Enterprise and Entrepreneurship Topic 1 Flashcards
Revise words (183 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 profits; 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 find something new.
6
Q
Adapting existing products:
A
finding 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
Lack of financial security:
A
uncertainty for the business owner about day-to-day family income and assets.
11
Q
Independence:
A
the need by many business owners to make their own decisions and be their own boss.
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 profit).
20
Q
Business decisions:
A
choices that have to be made, usually within a short time period.
21
Q
Human resources:
A
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
TOPIC 1.2!!
A
25
Choice:
giving customers options and increasing
the chance that the product will be perfect for
the tastes/habits of one type of customer.
26
Convenience:
making life easier for customers, perhaps by a great location (next to the bus stop) or a product that saves time in preparation or consumption.
27
Identifying customers:
finding out who they are: their age, gender, incomes, where they live and what they want.
28
Quality:
to a customer quality means getting what they want, or perhaps better than expected; some companies use the term ‘customer delight’.
29
Understanding customers:
learning why customers do what they do, making it easier to see how to make a product that better suits them.
30
Focus group:
a group discussion among people selected from the target market; it draws on psychology to provide qualitative insights into consumer attitudes.
31
Primary research:
research conducted first-hand; it is tailored to a company’s specific needs, for example a quantitative sales estimate for a brand new chocolate bar.
32
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.
33
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.
34
Secondary research:
when a company uses research that has already been carried out for general purposes.
35
Demographics:
the study of the statistical differences that exist within a population, both now and in the future.
36
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.
37
Location:
the extent to which consumers identify with the place where they were born or grew up.
38
Market segments:
the subsets within a market that have been identified as a result of market segmentation.
39
(The) competition:
companies operating in your market or market sector.
40
Gap in the market:
an area on a market map where few or no existing brands operate, implying a business opportunity to fill an unmet consumer need.
41
Market map:
measuring where existing brands sit on a two-factor grid, for example young/old compared with high price/low price.
42
Competitive environment:
environment: the strength of competition between companies in the same market.
43
Innovative:
a new, perhaps original, product or process.
44
Unethical:
an action or decision that is wrong from a moral standpoint.
45
Topic 1.3!!
46
Aims:
a general statement of where you’re heading, for example ‘to get to university’.
47
Market share:
the percentage of a market held
by one company or brand.
48
Objectives:
a clear, measurable goal, so
success or failure is clear to see.
49
SMART objectives:
targets that are specific, measurable, achievable, realistic and time-bound.
50
Survival:
keeping the business going, which ultimately depends on determination and cash.
51
Fixed costs:
costs that don’t vary just because output varies, for example rent.
52
Interest:
the charges made by banks for the cash they have lent to a business, for example six
per cent per year.
53
Profit:
the difference between revenue and total costs; if the figure is negative the business is making a loss.
54
Revenue:
the total value of the sales made within a set period of time, such as a month.
55
Total costs:
all the costs for a set period of time, such as a month.
56
Variable costs:
costs that vary as output varies,
such as raw materials.
57
Formulae
Sales revenue = price × quantity sold
58
Formulae
Total costs = variable costs + fixed costs
59
Formulae
Profit = total revenue – total costs
60
Break-even:
the level of sales at which total costs are equal to total revenue. At this point the business is making neither a profit nor a loss.
61
Break-even chart:
a graph showing a company’s revenue and total costs at all possible levels of output.
62
Margin of safety:
the amount by which demand can fall before the business starts making losses.
63
Formulae
Break-even output = fixed costs/
price – variable costs
64
Formulae
Margin of safety = sales – break-even output
65
Cash:
the money the firm holds in notes and coins, and in its bank accounts.
66
Cash flow:
the movement of money into and out of the firm’s bank account.
67
Insolvency:
when a business lacks the cash to pay its debts.
68
Overdraft:
the amount of the agreed overdraft facility that the business uses.
69
Overdraft facility:
an agreed maximum level of
overdraft.
70
Cash flow forecast:
estimating the likely flows of cash over the coming months and, therefore,the overall state of one’s bank balance.
71
Closing balance:
the amount of cash left in the
bank at the end of the month.
72
Negative cash flow:
when cash outflows are
greater than cash inflows.
73
Net cash flow:
cash in minus cash out over the
course of a month.
74
Opening balance:
the amount of cash in the
bank at the start of the month.
