Glossary entry

The innovator's dilemma describes a phenomenon in which successful companies ignore new, disruptive innovations or take them up too late so as not to jeopardise their existing business model. The term goes back to Clayton Christensen and explains why market leaders are often displaced by smaller, more innovative competitors. The internal conflict between short-term success and long-term innovative ability is at the centre of the dilemma.

Cross-selling is a sales technique in which a customer is offered complementary or related products to the originally selected product. The aim is to increase the average order value and strengthen customer loyalty. A classic example is the reference "Customers also bought..." in online retail. Successful cross-selling is based on a good understanding of customer needs and sensible product logic.

10x thinking is a concept that aims to develop solutions that not only represent incremental improvements, but also increase performance or efficiency tenfold.

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.

Sunk cost fallacy refers to a cognitive error of judgement in which decisions are made on the basis of irreversible investments that have already been made - instead of being based on future costs and benefits. A typical example is sticking with projects even though they no longer objectively promise any added value simply because time, money or energy has been invested. In a business context, this false conclusion can lead to inefficient use of resources and poor strategic decisions. Rational action requires the conscious differentiation of sunk costs and forward-looking thinking.

The gross margin is a business ratio that describes the difference between sales and the direct costs of goods or services sold.

The saturation point describes the moment at which a market is largely exhausted and hardly any further growth is possible. Companies reach this point when almost all potential customers are already using the product or there is no longer any additional demand. From this point onwards, it becomes more difficult to increase sales and market share, and companies must focus on innovation, diversification or new markets in order to continue growing.

The long tail is a concept that was originally coined by Chris Anderson and describes the importance of niche markets in digital commerce. Instead of focussing on just a few bestsellers, companies can generate significant sales through the large number of products that have a low but constant demand. Especially in digital markets where inventory costs are low, companies can capitalise on the potential of the long tail to reach a wider audience and create a sustainable source of revenue.