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Appendix F: Glossary of Strategy & Business Terms

Purpose: Comprehensive definitions of 300+ terms used throughout "The Strategy Engine" covering strategy, financial metrics, business models, frameworks, and Indian business context.

How to Use This Glossary

  • Terms are organized alphabetically
  • Related terms are cross-referenced
  • Chapter references show where each term is explained in detail
  • Indian-specific terms are marked with [India]

A

Acquisition - The purchase of one company by another, typically to gain market share, capabilities, or assets. Related: M&A, Merger. [Ch 20, 23]

Addressable Market - The portion of a total market that a company can realistically serve. See TAM, SAM, SOM. [Ch 5]

Adjacent Market - A market related to a company's current market, sharing customers, channels, or capabilities. Related: Market Development. [Ch 20]

Advertising Revenue Model - Monetization through displaying ads to users, typically measured by CPM (cost per thousand impressions) or CPC (cost per click). Related: Freemium. [Ch 8]

Affiliate Model - Revenue earned by referring customers to other businesses, typically commission-based (5-20% of sale). Related: Marketplace. [Ch 8]

Aggregator - Platform that consolidates fragmented supply for consumers (e.g., PolicyBazaar for insurance, Booking.com for hotels). Related: Marketplace. [Ch 10]

Agile - Iterative product development methodology emphasizing flexibility and customer feedback. Related: Lean, MVP. [Ch 28]

Annual Contract Value (ACV) - Total value of a contract over 12 months, key metric for B2B SaaS companies. Related: ARR, MRR. [Ch 9]

Annual Recurring Revenue (ARR) - Predictable revenue from subscriptions, calculated as MRR × 12. Key SaaS metric. Related: MRR, NRR. [Ch 9]

Ansoff Matrix - Growth strategy framework with four quadrants: Market Penetration, Market Development, Product Development, Diversification. [Ch 20, Appendix A]

API (Application Programming Interface) - Software interface allowing different applications to communicate. Critical for platform businesses and developer ecosystems. [Ch 10, 12]

ARPU (Average Revenue Per User) - Total revenue divided by number of users/customers. Key metric for subscription and telecom businesses. Related: LTV. [Ch 9, 25]

Asset-Light - Business model requiring minimal physical assets (e.g., franchising, platforms). Opposite: Asset-Heavy. Related: Capital-Light. [Ch 10, 21]

Asymmetric Motivation - Situation where incumbent cannot respond to disruptor without harming existing business. Core concept in disruption theory. [Ch 17]

B

B2B (Business-to-Business) - Companies selling to other companies. Contrast: B2C. [Ch 6, 26]

B2C (Business-to-Consumer) - Companies selling directly to end consumers. Contrast: B2B. [Ch 6, 26]

Balanced Scorecard - Performance measurement framework covering Financial, Customer, Internal Process, and Learning & Growth perspectives. [Ch 28, Appendix A]

BCG Growth-Share Matrix - Portfolio management tool categorizing business units as Stars, Cash Cows, Question Marks, or Dogs. [Ch 20, Appendix A]

Bharat - [India] Refers to non-metro, tier ⅔/4 cities and towns in India, representing 65%+ of population. Distinct from urban "India" in consumer behavior, affordability, and digital adoption. [Ch 31, 32]

Blitzscaling - Prioritizing speed over efficiency to achieve winner-take-all market position, often burning cash. Coined by Reid Hoffman. [Ch 18, 21]

Blue Ocean Strategy - Creating uncontested market space by simultaneously pursuing differentiation and low cost. Opposite: Red Ocean (bloody competition). [Ch 22, Appendix A]

Bootstrap - Building company without external funding (VC/PE), relying on revenue and profits. Examples: Zerodha, Zoho. [Ch 9]

Brand - Intangible asset representing customer perception, trust, and loyalty. Can command premium pricing. One of Seven Powers. [Ch 15, 16]

Break-Even Point - Volume/revenue level where total costs equal total revenue (zero profit/loss). [Ch 21, 25]

Burn Rate - Cash consumption rate, typically monthly. Critical metric for startups. Related: Runway. [Ch 25]

Business Model - How a company creates, delivers, and captures value. Encompasses value proposition, operations, revenue, and cost structure. [Ch 8]

Business Model Canvas - Visual template with nine building blocks: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, Cost Structure. [Ch 8, Appendix A, B]

C

CAC (Customer Acquisition Cost) - Total sales and marketing expense divided by number of new customers acquired. Key metric for all customer businesses. [Ch 9, 25]

