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Flashcards in GLOSSARY Deck (100):
1

Commission

A payment made to employees based on the value of sales achieved. It can form all or part of a pay package . Commission is a form of incentive pay

2

Performance related pay

Staff get a bonus for meeting a target set by their manager

3

Profit sharing

Staff receive a part of any profits made by the business

4

Decentralised structure

A structure in which senior management has shifted the authority for some types of decision making to lower levels in the organization.

5

supplier

A business which:

 

sells  or supplies products to another business

6

customer

 

Any person or organisation which

buys/ or is supplied with a product

by a business

7

 

 

consumer

 

 

the person who ultimately  uses (or consumes) a product

8

 

 

markets

Where:

 

buyers and sellers meet to exchange goods or services

9

 

 

survey

 

research involving asking questions of people or organisations

(e.g. points of view)

10

 

 

respondents

 

people who provide data for a survey by answering questions

in a questionnaire or interview

11

 

 

questionnaire

 

a list of questions to be answered by respondents.

 

Designed to gather information about consumer tastes

(qualitive data - primary source)

12

 

 

focus group

 

In market research (qualitive research):

a group of people brought together

to answer questions & discuss a product, brand or issue

13

 

 

customer needs

 

the wants and desires of buyers of a product/

or the customers of a business

14

 

 

market research

 

the process of gaining information about customers, competitors & market trends through collecting primary or secondary data

15

 

primary (or field) research

 

the gathering of new data or information (primary data)

which has not been collected before

16

 

market segment

 

part of a market that contains a group of buyers

with similar buying habits,

such as age or income

17

 

price sensitive

 

when the price is very important in the decision

about whether or not to buy 

18

 

market map

perceptual map

positioning map

 

a diagram that shows the range of possible positions

for two features of a product

(such as low to high price)

19

 

gap in the market

 

when no business is currently serving the needs of the customer

for a particular product

20

 

product range

 

a group of similar products made by a business

(e.g. a number of different soap powders)

21

 

brand

 

a named product which customers see as different from other products

& which they can associate or identify with

22

 

brand image

 

 

the idea/ impression/ image

that customers have about a brand

23

 

wholesalers

 

Businesses that:

buy from manufacturers/suppliers worldwide

and

sell in bulk to smaller businesses at trade rates/prices

24

 

added value

(to a product)

 

the increased worth that a business creates for a product -

It is the difference between;

the price a businees pays its suppliers compared to the price it

charges to its customers

25

 

U.S.P

(Unique Selling Point)

 

a characteristic of a product that makes it different

from other similar products being sold in the market

(e.g. design/ quality/ image)

26

 

franchise

 

the right given by one business to another business to sell goods or services using its name (usually a branded product)

(e.g. McDonalds is a franchise)

27

 

franchisee

 

a business that agrees to:

manufacture/ distribute/ or provide a branded product,

under licence by a franchisor

 

28

 

franchisor

 

a business that gives franchisees the right to sell its branded product

in return for a fixed sum of money or royalty payment

29

 

enterprises

 

another word for businesses

30

 

entrepreneur

 

a person who owns and runs their own business

and (usually) takes risks

31

 

enterprise

 

a willingness by an individual or business to

take risks,

show initiative 

& undertake new ventures

32

 

risk

 

the chance of:

damage or loss

occurring as a result of making a decision

33

 

goods

 

physical or tangible products

(like a car, tv set, knife)

34

 

services

 

non-physical or intangible products

(like a haircut or a taxi journey)

35

 

creative thinking

(or thinking creatively)

 

coming up with:

new or creative ideas

36

 

competitive advantage

the advantage of a business that is both 

distinctive and defensible

that enables it to perform better that its rivals

37

 

deliberate creativity

 

the intentional creation of new ideas

through 

recognised and accepted techniques

38

 

lateral thinking

 

thinking differently to try and find 

new and unexpected ideas

39

 

'blue skies' thinking

 

a technique of creative thinking where participants are encouraged

to think of as many ideas as possible about an issue or problem

40

 

' six thinking hats'

 

a technique that helps to

organise/ focus ideas thought of in 'Blue Skies Thinking'

 

the SIX hats are : white, red, black, yellow, green & blue

41

 

invention

 

the discovery of a process or a new product.

typically/usually after a period of research

42

 

innovation

 

the process of transforming inventions into products

that can be sold to customers

43

 

Patent

 

Right of ownership of an invention or process when it is

registered with the Government

44

 

Copyright

 

legal ownership of materials such as:

books/ music/ films

which legally prevents these beng copied by others

 

45

 

Trademarks

 

the symbol/ sign/ other feature

of a product or business that can be protected by law

46

 

calculated risk

 

the probability of a negative event occurring

47

 

downsides

 

the disadvantages of a course of action,

including what could go wrong

48

 

upsides

 

the advantages of a course of actions including

what could go right

49

 

financial objectives

 

targets expressed in money terms such as:

making a profit

earning income or

building wealth

50

 

revenues

 

the amount of income a business earns over a period of time:

week

month

quarter (3 monthly)

annual (year)

51

 

revenues/ sale 

turnover

 

the amount of income received from:

selling goods or services over a period of time

 

52

 

sales volume

 

the number of items or products sold by a business

over a period of time

53

 

fixed costs

 

costs that do not vary with the output produced like:

rent,

business rates,

advertising costs,

salaries,

administration costs

54

 

variable costs

 

costs which change directly with the number of products

made by a business like:

cost of buying raw materials

55

 

total costs

 

all the costs of a business -

is equal to:

fixed costs + variable costs

56

 

financial quarter

 

the Financial Year is broken into 

4 x 3 month periods called Quarters.

