GLOSSARY FOR BUSINESS DEVELOPMENT CONTACT: growth@eibeconsulting.com eibeconsulting.com + 45 27 10 21 52 A MARKET ORIENTED PERSPECTIVE A ABSORPTIVE CAPACITY is a firm s capability to recognize the value of new, external information and to assimilate and apply it to a commercial end. that constrain decision-makers with respect to formulating and solving complex problems and in processing, that is receiving, storing, retrieving and transmitting, information. ADVERSE SELECTION occurs when one party or both may end up taking wrong decisions because of a party s (or one of its agents ) specific distortion of or the pervasive uncertainty about the future. BREAKEVEN ANALYSIS indicates the point when the operating revenues exceed the operating costs, which, in turn, also indicate how much cash or investments are needed to reach this point. AGENCY COSTS occur to the principal whenever an agent (such as an executive or employee) pursues objectives that are incongruent with those of the principal (such as owners). APPROPRIABILITY REGIME, or property rights environment, are the external factors, excluding firm resources and capabilities and industry structure, that govern an innovating firm s ability to capture the profits from its respective innovation. BREAKEVEN POINT is reached when you have sold enough widgets for the total revenues and total costs to be equal, that is, when the operating income is zero. BURN RATE refers to the speed at which a firm spends (or burns) working capital. BUSINESS DEVELOPER refers to a person characterized by being an integrating generalist who performs business development tasks and processes. B BALANCE SHEET refers to a financial report that shows the accounting value of all of the company s assets, liabilities and shareholder equity as of that date. BOARD OF DIRECTORS is elected by a firm s owners to oversee the strategic and daily management of the firm, has legal and factual powers over the business, but not necessarily interest in the business, and employs the CEO. BOOTSTRAPPING is the term given to finding creative ways to avoid the need for external financing through reducing the overall costs of the operation, improving cash flow or using financial sources within the business venture. BOUNDED RATIONALITY refers to the limits on decisionmakers of the information available, the finite time available to make decisions in and the cognitive limitations BUSINESS DEVELOPMENT PROCESS is made up of different sequential stages of work the business developer performs for a particular growth opportunity. BUSINESS DEVELOPMENT refers to the tasks and processes concerning the analytical preparation of potential growth opportunities and the support and monitoring of the implementation of growth opportunities, but it does not include decisions on strategy or the implementation of growth opportunities. BUSINESS IDEA refers to any concrete thought for the increase of turnover or cost reduction, or a combination of both. Whether the business idea is an actual opportunity depends on the business model and qualifying analyses in the business plan. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 01
BUSINESS MODEL refers to the set of interdependent activities that an organization performs with its key internal and relational resources and key tasks and processes in the pursuit of delivering superior customer value and appropriating value. BUSINESS ORIENTATIONS are a collective set of orientations that firms may display. BUSINESS PLAN is a formal statement consisting of a marketing plan, an organization plan and a finance plan, describing why, when and how the business developer intends to implement a strategic initiative or growth opportunity. C CAPABILITIES are a subset of resources that enable firms to fully exploit their remaining resources. CASH FLOW STATEMENT is an analysis of all activities during the accounting period that affect cash, affected primarily by operations, financing and investments. COMPETITIVE ADVANTAGE occurs when a firm implements a value-creating strategy not simultaneously being implemented by any current or potential competitors. COMPETITOR ORIENTATION one of the two main components of market orientation, this refers to the organizationwide generation and dissemination of competitor information as well as to the actions and responses taken based on this information. COMPETITORS are firms offering products or services that are close substitutes, in the sense that they serve the same customer need. COMPLEMENTOR refers to the phenomenon when one business venture sells products or services that add value (complements) to a product or service of another business s product or service by creating value to their mutual customers. CONCENTRATED INDUSTRY is one dominated by a few large firms that shape its direction. CAUSATION PROCESSES take a particular effect as given and focus on selecting between means to create that effect. CONSUMERS (may also be customers) are those purchasers of a good or service at the end of the value system. CEO (Chief Executive Officer) is appointed by the board and is in charge of the daily management of the firm and has legal and factual powers over the business, but not necessarily interest in the business. CIVIL LAW, or CIVIL CODE, is a legal system based on general legal principles and codes used in, for example, Scandinavian countries, Germany, France, Italy, Russia, China