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unit 7 external environment Flashcards

1
Q

average rate of return

A

average annual profit as a percentage of the initial investment

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2
Q

ARR

A

total net cash flow ÷ no of years / initial investment X100

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3
Q

barrier to entry

A

factors that make it difficult / impossible to enter an industry

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4
Q

boom

A

above trend growth of GDP

• characterised by high consumer / business confidence, high investment rising prices, low unemployment

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5
Q

BRIC economies

A 
four large emerging economies
Brazil
Russia
India
China
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6
Q

budget deficit

A

taxation receipts are less than government spending

boosts overall demand for firm’s products

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7
Q

budget surplus

A

taxation receipts greater than gov spending

reduces demand in economy

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8
Q

business (trade) cycle

A

regular fluctuation of income and output (GDP) within an economy over time
boom, recession, slump, recovery

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9
Q

carroll’s csr pyramid

A 
sets out priorities for business to become good corporate citizens
philanthropic
ethical
legal 
economic
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10
Q

cartel

A

formal / written agreement to restrict competition and boost profits

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11
Q

competitive advantage

A

distinctive feature that gives a firm an edge over rivals

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12
Q

competition and markets authority

A

main UK organisation set up by gov to enforce competition law / tackle constraints on competition
investigate mergers / monopolies / firms who abuse market power

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13
Q

competition policy

A

gov action to prevent abuse of monopoly power and restriction of competition
policy focused on monopoly / mergers/ restrictive practices

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14
Q

conflict of interest

A

diff individuals / stakeholders want diff outcomes / decisions to be made

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15
Q

contractionary policy

A

leads to reduction in demand within economy due to gov action
higher interest rates / taxation / lower gov spending

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16
Q

core competencies

A

key area of strength for the business

gives competitive advantage

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17
Q

corporate objectives

A

specific time based targets relating to the role business

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18
Q

cost push inflation

A

general rise in prices cause by an increase in costs

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19
Q

CSR

A

commitment to behave ethically and contribute to economic development
improve quality of life of workforce / wider community

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20
Q

CPI (consumer price index)

A

measures average change month to month in prices of consumer goods
using typical basket of items

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21
Q

customs union

A

group of countries that do not impose tariffs (taxes on imports) on each other’s goods
agree to impose common external tariffs on goods outside customs union

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22
Q

demand pull inflation

A

general rise in prices due to nationwide rise in demand for products

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23
Q

disposable income

A

the amount of income available to spend after taxes / benefits have been dealt with

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24
Q

disposable income =

A

gross income - direct tax + state benefits

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25
disruptive technology / innovation
introduction of a new process / product that radically changes competitive advantage of an existing market
26
economic growth
rise in the real GDP meaning an increase in the amount of goods / services produced per head of population over a period of time
27
Elkington's triple bottom line
accounting framework in which businesses assed not only financial impact but social / environmental impacts people, profit, planet
28
emerging market
country whose GDP is growing faster than average and has potential for further growth
29
enterprise finance guarantee scheme
gov loan guarantee scheme to help provide additional lending to viable small / medium sized enterprises that lack adequate security of track record for a commercial loan
30
enterprise policy
gov action to encourage the start up of new businesses and health / growth of young businesses
31
environmental audit
check up on the level of pollution emissions / wastage / energy consumptions / recycling levels and use of non renewable resources of a firm
32
exchange rate appreciation
a rise in value of the currency compared to other currencies
33
exchange rate depreciation
a fall in the value of the currency compared to other currencies
34
expansionary economic policy
any gov action that stimulates the increase in GDP
35
fiscal policy
government spending and taxation to influence the economy
36
functional decision making
policies and tactic adopted by the individual business departments
37
globalisation
growing trend towards worldwide markets in products / services / capital / labour unrestricted by barriers increasing integration go worlds regional / local economies into single international market
38
greenwash
broadcasting of misleading information by an organisation to conceal its abuse of the environmental order in order to present a positive public image
39
GDP
total value of goods and services produced by a nation within a year
40
hedging
any technique designed to reduce / eliminate financial risk | • insuring against future exchange rate changes
41
income elasticity of demand
shows how income changes affect demand for certain goods
42
YED
% change in q / %change in income
43
inferior good
a good for which demand falls as income rises | negative YED value
44
inflation
sustained increase in average prices of goods / services | represents a fall in the purchasing power of money
45
inflation target
level of inflation that the gov expects bank of England's monetary policy committee to achieve through ue of monetary policy
46
infrastructure
physical organisation of structures / facilities needed for the operation of a society social capital assets business operations
47
investment appraisal
judging the attractiveness of a plan to generate future income
48
Kaplan and Norton's balanced scorecard
``` strategy performance management tool that focuses on a broader range of KPIs financial performance customer perspective internal business process performance learning / growth perspective ```
49
m commerce
buying and selling of goods and services through mobile devices
50
mission statement
memorable sentences that encapsulate the key reason that the business exists • for employees
51
monetary policy
control of interest rates / money supply in order to influence level of spending in economy
52
multi channel
marketing strategy that offers customers choice of ways to buy products
53
new enterprise allowance
gov scheme to support new business grant loan helps start up costs (repaid within 5 years) offered a mentor
54
normal good
a good for which demand rises as income increases | positive YED
55
oligopoly
market wherein an industry is dominated by a small number of businesses who are inter-dependent free trade
56
open trade
no discrimination against imports from exports to foreign jurisdictions free trade
57
payback
time taken to recover cost of investment
58
philanthropy
desire to promote the welfare of others desire to promote ethical practice donation
59
porter's generic strategies
``` 4 general ways to gain competitive advantage cost leadership cost focus differentiation differentiation focus ```
60
porter's 5 forces
``` framework for analysing level of competition and profitability within an industry contestability alternatives buyer power supplier power ```
61
pressure group
an organisation whose members have a common cause, seek to influence political / corporate decision makers to achieve a declared objective
62
prime mover advantage
benefit of being the first business to produce a product / enter a market
63
protectionism
attempt by gov to impose restriction on trade in goods / services tariffs / quotas
64
quantitative easing
increasing of money supply by electronic money creation | gov use this money to buy bonds to reduce long term interest rates / encourage private banks to lend more

business a-level (10 decks)

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