75
Crowdfunding:
raising capital online from many small investors (but not through the stock market).
76
Dividends:
payments made to shareholders from the company’s yearly profits. The directors of the company decide how large a dividend payment to make; in a bad year they can decide on zero.
77
Retained profit:
profit kept within the business (not paid out in dividends); this is the best source of finance for expansion.
78
Share capital:
raising finance by selling part- ownership in the business. Shareholders have the right to question the directors and to receive part of the yearly profits.
79
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 flow.
79
Topic 1.4!!
80
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.
81
Bankrupt:
when an individual is unable to pay their debts, even after all personal assets have been sold for cash.
82
Limited liability:
restricting the losses suffered by owners/shareholders to the sum they invested
in the business.
83
Private limited company:
a small family business
in which shareholders enjoy limited liability.
84
Sole trader:
a business run by one person; that person has unlimited liability for any business debts.
85
Unlimited liability:
treating the business and the individual owner as inseparable, therefore making the individual responsible for all the debts of a failed business.
86
Franchising:
paying a franchise owner for the right to use an established business name, branding and business methods.
87
Royalties:
percentage of the sales revenue to be
paid to the overall franchise owner.
88
Entrepreneur:
a person who sets up a business and takes on financial risks in the hope of profit.
89
Fixed premises:
buildings that have to be where they are (for example, the high street); e-commerce buildings can be located anywhere.
90
Proximity:
nearness; whether or not a business wants to be close to a factor such as ‘materials’.
91
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.
92
Price:
setting the price that retailers must pay,
which in turn affects the consumer price.
93
Product:
targeting customers with a product that
has the right blend of functional and aesthetic
benefits without being too expensive to produce.
94
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.
95
Business plan:
a detailed document setting out the marketing and financial thinking behind a proposed new business.
96
Topic 1.5!!
97
Pressure groups:
organisations formed to put forward a particular viewpoint, such as promoting organic farming.
98
Stakeholders:
all those groups with an interest
in the success or failure of a business.
99
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.
100
Social media:
interactive channels of
communication, via words, photos or videos, such as blogs, Facebook and Instagram.
101
Digital communication:
messages or conversations conducted via email, text or
social media.
102
Payment systems:
ways of paying electronically
such as PayPal.
103
Consumer law:
acts of parliament that are
intended to protect customers from misleading or dangerous practices by companies.
104
Consumer rights:
laws that empower the
consumer to demand certain minimum standards from every business supplier.
105
Legislation:
laws passed by acts of parliament; breaking these laws may result in a fine or even a prison sentence.
106
Red tape:
the term given to laws that (some people say) tie the hands of business people, making it hard to act entrepreneurially.
107
Consumer spending:
the total spent by all shoppers throughout the country.
108
Exports:
goods produced in one country but sold overseas, for example a British-made Mini sold in France.
109
Recession:
a downturn in sales and output
throughout the economy, often leading to rising unemployment.
110
Consumer incomes:
the amount households have available to spend after income taxes have been deducted.
111
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.
112
Exchange rate:
the value of one currency
measured by how much it will buy of other currencies.
113
Inflation:
the rate of increase in the average price level.
114
Interest rate:
the annual cost of a loan to the
borrower.
115
Taxation:
charges placed by government on goods, imported goods and the incomes of individuals and companies.
116
Unemployment:
when someone of working age
wants a job but cannot get one.
117
2.1!!
118
Innovation:
bringing a new idea to the market, such as Warburtons’ clever idea of an extra- large crumpet.
119
Inorganic (external) growth:
growing by buying up other businesses or by merging with a business of roughly equal size.
120
Merger:
when two businesses of roughly equal size agree to come together to form one big business.
121
Organic (internal) growth:
growth from within the business, such as creating and launching successful new products.
122
Research and development (R&D):
the scientific research and technical development needed to come up with successful new products.
123
Takeover:
obtaining control of another business by buying more than 50 per cent of its share capital.
124
Flotation:
listing company shares on the stock market, allowing anyone to buy the shares. This means the price can float freely (up and down).
125
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 float its shares on the stock market.
126
Entering markets:
when a company decides to open up in a market it hasn’t been in before, for example Walkers launching cereal bars.
127
Exiting markets:
choosing to leave a market,
probably because it was loss-making and looked set to continue.
128
Competing internationally:
finding a way to succeed against rivals from overseas.