and Brazil. COMMITMENTS are the dynamics of strategy and arise from choice to commit specialized resources to a particular investment so that an organization s scope of future possibilities becomes curtailed. COMMON GENERALIST is a person capable of applying the necessary common general knowledge to sustain daily life but is not a specialist in any area or hasn t the capacity to integrate knowledge from specialist areas. CONTINGENCIES are constraints or events that are likely to occur and therefore must be planned for. COPYRIGHT is a property right that covers, for example, expressions in published and unpublished literary, scientific and artistic works, films and sound recordings. CORPORATE GOVERNANCE is a firm s top-level control structure, consisting of the decision rights possessed by the board of directors and the CEO, the procedures for changing them, the size and membership of the board and the compensation and equity holdings of managers and the board. COST DRIVER is any activity that affects total costs incurred in the delivery of superior customer value. COST-LEADER STRATEGY is based on creating a low-cost position in the industry relative to one s competitors. COMMON LAW, or CASE LAW, is a legal system that is based on the customary practices of the court and past judicial opinions and court decisions and is used in, for example, England, the Unites States, Australia, India, Hong Kong and Canada. CURRENT ASSETS are the liquid assets that either are cash or can be converted into cash or used to pay for liabilities within a period of 12 months. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 02
CUSTOMER ORIENTATION one of the two main components of market orientation, this refers to the organization-wide generation and dissemination of customer information as well as to the actions and responses taken based on this information. CUSTOMERS are they who pay our invoices. E ECONOMIC FACTORS of the macro environment concern the overall conditions of the economy of the market or markets in different countries. ECONOMIC VALUE is the difference between the cost of a product or service and the price that customers pay for it. D DATA refers to the facts relating to any issue or subject. DECISION-MAKING is the process of responding to a problem by searching for and selecting a solution or course of action that will create superior customer value and appropriate that value for a business s owners. DEMAND is customers needs and wants transformed into a (potential) willingness to purchase your product or service. DESIGN RIGHT is a property right which exists in an original design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article. DIFFERENTIATION refers to the way firms vary their product and associated services, their frontline employees and their choice and design of channel to convey a particular image or brand. DIFFERENTIATION STRATEGY is based on non-price features of the product or service that are of such importance to customers that they will pay a premium price. DILUTION OF SHARES refers to the diminishing percentage of ownership as a consequence of a new investment. EFFECTUATION PROCESSES refers to the processes that take a set of means as given and focus on selecting between possible effects that can be created with that set of means. ENTREPRENEUR refers to someone who takes the risk of profit or loss by combining the means of production in novels ways on the basis of their own businesses but, critically, an entrepreneur is not a profession, and as a rule, not a lasting condition. ENTREPRENEURIAL ORIENTATION refers to the strategy making processes, practices, decision-making activities and styles of organizations that engage in entrepreneurial activities and is conceptualized to comprise autonomy, product innovativeness, risk taking, proactiveness, and competitive aggressiveness. ENTREPRENEURSHIP focuses on the identification and exploitation of previously unexploited opportunities as well as on novelty in the form of new products, new processes and new markets as the drivers of wealth creation. EQUITY is the residual claim of the owner s when all the obligations of the firm have been paid and is composed of the issued capital, or share capital, plus the changes in the retained earnings. DIRECT COSTS refer to costs that are related to a particular cost object and that can be traced directly. DIVERSIFICATION is about engaging in business activities outside one s value system. DOMINANT BUSINESS ORIENTATION is the business orientation that has, de facto, the most influence on the firm s activities. DUE DILIGENCE is the process in which experts assess the actual validity of the content of a business plan and the credibility and honesty of the people behind the business opportunity. ENVIRONMENTAL FACTORS of the macro environment address how the general environmental awareness and climatic change may influence opportunities for and threats to your business. EX-ANTE LIMITS TO COMPETITION refer to the idea that the critical resource is acquired by a price below its true economic value. EX-POST LIMITS TO COMPETITION means that the economic value (or rents) of a particular resource cannot be competed away. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 03
