2.1 Growing the business Flashcards
Innovation:
bringing a new idea to the market, such as Warburtons’ clever idea of an extra- large crumpet.
Inorganic (external) growth:
growing by buying up other businesses or by merging with a business of roughly equal size.
Organic (internal) growth:
growth from within the business, such as creating and launching successful new products.
Research and development (R&D):
the scientific research and technical development needed to come up with successful new products.
Takeover:
obtaining control of another business by buying more than 50 per cent of its share capital.
Merger:
when two businesses of roughly equal size agree to come together to form one big business.
Flotation:
listing company shares on the stock market, allowing anyone to buy the shares. This means the price can float freely (up and down).
Public limited company (plc):
a company with at least £50,000 of share capital that can advertise its shares to outsiders and is, therefore, allowed to fl oat its shares on the stock market.
Entering markets:
when a company decides to open up in a market it hasn’t been in before, for example Walkers launching
cereal bars.
Exiting markets:
choosing to leave a market, probably because it was loss-making and looked set to continue.
Competing internationally:
finding a way to succeed against rivals from overseas.
Globalisation:
the increasing tendency for countries to trade with each other and to buy global goods, such as Coca-Cola, or services, such as Costa Coffee.
Free trade:
trade between countries with no barriers, for example no tariffs.
Imports:
goods or services bought from overseas.
Trade blocs:
a group of countries that have agreed to have free trade within external tariff walls.
Tariffs:
taxes charged only on imports.
Ethical considerations:
thinking about ethics, which may lead to morally valid decisions or may lead to the manipulation of customer
attitudes (that is, pretending to be ethical).
Ethics:
weighing up decisions or actions on the basis of morality, not personal gain.
Fair trade:
a social movement whose goal is to help producers in developing countries achieve better trading conditions and to promote sustainability. It ensures that the price paid is high enough to allow fair wages to be paid to the workers who produced it. Fair trade certification can be found on many products, including KitKats.
Trade-offs:
how having more of one thing may force you to have less of another; for example, higher ethical standards may mean less profi t.
Environment:
the condition of the natural world that surrounds us, which is damaged when there’s pollution.
Environmental considerations:
factors relating to ‘green’ issues, such as sustainability
and pollution.
Sustainability:
whether or not a resource will inevitably run out in the future; a sustainable resource will not.