Some payments are made quarterly rather than weekly, monthly or yearly

57

 

profit

 

occurs when revenues of a business are greater than its costs

over a period of time

58

 

loss

 

occurs when the revenues of a business are less than its costs

over a period of time

59

 

cash

 

bank notes (e.g £5, £10 notes etc)

coins

money

in the bank

60

61

62

 

cash flow

 

the flow of cash (money)

into and out of a business

63

 

inflow

 

the cash : flowing into a business

the receipts

64

 

business receipts

 

the inflow of cash into a business

 

(NB - not to beconfused with paper receipts for sales/purchases)

65

 

outflow

 

the cash flowing out of a business

often called its business payments

66

 

business payments

 

the outflow of cash flowing out of a business

(also known as outflow)

67

 

net cash flow

 

the receipts of a business

minus

its payments

(receipts - payments = net cash flow)

68

 

insolvency

 

when a business can no longer afford to pay its debts

69

 

closing balance

 

the amount of money in a business at the end of the month

70

71

 

cumulative cash flow

 

the sum of cash that flows into a business over time

72

 

cash flow forecast

 

a prediction of how cash will flow through a

business in a period of time in the future

73

 

opening balance

 

the amount of money in a business at the start of the month

74

 

business plan

 

a plan for the development of a business giving forecasts of items such as;

sales,

costs,

cash flow

75

 

long-term finance

 

sources of money for businesses that are either

borrowed

or 

invested

usually for one year

76

 

short-term finance

 

sources of money for businesses that have to be repaid - 

immediately

or

fairly quickly 

-within a year or less

(e.g an overdraft)

77

 

share

 

part-ownership in a business:

 

(e.g. a shareholder owning 25% of the shares owns one quarter of the business)

78

 

shareholder

 

a person that owns shares ( a percentage) in a business.

As a part-owner they share any profit made.

79

 

personal savings

 

money that has been set aside - and not spent -

by individuals and households

80

 

share capital

 

the monetary value of a company that belongs to its shareholders

81

 

venture capitalist

 

an individual or company which buys shares in what they hope

will be a fast growing business

- they hope to sell the shares at a profit in the longer term

82

 

loan

 

borrowing a sum of money which has to be -

repaid

with interest 

over a period of time

83

 

security

or

collateral

 

assets owned by a business which are used to guarantee repayments of a loan.

 

if the business fails to pay off the loan - the lender can sell the assets to pay off the loan

84

 

mortgage

 

a loan where property is used as security

this is usually a long-term loan of a period of 10-25 years

85

 

dividend

 

payments made to shareholders which is their share of the profit.

 

this can be received/paid monthly, quarterly or yearly

86

 

retained profit

 

profit which is kept back in the business and used to pay for investment in the business

87

 

leasing

 

renting equipment or premises

88

 

overdraft facility

A short term loan

 

An agreement with the bank to borrow more money

(usually an agreed amount) than is actually in the current account.

 

Interest is charged on the amount overdrawn

89

 

Factoring

 

a source of finance where a business is able to receive cash immediately for the invoices it has issued from a factor i.e. bank, instead of waiting the usual 30 days to be paid

90

 

Trade Credit (business to business)

 

Where trade suppliers will allow a period of time between supplying the product to the trade customer before it is paid. This is usually 30 days after an invoice is raised

91

 

Invoice

 

A written bill from the supplier to the customer for goods or services that need to be paid

92

 

What are the qualities of an Entrepreneur 

 

  • determination
  • inititive
  • willingness to take risks
  • decision making
  • ability to plan
  • gift of persuasion
  • showing leadership

93

 

Market share

 

The percentage of the market held by a company or product

94

 

Market growth

 

The increase in value of the whole market

95

 

The Boston Matrix

 

A model that helps the business to analyse their portfolio of business and brands      (product portfolio tool - product research)

96

 

What are the four elements of the Boston Matrix

 

  1. ?/Problem child
  2. Stars
  3. Cash cows
  4. Dog

97

 

Dog

 

  • Few prospects
  • should the business continue to sell it if it is profitable and funds other products

98

 

Cash Cow

 

  • Little growth 
  • An established and profitable product that can support other products

99

 

Star

 

  • Very successful product
  • Growth must be funded to keep up with demand -may lead to a cash flow issue

100

 

Question mark/ Problem Child

 

  • Presents an issue
  • Should the business invest to increase sales?