key words Flashcards
(145 cards)
1
Q
Aim
A
The intention to reach a goal.
2
Q
Air pollution
A
The presence or introduction of harmful substances into the air causing disease, allergies or damage to humans, animals, plants or the built environment.
3
Q
Asset
A
Something the business owns; it has a value.
4
Q
Average rate of return
A
The average profit for the year as a percentage of the original investment.
Average rate of return = average return per annum/initial investment × 100
5
Q
Boston matrix
A
A tool for analysing the contribution made by each product in a business’ product portfolio. It plots each product’s position according to its market share and the rate of growth of the market.
6
Q
Brand image
A
The consumers’ perception of the brand; its character, qualities and shortcomings. It is developed over time and operates as a consistent theme through advertising campaigns.
7
Q
Break-even chart
A
A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross.
8
Q
Break-even output
A
The point at which the business’ total sales equals the total costs. There is neither profit nor loss.
9
Q
Buffer stock
A
A stock of raw materials held in reserve to protect the production process from unforeseen shortages.
10
Q
Business plan
A
A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.
11
Q
Cash
A
Money that the business has in cash or at the bank
12
Q
Cash flow forecast
A
A financial planning tool that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finance may be needed to maintain liquidity.
13
Q
Cash inflow
A
Money received by the business from its operations or investments.
14
Q
Cash outflow
A
Money paid out by the business to fund its operations or investment activities.
15
Q
Centralisation
A
Maintaining control by keeping authority at the senior levels of the organisation.
16
Q
Chain of command
A
The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.
17
Q
Commission
A
An amount of money paid to an employee that is based on a percentage of the sales he/she achieved; paid in addition to a basic salary.
17
Q
Channels of distribution
A
The route the ownership of the product transfers from the seller to the buyer; it may be a single transaction or pass through others such as wholesalers, distributors, agents and retailers
17
Q
Closing balance
A
The amount that remains in the account at the end of an accounting period.
18
Q
Competitive pricing
A
Setting the price of a product so that it is in line with competitors’ prices.
18
Q
Competition
A
The rivalry between businesses looking to sell their goods/services in the same market.
19
Q
Consumer law
A
Laws designed to ensure that businesses make products that are safe and of good quality, and that they deal with customers honestly and fairly.
20
Q
Consumer spending
A
The money spent by households on goods and services to satisfy their needs and wants.
21
Q
Contracts of employment
A
A legal document that sets out the terms and conditions of the job for the employer and the employee.
22
Cost
The money spent by a business on goods and services.
23
Cost-plus pricing
Setting the price of a good or service at an amount higher than the cost of producing it so that a profit is made.
24
Customer
Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.
25
Customer engagement
The relationship between the business and the customer that puts the customer’s requirements at the centre of the operation to build brand loyalty.
26
Customer loyalty
The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmes.
27
Customer satisfaction
Whether customers are pleased with the goods/services they receive; whether they would purchase again.
28
Decentralisation
Where authority is spread widely through the organisation.
29
Delayering
The reorganisation of the organisation’s employees so that there are fewer levels of management.
30
Delegation
Allocating a task to someone who would not normally be responsible for it.
31
Demand
The quantity of a particular product that will be bought at particular price over a specific time.
32
Directors
The people who are elected by the shareholders to run the business on their behalf.
33
Diseconomies of scale
When a business grows too large, leading to a possible increase in unit cost.
34
Disposal of waste
The removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.
35
Dividend
A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.
36
E-commerce
Business transactions carried out electronically on the internet.
37
Economies of scale
The cost advantage of producing on a large scale. As output increases the unit cost decreases
38
Employees
Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.
39
Employment law
Rulings that relate to the rights and responsibilities of people who work for a business; they affect the recruitment and selection process and how the business deals with its workers.
40
Enterprise
The ability to identify business ideas and opportunities to bring them to fruition and to take risks where appropriate.
41
Entrepreneur
A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.
42
Equality Act (2010)
Protects people from discrimination in the workplace and in wider society. It sets out the different ways in which it is unlawful to treat someone.
43
Ethical objectives
A business’ goals that relate to fair business practice or moral guidelines and make a positive contribution to the business’ reputation
44
Ethics
The moral principles that guide how a business operates.
45
Exchange rates
The price of one currency based on another or the cost of buying one currency from another, for example £1 = $1.21.
46
Expansion
The process of increasing a business’ size.
47
Export
Good/service sold to a customer in another country.
48
Extension strategies
Methods that can be used to prolong the life of a product; could include price reductions, modifications to the product or relaunch.
