Topic one Flashcards
(202 cards)
1
Q
whats a good?
A
a physical product, such as a car.
2
Q
what’s a service
A
intangible product (something you cant touch) such as a delivery service
3
Q
what is advertising?
A
a method of communicating infomation about the product; the business pays for advertising time/space
4
Q
what is aim
A
the intention to reach a goal
5
Q
what is 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
6
Q
what is an asset
A
something the business owns; it has a value
7
Q
what is an average rate of return
A
the average profit for the year as a percentage of the original investment, average rate or return = average return per year x 100
8
Q
what is a boston martix
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.
9
Q
what is 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.
10
Q
what is a 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.
11
Q
what is break-even output
A
The point at which the business’ total sales equals the total costs. There is neither profit nor loss.
12
Q
what is buffer stock
A
A stock of raw materials held in reserve to protect the production process from unforeseen shortages.
13
Q
what is a 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.
14
Q
what is cash
A
money that the business has in cash or at the bank
15
Q
what is 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.
16
Q
what is cash inflow
A
Money received by the business from its operations or investments.
17
Q
what is cashoutflow
A
Money paid out by the business to fund its operations or investment activities.
18
Q
what is centralisation
A
Maintaining control by keeping authority at the senior levels of the organisation.
19
Q
what is chain of command
A
The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.
20
Q
what is 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.
21
Q
what is closing balance
A
the amount that remains in the account at the end of accounting period
22
Q
what is 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.
23
Q
what is competition
A
The rivalry between businesses looking to sell their goods/services in the same market.
24
Q
competive pricing
A
Setting the price of a product so that it is in line with competitors’ prices.
25
what is consumer law
Laws designed to ensure that businesses make products that are safe and of good quality, and that they deal with customers honestly and fairly.
26
consumer spending
the money spent by households on goods and services to satisfy their needs and wants
27
contracts of employment
A legal document that sets out the terms and conditions of the job for the employer and the employee.
28
cost
The money spent by a business on goods and services.
29
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.
30
customer
Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.
31
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.
32
customer loyalty
The relationship between the business and the customer that puts the customer’s requirements at the centre of the operation to build brand loyalty.
33
customer satisfaction
Whether customers are pleased with the goods/services they receive; whether they would purchase again.
34
decentralisation
where authority is spread throughout the organisation.
35
delaying
the reorganisation of the organisation's employees so that there are fewer levels of management
36
delegation
allocating a task to someone who would not normally be responsible for it
37
demand
the quantity of a particular product that will be bought at particular price over a specific time
38
directors
the people who are elected by the shareholders to run the business on their behalf
39
diseconomies of scale
when a business grows too large, leading to a possible increase in unit cost.
40
disposal of waste
the removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.
41
Dividend
A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.
42
E-commerce
Business transactions carried out electronically on the internet.
43
economies of scale
The cost advantage of producing on a large scale. As output increases the unit cost decreases
44
Employees
Individuals who work full time or part time for the business; they have a contract of employment detaling their duties and rights
45
Employment law
Rulings that relate to the rights and responsibilites of people who work for a business; they affect the recruitment and selection process and how the business deals with its workers
46
Enterprise
The ability to identify business ideas and opportunities to bring them to fruiton and to take risks where appropriate
47
Entrepreneur
A person who has the vison to use initiative to make business ideas happen, managing the resources and risks.
48
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.
49
Ethical objectives
A business' goals that relate to fair business practice or moral guidelines and make a positive contribution to the business' reputation
50
Ethics
The moral principles that guide how a business operates
51
Exchange rates
The price of one currency based on another or the cost of buying one currency from another, for example £1 = 1.21
52
Expansion
The process of increasing a business' size
53
Export
Good/service sold to a customer in another country
54
Extension strategies
Methods that can be used to prolong the life of a product; could include price reductions, modifications to the product or relaunch
55
External growth
The growth of a business by joining with another by merger or takeover
56
External sources of finance
Obtaining funds from sources that are part of the business; possibilities include bank loan, mortgage, overdraft, additional partner or share issue.
57
Factors of production
The elements that combine in the production process: land, labour, capital and enterprise
58
Fixed costs
The costs that stay largely the same, regardless of the business’ output.
59
Flat organisational structure
An organisational structure with a wide span of control and few levels of hierarchy (a short chain of command).
60
Flow production
Using a production line to make goods continuously and in large numbers.
61
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.
62
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.
63
Fringe benefits
Additional ‘perks’ that are in addition to a wage/salary; they are liable to income tax.
64
full time
Working all the usual hours required of an employee; usually 35 hours or more.
65
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.
66
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.
67
Global warming
The steady increase in the earth’s temperature due to emissions and the build- up of greenhouse gases, resulting in climate changes.
68
Globalisation
The trend for large businesses to operate on a worldwide scale; money, goods and services can be transferred across national borders.
69
goods
Items that are produced from raw materials for sale to businesses or consumers.
70
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.
71
growth
A business’ increase in size. Methods include: asset value, employees, market share, markets, profits and sales.
72
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.