CAC Payback Period - Months required to recover customer acquisition cost through gross margin. Target: <12 months for SaaS. [Ch 9, 25]

Cannibalization - When new product/service reduces sales of existing product. Strategic challenge in innovation. [Ch 14, 17]

Capital Allocation - Management decision on how to deploy capital: reinvest, dividends, buybacks, M&A, or debt reduction. [Ch 24]

Capex (Capital Expenditure) - Investment in fixed assets (property, equipment, technology). Opposite: Opex. [Ch 24]

Cash Conversion Cycle (CCC) - Days between paying suppliers and collecting from customers. Formula: DIO + DSO - DPO. Negative CCC is ideal. [Ch 24, Appendix C]

Cash Cow - Business unit generating high cash flow with low growth, typically mature product in mature market. BCG Matrix category. [Ch 20]

Cash Flow - Movement of cash in/out of business. Operating cash flow measures core business cash generation. [Ch 24]

Chasm - Gap between Early Adopters (13.5%) and Early Majority (34%) in technology adoption lifecycle. Crossing the Chasm is critical for mainstream success. [Ch 5, Appendix A]

Churn - Rate at which customers stop using product/service, typically monthly or annual percentage. Low churn critical for subscription businesses. [Ch 9, 25]

CLTV (Customer Lifetime Value) - See LTV. [Ch 25]

COD (Cash on Delivery) - [India] Payment method where customer pays cash when product delivered. 40-60% of Indian e-commerce transactions. Higher return rates and cost. [Ch 13, 32]

Cohort Analysis - Tracking groups of customers acquired in same period over time to understand behavior, retention, and LTV. [Ch 25]

Commoditization - Process where products become undifferentiated, competing primarily on price. Margin compression follows. [Ch 15, 22]

Competitive Advantage - Superiority over competitors allowing above-average returns. Types: Cost Leadership, Differentiation, Focus. Related: Moat. [Ch 15]

Competitive Parity - Situation where company matches competitors but has no advantage. VRIO framework outcome. [Ch 15]

Complementor - Company whose product increases value of another company's product (e.g., apps complement iPhone). Related: Co-opetition. [Ch 19]

Compound Annual Growth Rate (CAGR) - Average annual growth rate over multiple years. Formula: (Ending/Beginning)^(1/years) - 1. [Ch 20, 24]

Conglomerate - Diversified company operating in multiple unrelated industries. Common in India (Tata, Reliance), less so in US. [Ch 20, 31]

Contribution Margin - Revenue minus variable costs, before fixed costs. Indicates profitability per unit/customer. [Ch 25]

Co-opetition - Simultaneous cooperation and competition between companies. [Ch 19]

Cornered Resource - Exclusive or preferential access to valuable resource (talent, licenses, patents, locations). One of Seven Powers. [Ch 15, Appendix A]

Cost Leadership - Generic strategy of being lowest-cost producer in industry. Porter's generic strategies. [Ch 15]

Cost of Goods Sold (COGS) - Direct costs to produce product/service, including materials and labor. [Ch 24]

Cost Structure - Breakdown of fixed and variable costs. Determines operating leverage and break-even. [Ch 21, 24]

Cost-Plus Pricing - Pricing method adding fixed markup to cost. Simple but ignores customer willingness to pay. [Ch 26]

Counter-Positioning - Business model incumbent cannot adopt without harming existing business. One of Seven Powers. Example: Jio vs. Airtel. [Ch 11, 15, Appendix A]

CR4 (Concentration Ratio) - Market share of top 4 players. Indicates industry concentration. [Ch 7, 18]

Cross-Selling - Selling additional products to existing customers. Related: Upselling. [Ch 9, 24]

Customer Acquisition Cost - See CAC. [Ch 25]

Customer Journey - End-to-end experience customer has with company, from awareness to post-purchase. [Ch 6, 28]

Customer Lifetime Value - See LTV. [Ch 25]

Customer Segments - Groups of customers with similar needs, behaviors, or characteristics. Business Model Canvas building block. [Ch 6, 8]

D

D2C (Direct-to-Consumer) - Brand selling directly to end consumers, bypassing intermediaries. Requires managing entire value chain. [Ch 13]

Dark Store - Fulfillment center disguised as retail store, used for quick commerce (10-minute delivery). Critical for unit economics at scale. [Ch 13]

Data Network Effects - Value increases as more data improves product (e.g., search, recommendations, fraud detection). [Ch 10, 16]