49
External growth
The growth of a business by joining with another by merger or takeover.
50
External sources of finance
Obtaining funds from sources that are not part of the business; possibilities include bank loan, mortgage, overdraft, additional partner or share issue
51
Factors of production
The elements that combine in the production process: land, labour, capital and enterprise.
52
Fixed costs
The costs that stay largely the same, regardless of the business’ output.
53
Flat organisational structure
An organisational structure with a wide span of control and few levels of hierarchy (a short chain of command).
54
Flow production
Using a production line to make goods continuously and in large numbers.
55
Focus groups
A small number of people from the target market brought together to discuss a particular product; produces qualitative data about their preferences and opinions
56
Franchising
The sale of the rights to use/sell a product by a franchisor to a franchisee. A fixed fee and/or a percentage is paid in return. The franchiser specifies the standards and provides training and support.
57
Fringe benefits
Additional ‘perks’ that are in addition to a wage/salary; they are liable to income tax.
58
Full time
Working all the usual hours required of an employee; usually 35 hours or more.
59
Gap in the market
An opportunity for a new business (or expansion) which may meet a need that is not being met, or a group of potential customers who are not yet purchasing a particular good/service.
60
Global warming
The steady increase in the earth’s temperature due to emissions and the build-up of greenhouse gases, resulting in climate changes
61
Globalisation
The trend for large businesses to operate on a worldwide scale; money, goods and services can be transferred across national borders.
62
Goods
Items that are produced from raw materials for sale to businesses or consumers.
63
Government grants
Money available from the government to fund projects that it wants to support; the money is not repaid, but there are conditions and often progress reports are required.
64
Growth
A business’ increase in size. Methods include: asset value, employees, market share, markets, profits and sales.
65
Health and Safety at Work Act (1974)
Sets out the duties and responsibilities of both employers and employees for health and safety in the workplace.
66
Hierarchy
The management structure of a business/organisation showing the levels of responsibility. It is often shown as an organisation chart.
67
Hire purchase
Buying items by making a small initial payment and paying the remaining amount in instalments over an agreed period of time.
68
Import
Good/service bought from a supplier in another country.
69
Income statement
A summary of the revenue and expenses over an accounting period that lead to a profit or loss position.
70
Induction
Training given to a new employee when they start a new job; it provides information about the business, its operation and working practices.
71
Inspection
Testing/examining items to check that materials or items conform to the specified requirements/standards.
72
Integration
Two or more businesses join together.
73
Interest rates
The rate charged for borrowing money over a period of time, or the reward for saving money.
74
Job analysis
The process of determining what the job entails, including responsibilities and tasks.
75
Job description
A summary of what the job entails, including job title, duties and who they are responsible for/to.
76
Job production
A method of creating a single product to meet an individual order.
77
Job share
A system where two employees choose to share a full time job; they receive the salary and benefits on a pro rata basis according to the proportion of the full time hours that each works.
78
Just in case (JIC)
Organising procurement to ensure that the production process never runs out of stock, reducing the number of sales lost due to insufficient raw materials.
79
Just in time (JIT)
Organising the ordering of raw materials and components to be delivered just before they will be used, reducing the need for storage.
80
Lean production
Continually working to reduce the resources used to create products: raw materials, labour, machines and premises.
81
Level of employment
The percentage of the population of working age that are employed.
82
Liability
The extent of the owner’s/owners’ responsibility for the debts of the business.
83
Limited liability
The owners are not responsible for the debts of the business. The limit of their liability for the business’ debts is the amount they invested.
84
Loans
A fixed sum of money borrowed for a specified period of time at an agreed rate of interest; repaid in instalments.
85
Local community
The individuals, other businesses and organisations that are located close to the business. The business interacts with these groups.
86
Location
The site of a business and the reasoning behind the choice of site.
87
Logistics
Managing the movement of supplies and products to ensure the timely delivery of supplies to the production process and finished products to customers.
88
Loss
Where expenditure is greater than income.
89
Loss leader
A good or service sold at below cost price to bring customers into the shop with the intention that, once there, they may purchase full-priced items too.
90
Management
Organising and coordinating business activities in order to fulfil production and meet the business’ objectives.
91
Margin of safety
The amount by which current sales exceed the break-even level of output.
92
Market
Where those wishing to buy goods/services make contact with those who have them to sell.
93
Market research
Collecting information about the customers’ needs, wants and preferences that will help the business to make design, production and marketing decisions.
94
Market share
The proportion of the whole market for a product that is held by the business.