73
Hierarchy
The management structure of a business/organisation showing the levels of responsibility. It is often shown as an organisation chart.
74
Hire purchase
Buying items by making a small initial payment and paying the remaining amount in instalments over an agreed period of time.
75
ImportGood/service bought from a supplier in another country.
Good/service bought from a supplier in another country.
76
Income statement
A summary of the revenue and expenses over an accounting period that lead to a profit or loss position.
77
Induction
Training given to a new employee when they start a new job; it provides information about the business, its operation and working practices.
78
Inspection
Testing/examining items to check that materials or items conform to the specified requirements/standards.
79
Integration
Two or more businesses join together.
80
Interest rates
The rate charged for borrowing money over a period of time, or the reward for saving money.
81
Job analysis
The process of determining what the job entails, including responsibilities and tasks.
82
Job description
A summary of what the job entails, including job title, duties and who they are
responsible for/to.
83
Job production
A method of creating a single product to meet an individual order.
84
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.
85
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.
86
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.
87
Lean production
Continually working to reduce the resources used to create products: raw
materials, labour, machines and premises.
88
Level of employment
The percentage of the population of working age that are employed
89
Liability
The extent of the owner's/owners' responsibility for the debts of the business.
90
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.
91
Loans
A fixed sum of money borrowed for a specified period of time at an agreed rate
of interest; repaid in instalments.
92
Local community
The individuals, other businesses and organisations that are located close to the
business. The business interacts with these groups.
93
Location
The site of a business and the reasoning behind the choice of site.
94
Logistics
Managing the movement of supplies and products to ensure the timely delivery
of supplies to the production process and finished products to customers.
95
Loss
Where expenditure is greater than income.
96
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.
97
Management
Organising and coordinating business activities in order to fulfil production and meet the business’ objectives.
98
Margin of safety
The amount by which current sales exceed the break-even level of output.
99
Market
Where those wishing to buy goods/services make contact with those who have them to sell.
100
Market research
Collecting information about the customers’ needs, wants and preferences that will help the business to make design, production and marketing decisions.
101
Market share
The proportion of the whole market for a product that is held by the business.
102
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.
103
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.
104
M-commerce
Business transactions are carried out electronically by mobile phone.
105
Mergers
When two or more businesses agree to join together.
106
Mortgage
A method of borrowing to purchase property, using the property as security.
107
Motivation
The reasons people are interested in and committed to their job.
108
National minimum wage/living wage
The lowest hourly rate that can legally be paid by an employer to an employee.
109
Needs
The human wants that are essential to survival; clothing, food, shelter, warmth or water.
110
Net cash flow
The difference between cash inflows and cash outflows. Net cash flow = cash inflows – cash outflows
111
Noise pollution
A type and level of noise that is excessive and disturbing to people or animals.
112
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.
113
Objective
A specific statement that defines a precise goal that can be measured and delivered within a given time
114
Off-the-job training
Employees are trained away from their job, at a college, training provider or the business’ training centre.
115
On-the-job training
Employees learn alongside experienced colleagues while they are doing the job.
116
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.
117
Opportunity cost
The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.
118
Organic growth
A business grows by increasing its output, by increasing its customer base or by developing new product(s).
119
Organisational structures
The way in which the organisation is divided into levels of management, functions and responsibilities.
120
Outsourcing
Contracting another business to carry out some of the business’ activities, often to reduce costs.
121
Overdraft
Borrowing from a bank by drawing from a current account so that the balance becomes less than zero.
122
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.
123
Part time
Working only a proportion of the full time hours.
124
Partnerships
A business that is owned and operated by a group of between 2 or more people.
125
Person specification
Identifies the requirements of the job holder, including qualifications, experience and skills.
126
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.
127
Post-sales servicing
Maintenance or repair of equipment by the manufacturer or supplier during or after the warranty.
128
PR
Managing the relations with groups such as consumers, the media, pressure groups or investors to present a favourable impression and generate interest.
129
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.
130
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.
131
Primary industry
A business that extracts the earth's natural resources.
132
Collecting information first-hand direct from the public; field research including surveys, questionnaires and testing designed specifically for the market/product.
Primary research
133
Private limited company (ltd)
A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability.
134
Procurement
The process of buying goods and services including dealing with:
demand
selection of suppliers
analysing and negotiating prices
making the purchase
managing payments.
135
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.
136
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.
137
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.
138
Product portfolio
The range of products offered by one producer.
139
Product recalls
The withdrawal from sale by the manufacturer of a defective or contaminated item.
140
Productivity
The amount produced by a worker/machine/factory in a given time; the ability to produce more output with fewer resources.
141
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.
142
Profit maximisation
A business’ ability to make maximum profit with low operating expenses.
143
Profit sharing
A scheme that pays employees an additional amount based on the year’s profits.
144
Promotion
Communicating information about the product to:
make consumers aware of a product
remind customers about a product
persuade customers to buy.
145
Proximity to market
Businesses that serve their customers directly must be located close to those customers.
146
Public limited company (plc)
A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability.