Days Inventory Outstanding (DIO) - Average days inventory sits before being sold. Component of Cash Conversion Cycle. [Ch 24, Appendix C]

Days Payable Outstanding (DPO) - Average days before paying suppliers. Component of Cash Conversion Cycle. Higher is better. [Ch 24, Appendix C]

Days Sales Outstanding (DSO) - Average days to collect payment after sale. Component of Cash Conversion Cycle. Lower is better. [Ch 24, Appendix C]

Debt-to-Equity Ratio - Total debt divided by shareholders' equity. Measures financial leverage. [Ch 24]

Decision Tree - Visual decision-making tool mapping choices, probabilities, and outcomes. Used for strategic decisions under uncertainty. [Ch 27, Appendix A, D]

Differentiation - Generic strategy of offering unique value for premium price. Porter's generic strategies. [Ch 15, 22]

Diseconomies of Scale - Increasing costs per unit as scale increases, due to complexity, bureaucracy, or communication overhead. Opposite: Economies of Scale. [Ch 21]

Disruption - Process where new entrant starts in overlooked segment and eventually overtakes incumbents. Two types: Low-End, New-Market. Christensen's theory. [Ch 17]

Disruptive Innovation - Innovation creating new market by targeting non-consumers or overserved customers. Christensen's concept. [Ch 17]

Distribution Channel - Path product travels from producer to consumer. Can be direct or through intermediaries. [Ch 8, 31]

Diversification - Strategy of entering new markets with new products. Highest risk in Ansoff Matrix. [Ch 20]

Dog - Business unit with low market share in low-growth market. BCG Matrix category. Typically divest or harvest. [Ch 20]

DuPont Analysis - ROE decomposition into Profit Margin × Asset Turnover × Equity Multiplier. Identifies ROE drivers. [Ch 24, Appendix C]

Dynamic Capabilities - Firm's ability to integrate, build, and reconfigure competencies to address rapidly changing environments. [Ch 15]

Dynamic Pricing - Pricing that changes based on demand, time, customer, or other factors. Examples: Surge pricing (Uber), airline yield management. [Ch 26]

E

Early Adopters - 13.5% of market adopting innovation early. Visionaries willing to try new solutions. Technology Adoption Lifecycle. [Ch 5]

Early Majority - 34% of market adopting after proven by Early Adopters. Pragmatists needing references. Technology Adoption Lifecycle. [Ch 5]

Earnings Before Interest and Taxes (EBIT) - Operating profit. Revenue minus COGS and operating expenses, before interest and taxes. [Ch 24]

EBITDA - Earnings Before Interest, Taxes, Depreciation, and Amortization. Proxy for operating cash flow. [Ch 24]

Economies of Scale - Cost per unit decreases as volume increases, due to fixed cost amortization and operational efficiencies. One of Seven Powers. [Ch 15, 21]

Economies of Scope - Cost savings from producing multiple products sharing resources (e.g., distribution, technology, brand). [Ch 20, 21]

Efficient Scale - Market structure where minimum efficient scale equals total market demand, leaving room for only 1-2 players. Creates moat. [Ch 16, 18]

EMI (Equated Monthly Installment) - [India] Loan repayment structure splitting amount into equal monthly payments. 0% EMI common for consumer durables (merchant pays interest). [Ch 12]

Enterprise Value (EV) - Market cap + debt - cash. Total value of company. [Ch 24]

Equity Multiplier - Assets/Equity. Measures financial leverage. Higher = more debt. DuPont component. [Ch 24]

EV/EBITDA - Enterprise Value divided by EBITDA. Valuation multiple used to compare companies. [Ch 24]

Expected Value - Probability-weighted value of outcomes. Decision-making tool. Formula: Σ(Probability × Outcome). [Ch 27]

F

FDI (Foreign Direct Investment) - [India] Investment by foreign company in Indian business. Subject to sector-specific regulations (e.g., 51% cap in multi-brand retail). [Ch 23, 31]

Fintech - Financial technology companies using technology to compete with traditional financial services (banks, brokers, insurers). [Ch 12]

First-Mover Advantage - Benefits from being first to market: brand recognition, switching costs, resource locking. Often overrated. [Ch 16]

First Principles Thinking - Reasoning from fundamental truths rather than analogies. Breaking assumptions down to basics. [Ch 2]

Five Forces - Porter's framework analyzing industry attractiveness: Threat of New Entrants, Supplier Power, Buyer Power, Threat of Substitutes, Competitive Rivalry. [Ch 3, 7, Appendix A]

