business Flashcards
(165 cards)
1
Q
Dynamic nature of business:
A
the idea that
business is ever-changing because external
factors, such as technology, are always changing.
2
Q
Venture capital:
A
risk capital provided by an
investor willing to take a risk in return for a
share in any later profi ts; the venture capital
provider will take a share stake in the business.
3
Q
Demand:
A
the number of units that customers
want – and can afford – to buy.
4
Q
Entrepreneurs:
A
business people who see
opportunities and are willing to take risks in
making them happen.
5
Q
Obsolete:
A
a product or service with sales that
have declined or come to an end as customers
fi nd something new.
6
Q
Adapting existing products:
A
fi nding new products based on the original one, such as Wall’s White
Chocolate Magnum.
7
Q
Competitive advantage:
A
a feature of a business that helps it to succeed against rivals.
8
Q
Original ideas:
A
ideas that have not been done before.
9
Q
Business failure:
A
the collapse of a business,
probably leading to its closure.
10
Q
Independence:
A
the need by many business
owners to make their own decisions and be their
own boss.
11
Q
Lack of fi nancial security:
A
uncertainty for the
business owner about day-to-day family income
and assets.
12
Q
Risk and reward:
A
the balance between the worst
that can happen and the best that can happen.
13
Q
Customer needs:
A
the products or services
people need to make life comfortable.
14
Q
Customer wants:
A
what people choose to spend
their money on, once the weekly bills have been
paid.
15
Q
Goods:
A
products that may be fresh, such as
apples, or manufactured, such as Heinz Baked
Beans.
16
Q
Services:
A
providing useful ways to help people
live their lives, for example shops, restaurants
and hospitals.
17
Q
Branding:
A
giving a product or service
‘personality’, with a name and logo that makes
it stand out.
18
Q
Unique selling point (USP):
A
an original feature
of a product that rivals aren’t offering.
19
Q
Value added:
A
the difference between the
selling price and the cost of bought-in goods
and services (the difference that creates the
possibility of profi t).
20
Q
Business decisions:
A
choices that have to be
made, usually within a short time period.
21
Q
Human resources:
A
resources: a term used by
organisations that simply means employees.
22
Q
Resources:
A
things or people that can be used
to help build and run the business.
23
Q
Risk taking:
A
making decisions where unknown
factors or chances of failure loom large in the
decision-maker’s mind.
24
Q
Focus group:
A
a group discussion among people
selected from the target market; it draws on
psychology to provide qualitative insights into
consumer attitudes.
25
26
Qualitative data:
in-depth research into the
opinions and views of a small group of potential
or actual customers; it can provide insight into
why consumers buy what they buy.
26
Primary research:
research conducted
fi rst-hand; it is tailored to a company’s specifi c
needs, for example a quantitative sales
estimate for a brand new chocolate bar.
26
Lifestyle:
grouping people by common
characteristics in how they live, from their
participation in sports and leisure to their views
on the environment, taste in music and even
nerdier things such as a passion for trains.
27
Gap in the market:
an area on a market map
where few or no existing brands operate,
implying a business opportunity to fi ll an unmet
consumer need.
27
Quantitative data:
factual research among
a large enough sample of people to provide
statistically reliable results, for example a
survey of 500 people aged 15–24 years.
27
Location:
the extent to which consumers identify
with the place where they were born or grew up.
27
Demographics:
the study of the statistical
differences that exist within a population, both
now and in the future.
27
Secondary research:
when a company uses
research that has already been carried out for
general purposes.
27
Market map:
measuring where existing brands
sit on a two-factor grid, for example young/old
compared with high price/low price.
28
Market segments:
the subsets within a market
that have been identifi ed as a result of market
segmentation.
28
(The) competition:
companies operating in your
market or market sector.
29
Competitive environment:
environment: the strength of
competition between companies in the same
market.
30
Unethical:
an action or decision that is wrong
from a moral standpoint.
30
Aims:
a general statement of where you’re
heading, for example ‘to get to university’.
31
Innovative:
a new, perhaps original, product or
process.
32
Market share:
the percentage of a market held
by one company or brand.
33
Objectives:
a clear, measurable goal, so
success or failure is clear to see.