147
Purchasing
The business buys the goods and services that it needs for producing the goods it sells or for delivering the services it sells.
148
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.
149
Quantitative market research
Using sampling techniques such as surveys where the findings are expressed numerically; closed questions allow a limited choice of responses and are easy to turn into statistics for analysis.
150
Raising finance
Getting the money to pay for starting the business or for developing it.
151
Raw materials
Businesses that use raw materials that are heavy and/or bulky choose to locate close to their suppliers to reduce the cost of transport or storage.
152
Recruitment
The process of hiring a new employee.
153
Recycling
The conversion of waste into reusable material.
154
Retailer
A business or person that sells goods to the consumer.
155
Retained profit
An internal source of finance; a portion of the year’s profit is kept back to fund projects.
156
Revenue
The income generated from the sale of goods/services.
157
Risk
The possibility that the return on investment will be lower than expected.
158
Salary
A method of paying employees for their work; based on a fixed annual amount, normally paid monthly.
159
Scarce resources
When the raw materials that are available are not sufficient to meet needs.
160
Secondary industry
A business that uses raw materials to manufacture goods or construct items.
161
Secondary research
Examining information from published sources; desk research using information that has been collected for other purposes.
162
Segmentation
Breaking the whole market for a product into different groups or types of consumers with similar needs/wants/characteristics; enables the marketing mix to be designed to meet their needs more precisely.
163
Selection
The process of choosing which applicant to employ.
164
Service
An action that is carried out to fulfil a need or demand in return for payment.
165
Share(s)
The units of the business that are available for sale to investors.
166
Share issue
New shares in a business made available for the public to buy.
167
Shareholder(s)
Shareholder(s)
168
Shareholder value
The value that a shareholder is able to get for the money invested in the business: capital gains, dividend payments, pay-outs to shareholders or proceeds from buyback programmes.
169
Social objectives
A business’ goals that relate to fair treatment of the people concerned: customers, investors, suppliers or workers.
170
Sole traders
A business that is owned and operated by one person.
171
Sources of finance
Ways of obtaining the funds the business needs; money may be needed to meet short or long term needs.
172
Span of control
The number of people for whom a manager is directly responsible.
173
Staff retention
Keeping staff once they have been employed.
174
Stakeholders
Those with an interest in the way that a business operates.
175
Statement of financial position
Reports the assets, liability and equity of a business on a specific date; formerly known as the balance sheet.
176
Styles of management
The methods used by those in leadership roles to achieve the most effective outcomes from the employees for whom they are responsible.
177
Supplier
A business that provides goods/services.
178
Supply chain
The network of organisations, people, activities, information and resources that take the product/service from supplier to customer.
179
Survival
The capacity of a business to stay in business. It is dependent on the business selling sufficient amounts of its goods/services to cover all its costs.
180
Sustainability
The process of operating without damaging the environment or depleting natural resources.
181
Takeover
One business takes control of another.
182
Tall organisational structure
An organisational structure with a narrow span of control and many levels of hierarchy (a long chain of command)
183
Target market
The particular group of customers to which a business aims to sell its product; a particular market segment.
184
Technical economies of scale
The benefits that large businesses gain from having the funds to invest in expensive machinery that brings cost savings.
185
Telesales
Attempting to sell a good/service by making the initial contact by telephone.
186
Tertiary industry
A business that provides services to consumers or other businesses.
187
Total costs
All the costs involved in producing goods/services. Total costs = fixed costs + variable costs
188
Total quality management (TQM)
A philosophy that involves everyone in the business in the quest for continual improvement in the attitudes, practices, structures and systems that combine to create a top-quality product.
189
Trade credit
The process of buying items from a supplier and paying for them later; for example, 30 days after invoice date.
190
Trade descriptions
Protecting customers from false or misleading descriptions about products or their prices.
191
Traffic congestion
The effects of overuse of transport networks, for example slower speeds, traffic queues and longer journey times.
192
Training
Employees learn the skills and techniques needed to do the job or to prepare for a new role.
193
Unique selling point (USP)
The key benefit of a good/service; it differentiates the product from others and will be the focus of advertising and promotion.
194
Unit cost
The average cost of each unit. Unit cost = total cost ÷ quantit
195
Unlimited liability
When the owner(s) are responsible for all the debts of the business. Their personal funds would be used to settle the business’ debts if the business’ funds were insufficient.
196
Variable costs
The costs that change as the business' output changes.
197
Wage
A method of paying employees for their work based on an hourly, weekly or piece of work basis, usually paid weekly or monthly.
198
Wants
Things that people would like to have; not limited to the things they need to survive.
199
Waste
The unwanted material left over from the production process; it may have little or no value and the business may have to pay for its disposal.
200
Wholesaler
A business or person that buys goods in large quantities from producers, stores them in warehouses and sells them on to retailers.
201
Word of mouth
Personal recommendations from satisfied customers to prospective customers.
202
Zero-hour contract
A contract of employment where the employer is not obliged to provide any minimum hours of work; the employee is not obliged to accept any work that is offered.