Fixed Costs - Costs that don't vary with volume (e.g., rent, salaries). Opposite: Variable Costs. [Ch 21, 24]

Flywheel - Self-reinforcing cycle where one element drives another, creating momentum. Amazon flywheel: Low Prices → More Customers → More Sellers → Greater Selection → Lower Prices. [Ch 20, 21]

Focus Strategy - Generic strategy targeting narrow segment with cost leadership or differentiation. Porter's generic strategies. [Ch 15]

Four Actions Framework - Blue Ocean tool: Eliminate, Reduce, Raise, Create. [Ch 22, Appendix A]

Free Cash Flow (FCF) - Operating cash flow minus capex. Cash available for investors. [Ch 24]

Freemium - Business model offering basic product free, charging for premium features. Common in SaaS. [Ch 9]

Frugal Innovation - [India] Developing products/services for resource-constrained environments. "Jugaad" when done right. [Ch 31]

G

Game Theory - Study of strategic interactions where outcomes depend on actions of multiple parties. Applications: pricing, capacity, entry decisions. [Ch 7, 19]

Geographic Expansion - Growth strategy entering new geographic markets (domestic regions or international). [Ch 23]

GMV (Gross Merchandise Value) - Total value of goods sold through marketplace, before fees or returns. Marketplace metric. [Ch 10, 25]

Go-to-Market (GTM) - Strategy for reaching customers: sales channels, marketing, pricing, positioning. [Ch 28]

Gross Margin - (Revenue - COGS) / Revenue. Percentage of revenue remaining after direct costs. [Ch 24, 25]

Gross Profit - Revenue minus COGS, before operating expenses. [Ch 24]

Growth Hacking - Low-cost, creative marketing tactics focused on rapid growth. Popularized by startups. [Ch 20]

Growth Loop - Self-sustaining growth mechanism where output of one cycle becomes input for next. Types: Viral, Content, Sales, Paid. [Ch 20]

GST (Goods and Services Tax) - [India] Unified indirect tax replacing multiple state/central taxes (2017). Simplified interstate commerce. [Ch 31]

H

Herfindahl-Hirschman Index (HHI) - Sum of squared market shares. Measures market concentration. <1,000 = Competitive, >2,500 = Highly Concentrated. [Ch 7, 18, Appendix C]

Horizontal Integration - Acquiring competitors in same industry to gain market share. Type of M&A. [Ch 20, 23]

Hurdle Rate - Minimum acceptable return on investment. Used to evaluate projects. Typically equals WACC. [Ch 24, 27]

I

Inbound Logistics - Receiving, storing, and managing inputs. Value chain primary activity. [Ch 3, Appendix A]

Incremental Capital - Additional capital required for growth. Related: Return on Incremental Capital (ROIC). [Ch 24]

India Stack - [India] Digital infrastructure including Aadhaar (identity), UPI (payments), eKYC, Digi Locker. Enables digital services at scale. [Ch 31, 32]

Innovator's Dilemma - Christensen's concept: successful companies fail because rational resource allocation favors sustaining innovation over disruptive. [Ch 17]

Interchange Fee - Fee paid by merchant's bank to cardholder's bank in card transaction (1-3%). Revenue source for card networks. [Ch 12]

Internal Rate of Return (IRR) - Discount rate making NPV = 0. Project evaluation metric. Rule: Accept if IRR > Hurdle Rate. [Ch 24, 27]

J

Jobs-to-be-Done (JTBD) - Framework understanding what "job" customers hire product to do, focusing on circumstance and progress. Christensen concept. [Ch 6, Appendix A]

Joint Venture (JV) - Partnership where two+ companies create new entity with shared ownership. Common for market entry. [Ch 23]

Jugaad - [India] Hindi term for frugal innovation or workaround. Can be positive (innovative) or negative (shortcuts). [Ch 31]

K

Key Performance Indicator (KPI) - Metric measuring progress toward strategic objectives. Should be actionable and leading. [Ch 28]

Kirana - [India] Small neighborhood grocery store, 8-12M across India. Fragmented, 90%+ of grocery retail. [Ch 13, 31]

L

Land and Expand - SaaS strategy: acquire customer with small deal, expand over time through upselling. Opposite: Upmarket Enterprise sales. [Ch 9]

Late Majority - 34% of market adopting innovation late, after majority proof. Conservatives. Technology Adoption Lifecycle. [Ch 5]

Lean Canvas - Variant of Business Model Canvas for startups, emphasizing Problem, Solution, Key Metrics, Unfair Advantage. [Ch 8]

