Glossary entry

Intangible assets are intangible assets of a company that have no physical existence but nevertheless represent a significant economic value. These include brands, patents, copyrights, licences, software and trade secrets. They also include customer relationships and goodwill. Intangible assets are often difficult to value, but play a key role in differentiating a company in the market and building long-term competitive advantages.

Tangible assets are physically existing assets of a company that are tangible and have a measurable economic value. These include, for example, machinery, buildings, vehicles, land or inventories. Tangible assets differ from intangible assets such as brands, patents or software licences. They play a central role in accounting, investment decisions and often serve as collateral for loans.

Market entry barriers are factors that make it difficult or impossible for new companies to enter an existing market. These include high investment costs, legal regulations, strong brand loyalty, patents, economies of scale or exclusive distribution channels. Such barriers protect established companies from competition and secure long-term market shares. They are a central element of strategic market analyses and are often used to assess the attractiveness of a market.

The net profit margin shows how much of turnover remains in the company as profit after deducting all costs - including taxes, interest and operating expenses. It is one of the most important key figures for assessing the financial health and efficiency of a company. A high net profit margin indicates a strong business model, while a low margin indicates potential for optimising cost structures.

Cost leadership is a competitive strategy in which a company endeavours to be the most cost-effective provider in its industry. Through optimised processes, economies of scale and favourable procurement, products or services can be offered at lower prices - without losing profitability. The aim is to gain market share or better survive price wars. The strategy became particularly well known through Michael Porter's competition models.

The tipping point describes the critical moment at which a small change has a major impact and a development is suddenly massively accelerated. In business and marketing, it describes the point at which a trend, product or behaviour enters the mass market. The term was popularised by Malcolm Gladwell's book The Tipping Point. Once the tipping point has been passed, it is often almost impossible to return to the previous state.

Scalability describes the ability of a business model, technology or process to grow efficiently and without loss of quality as demand increases. A scalable company can increase turnover without increasing costs to the same extent. Digital products such as SaaS solutions in particular are considered highly scalable, as they can be delivered to many users at the same time with minimal additional effort. Scalability is a key factor for rapid, sustainable growth.

A core competency is a special skill or resource that makes a company unique and gives it a sustainable competitive advantage. It is created through the combination of knowledge, processes and technologies that are difficult to imitate. Typical core competences can be, for example, innovative strength, customer proximity or efficient production processes. Companies should concentrate on their core competences in order to be successful in the long term.

SaaS (Software as a Service) is a sales model in which software is not purchased but used as a service via the internet - usually on a subscription basis. The application runs on the provider's servers and can be accessed by users at any time via a browser or an app. Maintenance, updates and security are the responsibility of the provider. SaaS enables high scalability, low entry costs and simple collaboration.