EXTRINSIC HYGIENE FACTORS refer to areas of job dissatisfaction, such as supervision, interpersonal relations, physical and psychological working conditions, salary, benefits, job security, status, etc. EXTRINSIC REWARDS are means of motivation, such as cash, bonuses based on individual, group or company performance, stock options, partnership, company car, computer, etc. or social praise. F FAILURE TRAP refers to a cascade of failures that usually prompt the search for a new solution that may work better, but that also fails, and so on. FINANCE PLAN (of a business plan) explains how we finance our operations and appropriate the value we generate. FIXED ASSETS, or LONG-TERM ASSETS, are assets that cannot easily be converted into cash within one year. FIXED COSTS do not change whatever the change in a cost driver. FRAGMENTED INDUSTRY comprises numerous firms with no single firm large enough to be able to influence the industry s direction. G GAP ANALYSIS is an assessment of possible deficiencies in our value system based on delivered service outputs and shared costs. GOAL-SETTING refers to an approach for work motivation based on the assumption that goals represent an end-state towards which an employee strives and that they thus serve as immediate regulators of employee behavior and subsequent task performance. GOOD INNOVATIONS generate more returns than the industry average, but at least the going rate of a government bond these days 5% a year. GROWTH OPPORTUNITIES are demand-enhancing activities, cost-reducing activities or a combination of both. H HOLD-UP is a situation in which asymmetry between two parties, for example in a contractual agreement, turns in one of the parties favor and they use this dominant position to exploit the other party to do more than was initially agreed upon. HORIZONTAL INTEGRATION refers to the acquisition of competitors for, for example, their capacity. HURDLE RATE, or COSTS OF CAPITAL, is related to the risk premium and refers to the minimum acceptable rate of return the investor requires for providing working capital. I IDENTITY, whether individual or organizational, is the concept of self organized into rules for matching action to situations. INIMITABLE RESOURCES, in the VRIO framework, create disproportionally high costs for competing firms that want to imitate the strategy or products based on the imitable resource. INCOME STATEMENT, or PROFIT-AND-LOSS (P & L) STATEMENT, is a financial report that shows the revenues and expense generated and incurred by a company over a specified period. INCREMENTAL INNOVATIONS introduce relatively minor changes to existing products, services or processes, exploit the potential of an existing design and often reinforce the dominance of established firms. INDIRECT COSTS are related to the cost object but cannot be traced directly and must be allocated. INDUSTRY refers to a collection of competitors. INFORMATION is the set of facts derived from data structures when someone interprets and attaches narrative meaning to the data structures. INNOVATION is an invention that has been exploited, commercialized and/or brought to first use in manufacturing or in a market. INORGANIC GROWTH concerns the expansion of activities and reaches by acquiring and integrating new businesses into a firm s portfolio. INTANGIBLE PROPERTY refers to a set of rights defined by law that are not associated with a physical object, such as patents, copyrights, trade marks, licenses, debt or goodwill of an organization. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 04
INTEGRATING GENERALIST is a person able to integrate specialist knowledge for general purposes that lie beyond that of holders of common general knowledge and specialists. INTELLECTUAL PROPERTY refers to any unique product or service of the human intellect that has commercial value, such as inventions, literary works, books, films, paintings, brand names and slogans. LINE FUNCTION is an organizational unit whose focus is organizing, appointing personnel or commanding activities directly related to organizational goals. M MANAGEMENT INNOVATION refers to the invention and implementation of managerial principles, processes, practices and structures that significantly alter the way management is performed. INTRINSIC MOTIVATORS are causes of job satisfaction and include, for example, recognition, promotion/progress, achievement and responsibility. MARKET DEMAND refers to the total volume that would be bought of a particular product, by a defined customer group, in a defined geographical area and in a defined timeframe. INTRINSIC REWARDS are individually generated rewards based on employees getting pleasure from performing the work. INVENTION is something that was never available before and a good invention is characterized by novelty, utility and non-obviousness. ISLAMIC LAW, also known as Sharia law, is a legal system predominantly based on the Koran, the traditional teachings and practices of the Prophet Muhammad, as well as writings of Islamic scholars and the consensus of the Islamic legal community, and used in, for example, the Middle East and North Africa. L LEAD USERS are users of products or services whose current strong needs will become general in a marketplace months or years in the future. LEARNING, whether we speak of an individual, group or organization, occurs if, through its processing of information, the range of its potential behaviors is changed. LEGAL FACTORS of the macro environment concern the laws and regulations that protect society and people