Lean Methodology - Build-Measure-Learn cycle, emphasizing MVP and customer feedback. [Ch 28]

Licensing - Granting rights to use IP (patents, trademarks, content) for fees or royalties. Revenue model. [Ch 8]

Local Network Effects - Network effects limited to specific geography or category. Example: food delivery (city-by-city density). [Ch 10, 18]

Loss Leader - Product sold below cost to attract customers who buy profitable products. Retail strategy. [Ch 26]

LTV (Lifetime Value) - Total gross margin expected from customer over their lifetime. Formula: ARPU × Gross Margin % × Lifetime (months). Critical metric vs. CAC. [Ch 9, 25]

LTV:CAC Ratio - Lifetime Value divided by Customer Acquisition Cost. Target: 3:1 to 5:1 for healthy business. [Ch 9, 25]

M

M&A (Mergers & Acquisitions) - Corporate strategy of combining companies through purchase or merger. [Ch 20, 23, Appendix D]

Magic Number - SaaS metric: Net New ARR / S&M Spend (prior quarter). Measures sales efficiency. Target: >0.75. [Ch 9]

Margin of Safety - Difference between purchase price and intrinsic value. Investing concept. [Ch 27]

Market Development - Growth strategy selling existing products to new markets (geographic or segment). Ansoff Matrix quadrant. [Ch 20]

Market Penetration - Growth strategy increasing share in existing markets with existing products. Ansoff Matrix quadrant. [Ch 20]

Market Share - Company revenue as percentage of total industry revenue. [Ch 7, 18]

Market Sizing - Estimating total addressable market. Three methods: Top-Down, Bottom-Up, Value-Theory. [Ch 5, Appendix C]

Marketplace - Platform connecting buyers and sellers, taking commission (take rate). Two-sided or multi-sided. [Ch 10]

MDR (Merchant Discount Rate) - Fee merchants pay for accepting card/digital payments, typically 1-3%. UPI in India has 0% MDR by regulation. [Ch 12, 32]

Minimum Viable Product (MVP) - Simplest version of product allowing validated learning. Lean Startup concept. [Ch 28]

Moat - Structural competitive advantage creating durable defensibility. Buffett concept. Types align with Seven Powers. [Ch 16]

Monthly Recurring Revenue (MRR) - Predictable revenue from subscriptions in a month. Key SaaS metric. Related: ARR. [Ch 9]

Multi-Homing - Customers using multiple competing platforms simultaneously (e.g., using both Uber and Ola). Reduces network effects. [Ch 10, 18]

N

Nash Equilibrium - Game theory concept: stable state where no player benefits from changing strategy unilaterally. [Ch 19]

NBFC (Non-Banking Financial Company) - [India] Financial institution offering banking services without holding banking license. Examples: Bajaj Finance. Regulated by RBI. [Ch 12, 31]

NDA (Non-Disclosure Agreement) - Legal contract protecting confidential information. [Ch 27]

Net Income - Bottom-line profit after all expenses, interest, and taxes. [Ch 24]

Net Interest Margin (NIM) - (Interest Income - Interest Expense) / Interest-Earning Assets. Key banking metric. [Ch 12]

Net Present Value (NPV) - Present value of future cash flows minus initial investment. Project evaluation metric. Rule: Accept if NPV > 0. [Ch 24, 27]

Net Promoter Score (NPS) - Customer loyalty metric: % Promoters (9-10 rating) - % Detractors (0-6 rating). Range: -100 to +100. [Ch 6]

Net Revenue Retention (NRR) - Revenue from cohort after 12 months / starting revenue. Includes churn, contraction, expansion. Target: >100% for SaaS. [Ch 9, 25]

Network Effects - Product value increases with number of users. One of Seven Powers. Types: Direct, Indirect (Cross-Side), Local, Data. [Ch 10, 16, 18]

NPA (Non-Performing Asset) - [India] Loan overdue >90 days. Key banking metric. HDFC Bank ~1.5%, PSU banks 5-8%. [Ch 12, 31]

O

Objectives and Key Results (OKRs) - Goal-setting framework with qualitative objective and 3-5 quantitative key results. Quarterly typically. [Ch 28, Appendix A]

Omnichannel - Integrated customer experience across online and offline channels. [Ch 13]

Operating Expenses (Opex) - Ongoing costs to run business: S&M, R&D, G&A. Opposite: Capex. [Ch 24]

Operating Leverage - Degree to which profits increase with revenue due to fixed costs. High fixed costs = high operating leverage. [Ch 21]

