Paper 1 Flashcards
(172 cards)
1
Q
Added value
A
The increase in value that a business creates when producing a product/service. It is the difference between the price
of product and the cost of the inputs involved in providing it.
2
Q
Autocratic leadership
A
The leader exerts power over employees/leads without consultation with employees.
3
Q
Bonus
A
Extra payment made in recognition of the contribution of
employees, often linked to profits/sales/targets/objective.
4
Q
Boston matrix
A
involves creating a name, symbol or design that
identifies and differentiates a product from others.
5
Q
Brand
A
A name, design, symbol, or logo that differentiates a business
or product from its competitors.
6
Q
Capital intensive production
methods
A
Those that require a relatively high level of capital
investment/cost compared to labour.
7
Q
Centralised structure
A
Is an organisational structure where business decisions are made at the
top of the hierarchy by senior management/or at the
headquarters of a business.
8
Q
Competitive pricing
A
Is setting the price of a product or service similar
to that set by rivals.
9
Q
Competition
A
Is the rivalry among sellers trying to achieve goals such as increasing profits, market share, and sales volume.
10
Q
Consultation
A
Discussions with employees about working methods/non-financial technique to improve staff performance.
11
Q
Cost efficiency
A
Is minimising costs/expenses/waste when producing a product or service.
12
Q
Customer satisfaction
A
Measures how products or services supplied by a company meet customer expectation.
13
Q
Cost plus pricing
A
Is a cost-based method for setting the prices of goods and services and is calculated by adding a mark-up percentage to the cost of the product.
14
Q
Complementary goods
A
Goods that are purchased together because they are consumed together.
15
Q
Differentiation
A
A feature of a product or service that distinguishes it from its competitors.
16
Q
Distribution
A
The delivery of goods from the producer to the consumer.
17
Q
Democratic leadership
A
Is a leadership style where the leaders are prepared to share decision-
making with employees.
18
Q
Design mix (2 marks)
A
The way in which function, aesthetics and economic manufacture are
combined in the overall design.
19
Q
Design mix (20 marks)
A
Function relates to the quality and reliability of a product. Cost of manufacture relates to whether the design allows the product to be made and sold profitably. Aesthetics relates to the appearance of the
smartphone.
20
Q
Decentralised Organisational
Structure
A
An organisational structure where daily operations
and decision- making responsibilities are delegated down the organisation.
21
Q
Demand
A
The amount of goods and services consumers are willing and able to buy at a given price at a given time.
22
Q
Distribution channels
A
The stages/methods involved in getting the finished product to customers and/or consumers.
23
Q
E-commerce
A
Is the buying and selling of products and services by businesses and consumers through electronic media such as the internet.
24
Q
Entrepreneur
A
A person who sets up a business and takes risks to generate a profit.
25
Entrepreneurial characteristics
Qualities or traits demonstrated by an individual starting up in business.
26
Empowerment
Is giving authority or power to workers to allow them to make their own decisions.
27
Ethical sourcing
Is where a business buys materials and products that are produced using fair working conditions and/or with no negative impact on the environment.
28
External recruitment
Is when the business looks to fill the vacancy from outside of the business.
29
Extension strategies
Methods used to prolong the life of a product.
30
Face-to-face survey
A research method used where the interviewer communicates directly with the respondent using a questionnaire.
31
Financial methods/incentives
Are monetary methods used to motivate workers such as
piecework, commission, profit share & performance related pay.
32
Flat organisations
Fewer levels of hierarchy, and lines of communication are shorter when
compared to a tall organisation structure.
33
Flexible working
Relates to a variety of working arrangements in terms of working hours, working locations and job variety.
34
Focus group
A group of people who participate in a discussion as part of market research to give feedback about a product or service.
35
Induction training
Training provided to new employees at the start of an employment contract.
36
Income elasticity of demand (YED)
The relationship between the change in quantity demanded and a change in income.