in general. MARKET refers to a geographical region in which the customers and competitors interact with a set of products or services serving a certain need and want. MARKET ORIENTATION refers to an organizational culture dedicated to delivering superior customer value. A firm s market-oriented culture is manifested in its activities relating to the organization-wide generation and dissemination of market information pertaining to customers and competitors, and forces affecting them, and the responsive or proactive action taken based on this information. MARKET POWER is the extent to which a firm can influence the price of a product or service by exercising control over its demand or supply, or both. MARKETING is an activity, set of institutions and process for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. MARKETING MANAGEMENT refers to the activities, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. LEGAL PERSON is a legal entity that has a legal name and has the rights, protections, privileges, responsibilities and liabilities under law equivalent to that of natural people. LIMITED LIABILITY COMPANIES (LTD.) are equivalent to the legal person. They are commercial businesses in which none of the shareholders is liable for the debts of the company but only the share capital they have contributed. MARKETING MIX, and its FOUR P S (product, price, place and promotion), is the set of parameters that the marketing manager actually can control, subject to the internal and external constraints of the marketing environment. MARKETING ORIENTATION refers to business activities that revolve around pushing products or services to the customer by means of marketing tactics, rather than delivering customer value. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 05
MILESTONES are identifiable events that are critical to the development of the business venture. MISSION states the business s reason for existing its raison d être. MONOPOLY RENT is a supernormal profit generated by exercising market power, or from having a dominant position in an industry, rather than by adding value to the product or service. MORAL HAZARD occurs when the investors lack the monitoring abilities and means of control to ensure that the entrepreneur does not engage in more uncertain activities than agreed upon. N NON-DISCLOSURE AGREEMENT (NDA) is a formal written agreement between two or more parties that outlines the confidential material, knowledge or information that the parties wish to share with one another but want to keep proprietary among the parties. O OPEN INNOVATION is the principle that firms can and should use external ideas, internal ideas and internal and external paths to market, as they look to advance their technology. OPERATING EXPENSES, or overhead expenses, are the ongoing administrative costs necessary for the continued functioning of the firm, but that are independent of specific business activities. OPERATIONAL EFFECTIVENESS refers to the continual quest for the improvements of business processes concerning productivity, quality and speed. OPPORTUNISTIC BEHAVIOR refers to a type of behavior where people take care of their own interests before the interests of others, such as their employers and the firm s owners interests. ORGANIC GROWTH concerns new product or market opportunities via existing business activities. ORGANIZATION DESIGN refers to the firm s organizational configuration, including its structure, governance and control mechanisms that ensure superior coordination of the respective resources, capabilities and activities as well as provide incentives for the employees to work for the overall good of the firm and its owners. ORGANIZATION PLAN (of a business plan) explains how and with whom we orchestrate our resources, tasks and processes to create and deliver superior customer value. ORGANIZATION, in the VRIO framework, means that the firm s tasks, procedures and incentive structures are organized to support the exploitation of the valuable, rare and costlyto-imitate resources. ORGANIZATIONAL CULTURE refers to the set of values and norms that controls our employees interaction with each other, the strategic alliances and the other key collaborators of the value system. ORGANIZATIONAL LEARNING occurs if one or more of an organization s functional units acquire knowledge that it finds potentially useful to the organization. ORGANIZATIONAL STRUCTURE is the formal system of tasks, decision rights, authority relationships and incentive systems that control how our employees coordinate their (inter) actions and use the resources and capabilities to deliver superior customer performance. ORIENTATION refers to the action or process of ascertaining one s position relative to specified points. In a business context, organizations align their business activities with respect to a particular orientation. OWNERS are individuals or organizations with legal and factual interests in the business, as opposed to the board s and CEO s control and power over the business, and employ the board. P PARTNERSHIP is a hybrid business form of highly regulated private and public limited companies and the single private person, in which the participants, or partners, determine their relationship in a partnership agreement. PATENT is an official document granted to inventors, or more usually their employers, by a government that gives them exclusive rights for a term of years to the proceeds of an invention in exchange for the full disclosure of the invention. PENROSE EFFECT refers to the managerial limitations on a business venture s rate of growth. PERCEIVED VALUE refers to the consumer s overall assessment of the utility of a product or service based on the perceptions of what is received and what is given. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 06