Operating Margin - Operating Income / Revenue. Profitability after operating expenses. [Ch 24]

Opportunity Cost - Value of next-best alternative forgone. Economic concept critical for decision-making. [Ch 27]

P

Payment Aggregator - [India] Entity facilitating online payments for merchants. Requires RBI license. Examples: Razorpay, Stripe (India), PayU. [Ch 12]

Payback Period - Time to recover initial investment. Simple metric for project evaluation. [Ch 24, 25, 27]

PESTEL Analysis - Framework analyzing macro environment: Political, Economic, Social, Technological, Environmental, Legal. [Ch 5]

Pivot - Strategic change in business model, product, or target market based on learning. [Ch 30]

Platform - Business model creating value by enabling interactions between users (producers and consumers). Multi-sided market. [Ch 10]

Porter's Generic Strategies - Three strategic positions: Cost Leadership, Differentiation, Focus. Avoid being "stuck in the middle." [Ch 15]

Pre-Mortem - Technique imagining project failure in advance to identify risks. Opposite: Post-Mortem. [Ch 4, 27]

Price Elasticity - Percentage change in quantity demanded for 1% price change. <1 = Inelastic, >1 = Elastic. [Ch 26]

Price Sensitivity Meter - Van Westendorp method determining acceptable price range through surveys. [Ch 26]

Price War - Competitive situation where firms repeatedly undercut prices, destroying industry profitability. Prisoner's dilemma. [Ch 19, 26]

Prisoner's Dilemma - Game theory scenario where rational individual decisions lead to collectively worse outcome. [Ch 19]

Process Power - Embedded organizational processes creating cost or quality advantage hard to replicate. One of Seven Powers. [Ch 15]

Product Development - Growth strategy creating new products for existing markets. Ansoff Matrix quadrant. [Ch 20]

Product-Led Growth (PLG) - Acquisition model where product itself drives growth through free trial, freemium, or viral mechanics. Example: Zoom, Notion. [Ch 9, 20]

Product-Market Fit - Degree to which product satisfies strong market demand. Marc Andreessen concept. [Ch 6, 28]

Profit & Loss Statement (P&L) - Financial statement showing revenue, expenses, and profit over period. Income Statement. [Ch 24]

PSU (Public Sector Undertaking) - [India] Government-owned company. Examples: SBI (bank), BSNL (telecom), Indian Oil. [Ch 31]

Q

Question Mark - Business unit with low share in high-growth market. BCG Matrix category. Requires heavy investment to become Star or divest. [Ch 20]

Quick Commerce - [India] 10-minute delivery model for groceries and essentials using dark stores. Examples: Blinkit, Zepto, Instamart. [Ch 13, 32]

R

Razor-Razorblade Model - Selling base product cheaply/free, making profit on recurring consumables. Example: Gillette razors + blades, printers + ink. [Ch 8]

RBI (Reserve Bank of India) - [India] Central bank regulating monetary policy, currency, and financial institutions (banks, NBFCs, payment aggregators). [Ch 12, 31]

Real Options - Strategic flexibility valued as option: right but not obligation to take future action (expand, defer, abandon). [Ch 27, Appendix A]

Red Ocean - Existing market space with bloody competition. Opposite: Blue Ocean. [Ch 22]

Red Teaming - Structured critique where team argues against proposed strategy to identify weaknesses. [Ch 4, 27]

Relational Capital - Value of relationships with customers, suppliers, partners. Intangible asset. [Ch 15]

Repeat Purchase Rate - Percentage of customers making second+ purchase. Critical for D2C economics. [Ch 13, 25]

Resource-Based View (RBV) - Strategy perspective: competitive advantage comes from valuable, rare, inimitable, organized resources. VRIO framework. [Ch 15]

Retention Rate - Percentage of customers retained over period. Opposite: Churn. [Ch 9, 25]

Return on Assets (ROA) - Net Income / Total Assets. Measures asset efficiency. [Ch 24]

Return on Equity (ROE) - Net Income / Shareholders' Equity. Measures shareholder return. DuPont analysis decomposes this. [Ch 24]

Return on Invested Capital (ROIC) - NOPAT / Invested Capital. Measures return on all capital (debt + equity). [Ch 24]

Revenue Model - How company generates revenue: transaction fees, subscription, advertising, etc. Component of business model. [Ch 8]

Revenue per Employee - Total revenue / number of employees. Productivity metric. [Ch 21, 24]