34
SMART objectives:
objectives: targets that are specifi c,
measurable, achievable, realistic and time-bound.
35
Survival:
keeping the business going, which
ultimately depends on determination and cash.
36
Fixed costs:
costs that don’t vary just because
output varies, for example rent.
37
Interest:
the charges made by banks for the
cash they have lent to a business, for example six
per cent per year.
38
Profit
the difference between revenue and total
costs; if the fi gure is negative the business is
making a loss.
39
Revenue:
the total value of the sales made within
a set period of time, such as a month.
40
Total costs:
all the costs for a set period of time,
such as a month.
41
Variable costs:
costs that vary as output varies,
such as raw materials.
42
Break-even:
the level of sales at which total
costs are equal to total revenue. At this point
the business is making neither a profi t nor a
loss.
43
Break-even chart:
a graph showing a company’s
revenue and total costs at all possible levels of
output.
44
Margin of safety:
the amount by which demand
can fall before the business starts making losses.
45
Cash:
the money the fi rm holds in notes and
coins, and in its bank accounts.
46
Cash fl ow:
the movement of money into and out
of the fi rm’s bank account.
47
Insolvency:
when a business lacks the cash to
pay its debts.
48
Overdraft:
the amount of the agreed overdraft
facility that the business uses.
49
Overdraft facility:
an agreed maximum level of
overdraft.
50
Cash fl ow forecast:
estimating the likely fl ows
of cash over the coming months and, therefore,
the overall state of one’s bank balance.
51
Closing balance:
the amount of cash left in the
bank at the end of the month.
52
Negative cash fl ow:
when cash outfl ows are
greater than cash infl ows.
53
Opening balance:
the amount of cash in the
bank at the start of the month.
54
Crowdfunding:
raising capital online from
many small investors (but not through the stock
market).
55
Dividends:
payments made to shareholders
from the company’s yearly profi ts. The
directors of the company decide how large a
dividend payment to make; in a bad year they
can decide on zero.
56
Retained profi t:
profi t kept within the business
(not paid out in dividends); this is the best
source of fi nance for expansion.
57
Share capital:
raising fi nance by selling part-
ownership in the business. Shareholders
have the right to question the directors and to
receive part of the yearly profi ts.
58
Trade credit:
when a supplier provides
goods but is willing to wait to be paid – for
perhaps up to three months. This helps with
cash fl ow.
59
Venture capital:
a combination of share capital
and loan capital, provided by an investor willing
to take a chance on the success of a small to
medium-sized business.
60
Bankrupt:
when an individual is unable to pay
their debts, even after all personal assets have
been sold for cash.
61
Sole trader:
a business run by one person; that
person has unlimited liability for any business
debts.
61
Limited liability:
restricting the losses suffered
by owners/shareholders to the sum they invested
in the business.
62
Private limited company:
a small family business
in which shareholders enjoy limited liability.
63
Unlimited liability:
treating the business and
the individual owner as inseparable, therefore
making the individual responsible for all the
debts of a failed business.
64
Royalties
percentage of the sales revenue to be
paid to the overall franchise owner.
65
Franchising
paying a franchise owner for the
right to use an established business name,
branding and business methods.
66
Entrepreneur
a person who sets up a
business and takes on fi nancial risks in the
hope of profi t.
67
Fixed premises:
buildings that have to
be where they are (for example, the high
street); e-commerce buildings can be located
anywhere.
68
Proximity:
nearness; whether or not a
business wants to be close to a factor such as
‘materials’.
69
Place:
how and where the supplier is going to get
the product or service to the consumer; it includes
selling products to retailers and getting the
products displayed in prominent positions.
70
Price:
setting the price that retailers must pay,
which in turn affects the consumer price.
71
Product:
targeting customers with a product that
has the right blend of functional and aesthetic
benefi ts without being too expensive to produce.
72
Promotion:
within the 4Ps promotion means
all the methods that a business uses to
persuade customers to buy, for example branding,
packaging, advertising to boost the long-term
image of the product and short-term offers.
73
Business plan:
a detailed document setting out
the marketing and fi nancial thinking behind a
proposed new business.