129
Free trade:
trade between countries with no barriers, for example no tariffs.
130
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.
131
Imports:
goods or services bought from overseas.
132
Tariffs:
taxes charged only on imports.
133
Trade blocs:
a group of countries that have agreed to have free trade within external tariff walls.
134
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).
135
Ethics:
weighing up decisions or actions on the basis of morality, not personal gain.
136
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 certification can be found on many products,
including KitKats.
137
Trade-offs:
how having more of one thing may force you to have less of another; for example, higher ethical standards may mean less profit.
138
Environment:
the condition of the natural world that surrounds us, which is damaged when there’s pollution.
139
Environmental considerations:
factors relating to ‘green’ issues, such as sustainability and pollution.
140
Sustainability:
whether or not a resource will
inevitably run out in the future; a sustainable resource will not.
141
2.2!!
142
Aesthetics:
how things appeal to the senses;
do they look great, smell good, feel nice, sound solid (the ‘ker-lunk’ of a BMW door shutting)
and taste great?
143
Economic manufacture:
making the product cheaply enough to make it profitable.
144
Extension strategy:
an attempt to prolong sales of a product for the medium to long term, to prevent it from entering its decline stage.
145
Function:
how well the product or service
works for the customer; for example, are the beds comfortable at a hotel; does the
smartphone take sharp photos?
146
Product differentiation:
the extent to which consumers see your product as being distinct from its rivals.
147
Product life cycle:
the theory that every product goes through the same four stages of introduction, growth, maturity and decline.
148
Profit margins:
profit as a percentage of the
selling price (one unit) or as a percentage of total sales revenue (for the business as a whole).
149
Branding:
giving your product or service a
name that helps recall and recognition, and gives a sense of personality.
150
E-newsletters:
regular updates on the
activities of a business sent electronically to actual or potential customers.
151
Promotional strategy:
a medium- to long-term
plan for communicating with your target customers.
152
Sponsorship:
when companies pay to have a
brand associated with an iconic individual or event (usually connected with sports or the arts).
153
Viral advertising:
when people start to spread
your message for you through social means, be it word of mouth or via social media.
154
Distribution:
how ownership changes as a
product goes from producer to consumer.
155
E-tailer:
an electronic retailer; in other
words purchasing electronically, either by e-commerce or, more likely these days, mobile commerce (m-commerce).
156
Retailer:
a shop or chain of shops, usually
selling from a building in a high street or shopping centre.
157
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 figure, but no more.
158
‘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.
159
2.3!!
160
Batch production:
producing a limited number
of identical products.
161
Flow production:
continuous production of
identical products, which gives scope for high levels of automation.
162
Job production:
one-off production of a one-off
item for a single customer.
163
Productivity:
a measure of efficiency, usually
output per person per time period (for example, Nissan UK’s 98 cars per worker per year).
164
Automation:
using machines that can operate
without people.
165
Flexibility:
the ability to switch quickly and
easily from one task to another.
166
Robots:
machines that can be programmed to do tasks that can be done by humans, such as
welding, spray painting and packing.
167
Bar gate stock graph:
a diagram to show changes in the level of stock over time.
168
Buffer (stock):
the minimum stock level held at
all times to avoid running out.
169
Just In Time (JIT):
running the business with so
little stock that new supplies have to arrive ‘just in time’ before they run out.
170
Stock(s):
items held by a firm for use or sale, for example components for manufacturing or sellable products for a retailer.
171
Availability:
knowing how to get the right
supplies quickly – just when you need them.
172
Logistics:
ensuring that the right supplies will be ordered and delivered on time.
173
Procurement:
obtaining the right supplies from
the right supplier.
174
Trust:
building a business relationship in which both sides know that the other won’t let them down.
175
Culture:
‘the way we do things round here’; in other words, the accepted attitudes and practices
of staff at a workplace.
176
Quality control:
putting measures in place to
check that the customer receives an acceptable level of quality.
177
Warranty:
the guarantee by the producer that it will repair any faults in a product for a specific period of time – often one year.
178
Customer engagement:
the attempt to make a customer feel part of something rather than an outsider.
179
Customer feedback:
comments, praise or criticisms given to the company by its
customers.
180
Post-sales service:
service received after the purchase is completed, perhaps because something has gone wrong or as a way of promoting customer engagement.
181
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.
182
Done!!