37
Internal recruitment
Is when the business looks to fill a job vacancy from within the company.
38
Inferior goods
Goods for which demand will fall if income rises or rise if income falls.
39
Laissez-faire leadership
Is a type of leadership style in which leaders allow group members to make decisions.
40
Labour costs
Are the total amount of money spent on employees within the business.
41
Labour-intensive production
methods
Are those that require a relatively high level of labour
compared to capital investment.
42
Market research
Is a systematic gathering of data regarding buyer intentions and market conditions.
43
Market orientation
Is when a business focuses on discovering and meeting the stated or hidden needs and desires of its customers.
44
Mass market
A large unsegmented market where mass appeal products are on sale.
45
Marketing mix
Is the way a business uses price, product, place, and promotion to market and sell its products.
46
Marketing
Identifying and satisfying of customer needs including the promoting and selling of products and services.
47
Market Share
The percentage of an industry or market's total sales that is earned by a particular company over a specified time period.
48
Market Segmentation
Is dividing the market into groups of people with similar attributes or common characteristics.
49
Market mapping
Is a form of market positioning. It is the use of a 2-dimensional diagram that plots products or services in a market using two key variables.
50
Non-financial techniques
Include delegation, consultation, empowerment, flexible working, job enlargement, job enrichment, job rotation and team working.
51
Niche market
A small part of the overall market that has certain special characteristics.
52
Normal goods
Goods for which demand will rise if income rises or fall if income falls.
53
On the job training
training that takes place while doing the job.
54
Off the job training
Training that takes place away from the work area.
55
Online retailing
The sale of goods and service using the internet.
56
Organisation structure
Shows the roles, responsibilities, and hierarchy of staff in an organisation.
57
Primary research
Is a new research that is specific to the business needs.
58
Price elasticity of demand (PED)
The responsiveness of quantity demanded to a change in price.
59
Profit sharing
Is a form of financial incentive given to employees, where part of the profit of the business is shared amongst the employees.
60
Profit
Is total revenue minus total cost.
61
Product life cycle
Describes the stages a product goes through from when it was first thought of until it is finally removed from the market. It consists of stages such as introduction, growth, maturity, and decline.
62
Product innovation
The development/creation of products not previously available.
63
Product portfolio
The range of products/services that is sold/produced by a business.
64
Place
Is where the product can be purchased and is also the process of making a product or service available to the consumer.
65
Penetration pricing
Is a practice of offering a low price for a new product or service during an initial offer in order to attract customers away from competitors.
66
Predatory pricing
When a business sells goods or services at a very low price or below cost price.
67
Product orientation
Is when a business focuses on selling the products it develops rather than what the customer wants/needs.
68
Product trials
When a business allows consumers to test a product or service to identify potential demand and/or free samples are provided to encourage future purchases.
69
Profit maximisation
Is when a business decision aims to make asmuch profit from the business operations as possible by increasing revenues or decreasing costs.
70
Promotion
Are methods which communicate information about
the product, brand, or service to the user.
71
Price comparison websites
Websites which compare the price of a particular product or service in different stores or from different companies.
72
Pricing strategies
Refer to the method(s) used by businesses to decide how the prices of their products and services will be set.
73
Price skimming
Is a pricing strategy used by businesses to initially set a high price for a new product which will reduce over time.
74
Paternalistic leadership
A leadership style where the leader makes decisions but takes into account the welfare of employees.
75
Price elastic demand
A change in price results in a greater change in demand. (more than 1)
76
Price inelastic demand
A change in price results in a proportionately smaller change in demand. (less than 1
77
Profit satisficing
Making enough profit to satisfy the needs of the business owner(s).
78
Qualitative Research
Is a market research collected relating to the opinions and beliefs of consumers.
79
Quantitative research
The collection of data that can be quantified.
80
Revenue
Total income earned by a business from the sales of its products.
81
Recruitment
The process of finding and hiring the best-qualified candidate for a job opening.