74
Pressure groups:
organisations formed to
put forward a particular viewpoint, such as
promoting organic farming.
75
Stakeholders:
all those groups with an interest
in the success or failure of a business.
76
E-commerce
selling online rather than in a
physical one-to-one transaction. An important
part of e-commerce is m-commerce, meaning
commerce using apps/smartphones rather
than websites/PCs.
77
Social media
interactive channels of
communication, via words, photos or videos,
such as blogs, Facebook and Instagram.
78
Digital communication
messages or
conversations conducted via email, text or
social media.
79
Payment systems
ways of paying electronically
such as PayPal.
80
Consumer law:
acts of parliament that are
intended to protect customers from misleading
or dangerous practices by companies.
81
Consumer rights:
laws that empower the
consumer to demand certain minimum
standards from every business supplier.
82
Legislation:
laws passed by acts of parliament;
breaking these laws may result in a fi ne or even
a prison sentence.
83
Red tape:
the term given to laws that (some
people say) tie the hands of businesspeople,
making it hard to act entrepreneurially.
84
Consumer spending:
the total spent by all
shoppers throughout the country.
85
Exports:
goods produced in one country but sold
overseas, for example a British-made Mini sold
in France.
86
Recession:
a downturn in sales and output
throughout the economy, often leading to rising
unemployment.
87
Consumer incomes:
the amount households
have available to spend after income taxes have
been deducted.
88
Economic climate:
like the weather, the economy
can run cold or hot; the economic climate is a
measurement of the current economic outlook,
which might be promising or worrying.
89
Exchange rate:
the value of one currency
measured by how much it will buy of other
currencies.
90
Infl ation:
the rate of increase in the average
price level.
91
Interest rate:
the annual cost of a loan to the
borrower.
92
Taxation:
charges placed by government on
goods, imported goods and the incomes of
individuals and companies.
93
Unemployment:
when someone of working age
wants a job but cannot get one.
94
Economic climate:
like the weather, the economy
can run cold or hot; the economic climate is a
measurement of the current economic outlook,
which might be promising or worrying.
95
Exchange rate:
the value of one currency
measured by how much it will buy of other
currencies.
96
Innovation:
bringing a new idea to the market,
such as Warburtons’ clever idea of an extra-
large crumpet.
97
Organic (internal) growth:
growth from within
the business, such as creating and launching
successful new products.
98
Inorganic (external) growth:
growing by buying
up other businesses or by merging with a
business of roughly equal size.
99
Research and development (R&D):
the scientifi c
research and technical development needed to
come up with successful new products.
100
Merger:
when two businesses of roughly equal size
agree to come together to form one big business.
101
Takeover:
obtaining control of another business by
buying more than 50 per cent of its share capital.
102
Flotation:
listing company shares on the stock market, allowing anyone to buy the shares. This means
the price can fl oat freely (up and down).
103
Public limited company (plc):
a company with at least £50,000 of share capital that can advertise its
shares to outsiders and is, therefore, allowed to fl oat its shares on the stock market.
104
Entering markets:
when a company decides
to open up in a market it hasn’t been in
before, for example Walkers launching
cereal bars.
105
Exiting markets:
choosing to leave a market,
probably because it was loss-making and
looked set to continue.
106
Competing internationally:
fi nding a way to succeed against rivals from overseas.
107
Free trade:
trade between countries with no barriers, for example no tariffs.
108
Globalisation:
the increasing tendency for countries to trade with each other and to buy global goods,
such as Coca-Cola, or services, such as Costa Coffee.
109
Imports:
goods or services bought from overseas.
110
Tariffs:
taxes charged only on imports.
111
Trade blocs:
a group of countries that have agreed to have free trade within external tariff walls.
112
Ethical considerations:
thinking about ethics,
which may lead to morally valid decisions or
may lead to the manipulation of customer
attitudes (that is, pretending to be ethical).
113
Ethics:
weighing up decisions or actions on the
basis of morality, not personal gain.
114
Fair trade:
a social movement whose goal is to
help producers in developing countries achieve
better trading conditions and to promote
sustainability. It ensures that the price paid
is high enough to allow fair wages to be paid
to the workers who produced it. Fair trade
certifi cation can be found on many products,
including KitKats.
