROJECT MANAGEMENT METHODS - should be in synch with business objects and include common sense. The big picture is to define big projects into smaller manageable projects and successfully completing the smaller projects in an optimal fashion. Project management methods usually involve a certain number of steps revolving around: project definition and scope; project feasibility; project planning, project prototyping, system integrations, system testing, project launch, and post project system audit. Some named approaches include: Waterfall Development; Rational Unified Process; Extreme Programming; Seven Keys to Success; Project Management Maturity Model; Dynamic System Development Method). PROGRESS REPORT - a report which tracks prior action plans and their current status in order to evaluate the progress made to date, to learn from the past, and to improve forecasting methodology. PROPRIETARY PRODUCT DIFFERENCES - are product differences, real or perceived, which create layers of insulation against destructive pricing because customers have preferences for particular firms. [Source: M. Porter] On the other hand, when there are no proprietary product differences and the product or service is perceived as a commodity or near commodity, buyers will focus on price and service (and competition is usually volatile). PURCHASE CRITERIA - see Buyer Purchase Criteria. |
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