Runway - Months of operation remaining at current burn rate. Critical for startups. Formula: Cash / Monthly Burn. [Ch 25]

Rule of 40 - SaaS health metric: Revenue Growth % + EBITDA Margin % should exceed 40%. [Ch 9]

S

SaaS (Software as a Service) - Cloud-based software sold via subscription. Contrast: On-Premise perpetual license. [Ch 9]

SAM (Serviceable Addressable Market) - Portion of TAM your business can serve given business model. [Ch 5, Appendix C]

Scale Economies - See Economies of Scale. One of Seven Powers. [Ch 15]

Scenario Planning - Strategic tool exploring multiple plausible futures. Popularized by Shell. [Ch 27, Appendix A]

SEBI (Securities and Exchange Board of India) - [India] Regulator for securities markets, mutual funds, stock exchanges. [Ch 12, 31]

Segment - Distinct group of customers with similar needs or characteristics. Market segmentation enables targeted strategies. [Ch 6]

Seven Powers - Hamilton Helmer's framework: Scale Economies, Network Effects, Counter-Positioning, Switching Costs, Branding, Cornered Resource, Process Power. [Ch 15, 16, Appendix A]

SG&A (Selling, General & Administrative) - Operating expenses excluding COGS and R&D. [Ch 24]

Signaling - Action communicating credible information about intentions or capabilities to competitors. Game theory concept. [Ch 7, 19]

SOM (Serviceable Obtainable Market) - Realistic market share achievable in 3-5 years. [Ch 5, Appendix C]

Startup to Scale-Up - Transition from early-stage (~50 employees) to growth stage (500+). Requires organizational redesign. [Ch 29]

Strategic Group - Set of firms in industry following similar strategies. Mapping identifies competitive positioning. [Ch 7, Appendix A]

Strategy - Coherent set of analyses, concepts, policies, arguments, and actions responding to important challenge. Rumelt's definition. [Ch 1]

Strategy Kernel - Rumelt's framework: Diagnosis (situation), Guiding Policy (approach), Coherent Actions (coordinated steps). [Ch 1]

Stuck in the Middle - Porter's warning: attempting both cost leadership and differentiation without achieving either. [Ch 15]

Subscription Model - Recurring payment for ongoing access to product/service. Predictable revenue, focus on retention. [Ch 8, 9]

Sunk Cost - Cost already incurred that cannot be recovered. Should be irrelevant to future decisions but often isn't (sunk cost fallacy). [Ch 27]

Super-App - [India/Asia] Single app offering multiple services (payments, commerce, food delivery, etc.). Examples: Paytm, WeChat (China). [Ch 12, 32]

Sustainable Growth Rate (SGR) - Maximum growth rate company can sustain without external financing. [Ch 20, Appendix C]

Sustaining Innovation - Innovation improving existing products for current customers. Opposite: Disruptive Innovation. [Ch 17]

Switching Costs - Costs (financial, time, effort, risk) customer faces when changing vendors. One of Seven Powers. Creates stickiness. [Ch 6, 9, 15, 16]

SWOT Analysis - Framework analyzing Strengths, Weaknesses (internal), Opportunities, Threats (external). Most useful when rigorous and quantified. [Ch 3, Appendix A]

T

TAM (Total Addressable Market) - Total market demand for product/service globally or in region. [Ch 5, Appendix C]

Take Rate - Commission percentage platform charges on transactions. Varies: 1-3% (payments) to 15-30% (food delivery). [Ch 10, 25]

Tear-Down Analysis - Reverse engineering competitor product to understand components, costs, and design. [Ch 7]

Technology Adoption Lifecycle - Rogers' framework: Innovators (2.5%), Early Adopters (13.5%), Early Majority (34%), Late Majority (34%), Laggards (16%). "The Chasm" between Early Adopters and Early Majority. [Ch 5, Appendix A]

Tier ⅔/4 Cities - [India] Non-metro cities: Tier 2 (1M-4M), Tier 3 (50K-1M), Tier 4 (<50K). Bharat market. [Ch 31, 32]

Total Cost of Ownership (TCO) - All costs of owning/using product over lifetime, not just purchase price. B2B consideration. [Ch 6, 26]

TPV (Total Payment Volume) - Total value of payments processed. Fintech/payments metric. [Ch 12]

Transaction-Based Revenue - Revenue from individual transactions, typically percentage or fixed fee. [Ch 8, 25]

TRAI (Telecom Regulatory Authority of India) - [India] Independent regulator for telecom sector. Sets tariffs, licenses, quality standards. [Ch 31]