82
Redundancy
When a job is no longer needed by a business.
83
Sales maximisation
An attempt to generate as much sales revenue as possible in a given time period.
84
Secondary market Research
Gathering data or information that already exists/which has been collected for another purpose.
85
Social media
Websites and applications that enable users to create and share content to participate in social networking.
86
Social objective
Is a goal which benefits society.
87
Sponsorship
Is a form of marketing in which a payment is made by company/or goods supplied by a company, for the right to be associated with a person or event.
88
Sampling
Involves using a segment (sample) of a population to
represent the entire population’s attitudes.
89
Substitute goods
Are goods that can be used to satisfy the same needs in place of another.
90
Supply
Is the amount a producer is willing and able to supply at a given price in a given time period.
91
Span of control
The number of employees under a manager’s direct control in a business.
Tall organisational structure- has many levels of hierarchy with a
narrow span of control.
92
Test marketing
Involves trialing the product in a small area or to a limited number of users to assess the suitability of a product.
93
Trade-off
Occurs when two objectives cannot be fully achieved. It is a compromise that involves giving up something in return for gaining something else.
94
Training
The acquisition of knowledge, skills, and competencies as a result of the
teaching of vocational or practical skills.
95
Uncertainty
The inability to predict/a lack of knowledge about future events and outcomes.
96
Waste minimisation
Is an approach to cut out/reduce waste in the production/design process.
97
Zero hours’ contract/ Flexible
employment
Is where employees work only when they are needed with no guaranteed hours.
98
Adverse variance
Is where actual figures are worse than the budgeted figures.
99
Appreciation
The gradual rise in value/price of a currency against another currency
100
Bank loan
A fixed sum paid back over a set period with regular monthly payments with interest.
101
Batch production
A method that involves completing one operation at a time on all units before performing the next.
102
Break even output
The output a business needs to produce so that its total revenue and total costs are the same.
103
Break-even analysis
Is where variable and fixed costs are compared with sales revenue in order to determine the level of sales volume at which the business makes neither a profit nor a loss (the break-even point).
104
Break-even point
The point at which total revenue and total costs are the same.
105
Budgeting
Provides a target for costs or revenue that a business or department must aim to reach over a given period of time.
106
Buffer inventory
Stocks held as a precaution to cope with unforeseen demand.
107
Business angels
Are entrepreneurial individuals who provide capital in return for a proportion of the company equity.
108
Business plan
A document/plan for the development of the business giving details such as the product, resources, and cost/revenue/cash flow forecast.
109
Capacity utilisation
The percentage of total capacity that is actually being used in a period.
110
Cash flow forecasting
Is a form of budget which enables a business to plan future cash requirements to avoid liquidity issues.
111
Cash flow forecasts
The predicted flow of cash into and out of a business over a period of time.
112
Competitor
Is a business in the same market that offers a similar product or service.
113
Consumer Trends
Habits or behaviour of those involved in the use of goods and services.
114
Crowd funding
Is a project to raise finance by a large number of people who each contribute a relatively small amount to the total.
115
Current ratio
Gives an idea whether the business would be able to repay its liabilities with its assets.
116
Depreciation
Of the currency means it can buy less of another currency than previously; it has gone down in value.
117
Economic growth
The rise in output of an economy as measured by the growth in GDP, usually a s a percentage.
118
Exchange rate
Is the price of one currency in terms of another.
119
External finance
Money raised from outside business.
120
Fixed costs
Are costs that do not vary with output.
121
Flow production
Is associated with mass production where raw materials are transformed into a finished product via a continuous process.
122
Franchisees
Pay an initial fee and ongoing royalties for the use of a trademark, ongoing support, and the rights to use the franchisors systems of doing business and sell its products and services.
123
Franchising
Is a method of business ownership that involves a business selling the rights to another business to operate under its name and use its products.
124
Grants
Are a sum of money given by governments or other organisations for a specific purpose.