115
Trade-offs:
how having more of one thing may
force you to have less of another; for example,
higher ethical standards may mean less profi
116
Environment:
the condition of the natural world
that surrounds us, which is damaged when
there’s pollution.
117
Environmental considerations:
factors
relating to ‘green’ issues, such as sustainability
and pollution.
118
Sustainability:
whether or not a resource will
inevitably run out in the future; a sustainable
resource will not.
119
Economic manufacture:
making the product
cheaply enough to make it profi table.
120
Extension strategy:
an attempt to prolong
sales of a product for the medium to long term,
to prevent it from entering its decline stage.
121
Product differentiation:
the extent to which
consumers see your product as being distinct
from its rivals.
122
Product life cycle:
the theory that every
product goes through the same four stages of
introduction, growth, maturity and decline.
123
Profi t margins:
profi t as a percentage of the
selling price (one unit) or as a percentage of
total sales revenue (for the business as a whole).
124
Branding:
giving your product or service a
name that helps recall and recognition, and
gives a sense of personality.
125
E-newsletters:
regular updates on the
activities of a business sent electronically to
actual or potential customers.
126
Promotional strategy:
a medium- to long-term
plan for communicating with your target
customers.
127
Sponsorship:
when companies pay to have a
brand associated with an iconic individual or
event (usually connected with sports or the arts).
128
Viral advertising:
when people start to spread
your message for you through social means, be
it word of mouth or via social media.
129
Distribution:
how ownership changes as a
product goes from producer to consumer.
130
E-tailer:
an electronic retailer; in other
words purchasing electronically, either by
e-commerce or, more likely these days, mobile
commerce (m-commerce).
131
Retailer:
a shop or chain of shops, usually
selling from a building in a high street or
shopping centre.
132
Budget:
a ceiling on the amount of money that
can be spent; a marketing budget of £1 million
means the marketing manager can spend up to
that fi gure, but no more.
133
‘Inform’ decisions:
evidence that can be used
to make a better decision; a company can gain a
better understanding of its customers through
the 4Ps, which helps in decision making.
134
Batch production:
producing a limited number
of identical products.
135
Flow production:
continuous production of
identical products, which gives scope for high
levels of automation.
136
Job production:
one-off production of a one-off
item for a single customer.
137
Productivity:
a measure of effi ciency, usually
output per person per time period (for example,
Nissan UK’s 98 cars per worker per year).
138
Automation:
using machines that can operate
without people.
139
Flexibility:
the ability to switch quickly and
easily from one task to another.
140
Robots:
machines that can be programmed to
do tasks that can be done by humans, such as
welding, spray painting and packing.
141
Bar gate stock graph:
a diagram to show
changes in the level of stock over time.
142
Just In Time (JIT):
running the business with so
little stock that new supplies have to arrive ‘just
in time’ before they run out.
143
Buffer (stock):
the minimum stock level held at
all times to avoid running out.
144
Stock(s):
items held by a fi rm for use or sale,
for example components for manufacturing or
sellable products for a retailer.
145
Availability:
knowing how to get the right
supplies quickly – just when you need them.
146
Logistics:
ensuring that the right supplies will
be ordered and delivered on time.
147
Procurement:
obtaining the right supplies from
the right supplier.
148
Trust:
building a business relationship in
which both sides know that the other won’t let
them down.
149
Culture:
‘the way we do things round here’; in
other words, the accepted attitudes and practices
of staff at a workplace.
150
Warranty:
the guarantee by the producer that it
will repair any faults in a product for a specifi c
period of time – often one year.
151
Quality control:
putting measures in place to
check that the customer receives an acceptable
level of quality.
152
Customer engagement:
the attempt to make a
customer feel part of something rather than an
outsider.
153
Customer feedback:
comments, praise
or criticisms given to the company by its
customers.
154
Post-sales service:
service received after
the purchase is completed, perhaps because
something has gone wrong or as a way of
promoting customer engagement.
155
Product knowledge:
how well staff know all
the features of the products and the service
issues surrounding the products, such as the
precise terms of Kia’s seven-year warranty on
its new cars.