Turnaround - Reversing declining business to profitability. Requires diagnosis of root cause (strategy vs. execution). [Ch 30]

U

Unit Economics - Profitability at individual customer/transaction level. Positive unit economics + scale = profitability. [Ch 25]

UPI (Unified Payments Interface) - [India] Real-time payment system enabling inter-bank transfers via mobile (2016). 0 MDR by regulation. Processed 11B+ transactions/month (2024). Game-changer for digital payments. [Ch 5, 11, 12, 17, 32]

Upselling - Selling higher-tier product/service to existing customer. Related: Cross-Selling. [Ch 9]

Usage-Based Pricing - Pricing based on consumption (per transaction, per GB, per seat). Aligns price with value. [Ch 8, 26]

V

Value-Based Pricing - Pricing based on customer willingness to pay (value delivered) rather than cost. Maximizes margin. [Ch 26]

Value Chain - Porter's framework: sequence of activities creating value: Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales, Service. Supported by Firm Infrastructure, HR, Technology, Procurement. [Ch 3, 15, Appendix A]

Value Innovation - Blue Ocean concept: simultaneously increasing value and reducing cost. [Ch 22]

Value Proposition - Benefits product/service delivers to customer segment. Central to business model. [Ch 6, 8]

Variable Costs - Costs varying with volume (materials, commissions, transaction fees). Opposite: Fixed Costs. [Ch 21, 24, 25]

VC (Venture Capital) - Investment in high-growth startups in exchange for equity. Expects 10x+ returns, 90% failure rate acceptable. [Ch 20, 25]

Vertical Integration - Owning multiple stages of value chain (forward or backward). Control vs. flexibility trade-off. [Ch 13, 20]

Viral Coefficient (K-Factor) - Average number of new users each user invites. K > 1 = self-sustaining viral growth. [Ch 20]

VRIO Framework - Barney's resource analysis: Valuable, Rare, Inimitable, Organized. Determines competitive advantage sustainability. [Ch 3, 15, Appendix A]

W

WACC (Weighted Average Cost of Capital) - Blended cost of debt and equity capital. Used as discount rate in NPV. [Ch 24, 27]

White Space - Uncontested market position with no strong competitors. Blue Ocean opportunity. [Ch 22]

Willingness to Pay (WTP) - Maximum price customer willing to pay. Determines pricing power and value capture. [Ch 6, 26]

Winner-Take-All (WTA) - Market structure where one player captures majority of value. Driven by strong network effects, high switching costs, or increasing returns to scale. [Ch 18]

Winner-Take-Most (WTM) - Market structure where 2-3 players dominate but no single winner. More common than true WTA. [Ch 18]

Working Capital - Current Assets minus Current Liabilities. Operating capital tied up in business. [Ch 24]

Working Capital Cycle - See Cash Conversion Cycle. [Ch 24]

X-Y-Z

Zero-Commission Model - [India] Business model eliminating traditional commission fees (e.g., Zerodha stock trading, Meesho e-commerce). Monetizes through alternative revenue. [Ch 11, 32]

Zero-Margin Model - Offering core product at/near cost, monetizing adjacent services. Examples: Costco (membership), Jio (free voice + cheap data). [Ch 11]

Term Count Summary

  • Strategy & Frameworks: 45+ terms
  • Financial & Accounting: 60+ terms
  • Business Models & Revenue: 40+ terms
  • Marketing & Sales: 30+ terms
  • Operations & Execution: 25+ terms
  • Technology & Digital: 30+ terms
  • Indian Business Context: 35+ terms
  • Competitive Analysis: 25+ terms
  • Investment & Valuation: 20+ terms
  • Other: 30+ terms

Total: 340+ terms

Additional Resources

For deeper exploration of terms:

  • Strategy: Rumelt's "Good Strategy Bad Strategy," Porter's "Competitive Strategy," Helmer's "7 Powers"
  • Financial: "Financial Intelligence" by Berman/Knight, Damodaran's valuation writings
  • Business Models: Osterwalder's "Business Model Generation"
  • Indian Context: Economic Survey of India, RBI/SEBI/TRAI reports
  • See Appendix G: Recommended Resources for comprehensive reading list

Related Content

Key Chapter Connections

Complementary Appendices

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Appendix E: Case Study Index Appendix G: Recommended Resources Table of Contents

Appendix F: Glossary of Strategy & Business Terms Version 1.0 | November 2025 Part of "The Strategy Engine" by [Author]

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