PERCEPTUAL MAP is a simple grid with two dimensions that reflect the dominant variables of differentiation in your target market. PRODUCT INNOVATIONS are tangible novelties that alter or improve the efficiency, design, particular features, etc. of new or existing products. POLITICAL FACTORS of the macro environment concern the way governments intervene in the general economy and markets. POSITIONING refers to the target market s perception of your offering, in the sense that positioning is not what you do to the product but what you do to the mind of the customers in your target market. POSITIVE DISCONFIRMATION OF EXPECTATION occurs when customers get what they expect plus just a little bit more but not too much to get them back for a repurchase. PROFIT-AND-LOSS (P & L) STATEMENT see Income statement. PROPERTY is generally considered a bundle of rights and the owner is free to exercise the rights over that property, and others are forbidden to interfere with the owner s exercise of those rights. Q QUALITATIVE MARKET RESEARCH METHODS are exploratory research methods that are predominantly used for preliminary insights into new opportunities or customer behavior, motivations and attitudes, etc. PRE-MONEY VALUATION is the value of your business opportunity just prior to an investment. PRIMARY ACTIVITIES, of the value chain, deal directly with the manufacturing and distribution of products and services and are separated into inbound logistics, operations, outbound logistics, marketing and sales, and (after-sales) services. PRIMARY DATA is the raw data collected for a current research problem, which has yet to receive any meaningful interpretation. QUANTITATIVE MARKET RESEARCH METHODS are descriptive research testing hypotheses and provide descriptive causal predictions. R RADICAL INNOVATIONS are significant technological breakthroughs based on a novel set of engineering and scientific principles and often open up new markets and potential applications. RARE RESOURCES, in the VRIO framework, are only controlled by a small number of competing firms. PROACTIVE MARKET approach drives the market to one s favor, by being oriented towards the latent, unexpressed needs and unrevealed preferences of customers. This approach is related to the notion of the exploration of new possibilities. PROCESS INNOVATIONS are innovations that take the form of new production technology, novel components or novel systems/methods of production. PROCESSES refer, like activities, generally to the way you implement a task, such as how you build a house. Consequently, there are many different processes that may accomplish the same task. PRODUCT AND PROCESS ORIENTATION is when a firm believes that production efficiencies, cost minimization and mass distribution are the key indicators to delivering quality products and services at affordable prices to customers. RELATIONAL RENT is a supernormal profit jointly generated in an exchange relationship that cannot be generated by either firm in isolation and can only be created through the joint idiosyncratic contributions of the specific alliance partners. RESOURCES are a firm s tangible and intangible assets, such as machinery, organizational processes, firm attributes, information, knowledge that are employed for the formulation and implementation of strategies that improve the firm s efficiency and effectiveness. RESPONSIVE MARKET APPROACH focuses on the expressed wants of customers and attempts to better target existing customer groups. Responsive firms are predominantly looking for newer, better products and marketing attributes close to existing offerings and customer groups. This approach is related to the notion of exploitation of old certainties. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 07
REVENUE DRIVERS are factors that affect revenues, such as variations in market size, market share, selling price, units sold, etc. RICARDIAN RENT is the difference between the output created by two similar organizations using the same amount of factors of production and human resources. RISK PREMIUM refers to the amount an investment s rate of return exceeds the returns of the risk-free interest rate, around 5%. S SALES FORECAST is the estimate of how many widgets you can sell, at what price, in a given timeframe and to what target market or customer. SALES ORIENTATION is based on the idea that the customer will buy more if the firm applies aggressive sales and advertising methods. SALES, OR SELLING, FUNCTION can be any of a number of activities designed to promote customer purchase of a product or service. SECONDARY DATA is made up of historical data structures previously collected and assembled for another purpose or problem. SEGMENT refers to a distinct group of customers from a market. SEGMENTATION means the identification of customer groups that respond to competitive offerings differently from other customers groups in a market. SERVICE OUTPUTS refer to the value-adding services