95
Marketing
The coordination of activities that ensure that customers get what they want, in the amounts they want, when they want it and at a price that suits them.
96
Marketing mix
The combination of four areas of marketing activities (price, product, promotion and place) to make sure that customers’ needs and wants are met while generating optimum revenue.
97
M-commerce
Business transactions are carried out electronically by mobile phone.
98
Mergers
When two or more businesses agree to join together.
99
Mortgage
A method of borrowing to purchase property, using the property as security.
100
Motivation
The reasons people are interested in and committed to their job.
101
National minimum wage/living wage
The lowest hourly rate that can legally be paid by an employer to an employee.
102
Needs
The human wants that are essential to survival; clothing, food, shelter, warmth or water.
103
Net cash flow
The difference between cash inflows and cash outflows.
Net cash flow = cash inflows – cash outflows
104
Noise pollution
A type and level of noise that is excessive and disturbing to people or animals.
105
Not-for-profit organisations
Associations, charities, co-operatives or voluntary organisations set up to further non-monetary ideals such as cultural, educational, religious and public service. Profits/losses are retained/absorbed.
106
Objective
A specific statement that defines a precise goal that can be measured and delivered within a given time.
107
Off-the-job training
Employees are trained away from their job, at a college, training provider or the business’ training centre.
108
On-the-job training
Employees learn alongside experienced colleagues while they are doing the job.
109
Opening balance
The amount brought forward from the end of the preceding accounting period so that it is the starting figure for the new one.
110
Opportunity cost
The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.
111
Organic growth
A business grows by increasing its output, by increasing its customer base or by developing new product(s).
112
Organisational structures
Organisational structures
113
Outsourcing
Contracting another business to carry out some of the business’ activities, often to reduce costs.
114
Overdraft
Borrowing from a bank by drawing from a current account so that the balance becomes less than zero.
115
Owners
Individuals who own the business or own a share(s) in it, in return for the rights to decision making and profits, balanced with the risks involved.
116
Part time
Working only a proportion of the full time hours.
117
Partnerships
A business that is owned and operated by a group of between 2 or more people.
118
Person specification
Identifies the requirements of the job holder, including qualifications, experience and skills.
119
Point of sale
Opportunities to communicate information about the product in the place where it is sold (retail outlet); window displays, hanging signs or shelf signs.
120
Post-sales servicing
Maintenance or repair of equipment by the manufacturer or supplier during or after the warranty.
121
PR
Price penetration
122
Price penetration
Fixing a low price when a new product is first introduced (into an established market) so that the product gains market share quickly. Once the product is established, the price is then raised so that profit is increased.
123
Price skimming
Setting a very high price when a product (often technology item) is first introduced to the market in relatively small numbers; only those who can afford to pay high prices to own the latest models will be able to purchase the product. The price is later reduced so that others can afford to buy.
124
Primary industry
A business that extracts the earth's natural resources.
125
Primary research
Collecting information first-hand direct from the public; field research including surveys, questionnaires and testing designed specifically for the market/product.
126
Private limited company (ltd)
A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability.
127
Procurement
The process of buying goods and services including dealing with:
demand
selection of suppliers
analysing and negotiating prices
making the purchase
managing payments.
128
Product differentiation
Developing the features that set a product apart from others in the market (such as benefits, style, price) and using that as part of advertising and promotion
129
Product knowledge
An in-depth understanding of the features, use and application of the good/service that will enable the person selling it to provide any information that the purchaser wants before committing to buy.
130
Product life cycle
The stages through which a product travels during its journey from being an idea to being old and dated: research and development, introduction, growth, maturity, decline.
131
Product portfolio
The range of products offered by one producer.
132
Productivity
The amount produced by a worker/machine/factory in a given time; the ability to produce more output with fewer resources.
133
Profit
The difference between the money received from the sale of a good/service and the amount it cost; the amount that remains after all the costs have been paid.
Profit = total revenue – total cost
134
Profit maximisation
A business’ ability to make maximum profit with low operating expenses.
135
136
Profit sharing
A scheme that pays employees an additional amount based on the year’s profits.
137
Proximity to market
Businesses that serve their customers directly must be located close to those customers.
137
Promotion
Communicating information about the product to:
make consumers aware of a product
remind customers about a product
persuade customers to buy.
138
Public limited company (plc)
A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability.
139
Purchasing
The business buys the goods and services that it needs for producing the goods it sells or for delivering the services it sells.
140
Qualitative market research
Collecting information about potential customers’ opinions and preferences about the attributes/characteristics/properties of a product; open questions allow respondents to express their own views by not limiting their responses.
141