125
Gross profit
Total revenue minus the cost of goods sold.
126
Inflation
An increase in the aggregate/general level of prices in an economy over a period of time.
127
Intellectual property rights legislation
A form of legal protection that includes patents / copyrights / trademarks.
128
Internal finance
Money generated by the business or its current owners.
129
Inventory control
The optimum quantity of goods/components a business holds for the purpose of resale/production.
130
Job production
Involves a business producing items that meet the specific requirements of the customer.
131
Just in time
Involves holding no buffer inventory with supplies arriving just before they are required by the business.
132
Kaizen
Is a Japanese philosophy which places emphasis on making small
improvements in all business processes as it tries to achieve a culture of continuous improvement; good processes bring good results.
133
Labour-intensive production
Requires a high amount of human capital.
134
Lean production
An approach to operations that focuses on the reduction of resource use.
135
Leasing
Allows a company to rent/without owning an asset.
136
Legislation
Is the making of laws for people to follow.
137
Limited liability
Means the owners of the business are only liable for the money they have invested in the business.
138
Liquidity
Shows how quickly a business can access cash in order to meet its short-term debts.
139
Loan
Has to be paid back, usually with interest and at regular intervals.
140
Margin of safety
The range of output between the break-even level and the current level of output, over which a profit is made.
141
Over-utilisation
The position where a business is running at full capacity & straining resources.
142
Partnership
A form of business in which two or more individuals contribute
money, resources and skills and share profits and losses in accordance with a partnership agreement.
143
Patent
Provides legal protection for a product or process.
144
Private limited companies (LTD)
Is a business owned by shareholders where their liability for company debts is limited which means that shareholders can only lose the money they have invested.
145
Product recalls
Are when a company calls back its products from consumers due to a fault or problem.
146
Productivity
A measure of output of a person, machine, or process over a period of time.
147
Profitability
Is the degree to which a business makes a profit from its activities.
148
Public limited company (PLC)
Can offer shares on a stock exchange to the general public and shareholders are only limited to potentially lose the value of the amount paid for the shares.
149
Quality assurance systems
Are the processes that ensure production quality meets the requirements of the business/customers.
150
Quality management
The process of a business maintaining a desired level of excellence in a product/service by paying attention to each stage of the process.
151
Rate of inflation
Is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of money is falling.
152
Retained profits
Any remaining profits which are kept (retained) in the business for reinvestment in its operations rather than paid out to shareholders.
153
Sales forecasts
The process of estimating future sales either based on past data, industry comparisons or economic trends.
154
Sales volume
Is the quantity of units sold.
155
Share capital
Money introduced into the business through the sale of shares.
156
Short product lead-in times
Are the length of time between the first emergence of the product concept/design and its launch into the market.
157
Sole trader
Is a business set up and owned by one person.
158
Specialisation
The production of a limited range of goods.
159
Standardisation
Using uniform resources and activities or producing a uniform product.
160
Stock market flotation
The process of converting a business into a public limited company by issuing shares to the public.
161
Taxation
How the government raise money to finance its expenditure.
162
Trade credit
Is given by suppliers to a business to purchase materials with payment at a later date.
163
Trademark
A symbol, logo, word or words, name, figures, letter, image or mark legally registered.
164
Under-utilisation
The position where a business is producing at less than full
capacity.
165
Unemployment
Is when people who are able, available, and willing, and actively seeking work at the going wage rate but who cannot find a job.
166
Unlimited liability
A legal status which means that the owner of a business is personally liable for all business debts.
167
Variable costs
Costs to a business that vary with output.
168
Variance analysis
The process of calculating variances and attempting to identify their causes
169
Variance
The difference between actual financial outcomes & those budgeted.
170
Venture capital
A method/ source of finance to fund a business where the risk is greater for the investor.
171
Working capital
The cash available forday-to-day operations of a business.
172
Zero-based budgeting
Is a method of budgeting which does not use previous data/a budget from scratch.