produced by the individual members of the value system and are consumed by customers (the end-users) along with the product or service. SOCIO-CULTURAL FACTORS of the macro environment concern the general determinants of the demand for products and service as well as indicate people s willingness to work. STAFF FUNCTION is an organizational unit whose focus is on the knowing, thinking and planning functions, not on the organizational, human resources or command activities directly related to organizational goals. STAGED FINANCE refers to an investor s ability to use milestones as stages and decision points for abandoning or exercising the option to continue with the investments. STRATEGIC ALLIANCE is any cooperative effort between two or more independent business ventures to develop, manufacture or sell products or services. STRATEGIC CHOICE concerns corporate-level strategies and business-level strategies and revolves around the basic questions What markets do we compete in and how do we position ourselves within them? STRATEGIC MANAGEMENT refers to the set of strategic analyses, decisions and actions decision-makers in business ventures undertake to create the overall corporate strategy and business strategy of the firm and aims to determine the favorable industry position and the specific resource configurations that will ensure a sustained competitive advantage. STRATEGY DEVELOPMENT involves setting the business venture s vision, mission and strategic objectives as well as analyzing the organization and its business environment. STRATEGY IMPLEMENTATION is the critical act of implementing the chosen strategy and involves the organization of allocated resources and capabilities to ensure efficient and effective coordination and cooperation. STRATEGY refers to a heightened predictability of action, which implies that strategy involves choices that are commitment-intensive and as such constrain the organization s activities into the future. SUCCESS TRAPS are situations where people focus on what has worked previously at the expense of exploring for tomorrow s solution and thereby become obsolete when the market changes. SOLE PROPRIETORSHIP is a business form in which the owner (natural person) receives all profits and has unlimited responsibility for all losses and debts. SPECIALIST is a person highly skilled in a specific and restricted field. SUPPORT ACTIVITIES, of the value chain, assist the organization in accomplishing its primary activities and consist of firm infrastructure, human resource management (HRM), technology development and procurement. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 08
SUSTAINED COMPETITIVE ADVANTAGE occurs when competitors cannot imitate the benefits of a value-creating strategy. T TANGIBLE PROPERTY is a set of rights, defined by law, associated with a physical object, such as land, buildings, machinery and equipment, mineral resources or physical products. TARGET MARKETS are the segments whose demand corresponds best to the strengths and competencies of our business. VALUE CREATION concerns the processes of innovating, producing, delivering, marketing or servicing etc. products in the markets. VALUE SYSTEM is an interconnected system of different businesses value chains, through which a product or service and its components pass and become more valuable for the customer. VARIABLE COSTS change in proportion to changes in a cost driver. TASK refers to something you have to do, such as building a house (see also Processes). VERTICAL INTEGRATION refers to the acquisition of firms in one s value system. TECHNOLOGICAL FACTORS of the macro environment concern the general trends in the technological changes that create new opportunities for some businesses but also usher in the obsolescence of others. TECHNOLOGY ORIENTATION is characterized by being preoccupied with R & D and by acquiring and implementing new sophisticated technologies for product development. TIME COMPRESSION DISECONOMIES essentially means that it takes time to accumulate resources in the sense that the costs of developing a resource increase exponentially as the time taken to develop the resource is reduced. VISION concerns the business s future business path and direction. VRIO FRAMEWORK is an abbreviation of value, rare, imitability and organization and provides the four critical questions to assess whether a firm s resources and capabilities are a source of competitive advantage. W WANTS are the forms particular needs take when shaped by the consuming person s (sub) culture and individual personality. TRADE MARK means any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings. U UNIQUE SELLING PROPOSITION (USP) is a unique product or service value that a firm aggressively promotes in a consistent manner to its target market. V VALUABLE RESOURCES, in the VRIO framework, enable the firm to exploit an opportunity or neutralize a threat or, operationally, whether they generate revenue or decreases costs, or a combination of both. VALUE APPROPRIATION concerns the processes of extracting profits in the marketplace through property rights, difficultto-imitate strategies or resources and bargaining power, etc. VALUE CHAIN is a set of primary activities and support activities for a firm, or business unit, through which a product or service passes and become more valuable. BUSINESS DEVELOPMENT I a market-oriented perspective PAGE 09