GLOSSARY OF TERMS USED IN BARISTASIM

In BaristaSim, players practice many of the key concepts taught in courses in:
By playing BaristaSim, you can practice their in business, marketing, operations and finance, as well as critical thinking and decision making. See below for the meaning of key terms and a brief description of how these concepts are used in BaristaSim.
Competitive analysis: An analysis of the competition is based on information about the competitors that the company is facing. In Baristasim, such information may include the number of competitors you face, how many shops they open or close, what prices they charge and what salaries they pay. Information about the competition is provided in different sections of the game, but the main points are highlighted for each year in the Competition section on the News page.
Cumulative profit: This is the total profit generated by you during all the years of the game played so far.
Consumer confidence: A measure of how optimistic people feel about the economy as a whole and their own financial situation in particular. If consumer confidence is high than people are more likely to feel good about spending money in coffee shops.
Depreciation: A reduction in the value of a fixed asset. In BaristaSim Level 2, if you decide to invest in your own roasting machine then you are charged with an annual depreciation amount.
Emerging markets: These are markets that are developing. Although income levels are relatively low, emerging markets tend to grow fast. They also tend to be less stable then mature markets. In BaristaSim Level 3 you get to choose how much you invest in emerging markets.
Fair Trade: Your raw materials, such as coffee beans, may have a Fair Trade label to certify that the price received by the makers of the product (the farmers) is fair and enables them to make a decent living.
Franchising: In franchising, the owner of a brand (franchisor) gives the right to another company (franchisee) to use its brand, products, know-how and procedures. In BaristaSim Level 3 you can grow by franchising your business in both mature and emerging markets. Although you will not own stores that are franchised, you will get fees for each store that you franchise. These consist of an upfront payment and a percentage of the revenues of the franchisee.
Income statement: A financial statement that shows the revenues, costs and profit of a business during a particular period of time (usually one year). The statement is also referred to as the “Profit & Loss account”. In BaristaSim, the income statement for each year of the game is shown in the Dashboard.
Key performance indicators: These are the most important measures that show how well the business is doing. Key performance indicators usually include both financial and non-financial measures of performance. In BaristaSim, the non-financial performance indicators are reported just below the graphs on the Dashboard. The income statement includes the financial performance indicators such as sales, costs and profit.
Mature markets: These are countries with high income levels and generally have a high level of political stability. Mature markets are important because many people have incomes that enable them to spend in coffeeshops. On the other hand, since these markets are already mature, the growth rate of consumption in coffeeshops will be quite low. In BaristaSim Level 3 you get to choose how much you invest in mature markets.
PESTLE analysis: A PESTLE analysis (sometimes also called STEEPLE analysis) considers developments in the outside environment of a company in order to enable the company to make well informed decisions. A PESTLE analysis looks at developments in the environment that are Political, Economic, Social, Technological, Legal and Environmental. In BaristaSim, for each year developments on all these topics (except for environmental, which is included under Social & Technological) are included in the News section.
Tariffs: Tariffs (or import duties) are a tax that a country charges on imports. In the case of coffee beans this means that imported coffee beans become more expensive and the cost of making a cup of coffee increases.
Variable Cost: This is the cost incurred by making one additional unit of a product. In the case of a coffee shop, variable costs include items like coffee beans, water, sugar, milk and the cup.
Vertical Integration: Vertical integration happens when a company extends its operations to include activities that used to be carried out by a supplier. In BaristaSim Level 2 you can vertically integrate into coffee roasting. This means that you buy in raw coffee beans and do the coffee roasting inhouse with your own machines and staff rather than buying in coffee beans that are already roasted. Since you need to purchase a roasting machine, doing your own roasting only makes sense if you have sufficient volume in your business to justify the cost. Other benefits of inhouse coffee roasting include the ability to roast beans in the way that your customers like, thereby increasing customer satisfaction. And maybe your customers will like the special atmosphere generated by a coffee roasting machine in your shop!
- Business and management
- Strategic management
- Entrepreneurship
- Hospitality management
By playing BaristaSim, you can practice their in business, marketing, operations and finance, as well as critical thinking and decision making. See below for the meaning of key terms and a brief description of how these concepts are used in BaristaSim.
Competitive analysis: An analysis of the competition is based on information about the competitors that the company is facing. In Baristasim, such information may include the number of competitors you face, how many shops they open or close, what prices they charge and what salaries they pay. Information about the competition is provided in different sections of the game, but the main points are highlighted for each year in the Competition section on the News page.
Cumulative profit: This is the total profit generated by you during all the years of the game played so far.
Consumer confidence: A measure of how optimistic people feel about the economy as a whole and their own financial situation in particular. If consumer confidence is high than people are more likely to feel good about spending money in coffee shops.
Depreciation: A reduction in the value of a fixed asset. In BaristaSim Level 2, if you decide to invest in your own roasting machine then you are charged with an annual depreciation amount.
Emerging markets: These are markets that are developing. Although income levels are relatively low, emerging markets tend to grow fast. They also tend to be less stable then mature markets. In BaristaSim Level 3 you get to choose how much you invest in emerging markets.
Fair Trade: Your raw materials, such as coffee beans, may have a Fair Trade label to certify that the price received by the makers of the product (the farmers) is fair and enables them to make a decent living.
Franchising: In franchising, the owner of a brand (franchisor) gives the right to another company (franchisee) to use its brand, products, know-how and procedures. In BaristaSim Level 3 you can grow by franchising your business in both mature and emerging markets. Although you will not own stores that are franchised, you will get fees for each store that you franchise. These consist of an upfront payment and a percentage of the revenues of the franchisee.
Income statement: A financial statement that shows the revenues, costs and profit of a business during a particular period of time (usually one year). The statement is also referred to as the “Profit & Loss account”. In BaristaSim, the income statement for each year of the game is shown in the Dashboard.
Key performance indicators: These are the most important measures that show how well the business is doing. Key performance indicators usually include both financial and non-financial measures of performance. In BaristaSim, the non-financial performance indicators are reported just below the graphs on the Dashboard. The income statement includes the financial performance indicators such as sales, costs and profit.
Mature markets: These are countries with high income levels and generally have a high level of political stability. Mature markets are important because many people have incomes that enable them to spend in coffeeshops. On the other hand, since these markets are already mature, the growth rate of consumption in coffeeshops will be quite low. In BaristaSim Level 3 you get to choose how much you invest in mature markets.
PESTLE analysis: A PESTLE analysis (sometimes also called STEEPLE analysis) considers developments in the outside environment of a company in order to enable the company to make well informed decisions. A PESTLE analysis looks at developments in the environment that are Political, Economic, Social, Technological, Legal and Environmental. In BaristaSim, for each year developments on all these topics (except for environmental, which is included under Social & Technological) are included in the News section.
Tariffs: Tariffs (or import duties) are a tax that a country charges on imports. In the case of coffee beans this means that imported coffee beans become more expensive and the cost of making a cup of coffee increases.
Variable Cost: This is the cost incurred by making one additional unit of a product. In the case of a coffee shop, variable costs include items like coffee beans, water, sugar, milk and the cup.
Vertical Integration: Vertical integration happens when a company extends its operations to include activities that used to be carried out by a supplier. In BaristaSim Level 2 you can vertically integrate into coffee roasting. This means that you buy in raw coffee beans and do the coffee roasting inhouse with your own machines and staff rather than buying in coffee beans that are already roasted. Since you need to purchase a roasting machine, doing your own roasting only makes sense if you have sufficient volume in your business to justify the cost. Other benefits of inhouse coffee roasting include the ability to roast beans in the way that your customers like, thereby increasing customer satisfaction. And maybe your customers will like the special atmosphere generated by a coffee roasting machine in your shop!