A level Flashcards
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.
Fringe benefits
Additional ‘perks’ that are in addition to a wage/salary; they are liable to income tax.
Full time
Working all the usual hours required of an employee; usually 35 hours or more.
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.
Global warming
The steady increase in the earth’s temperature due to emissions and the build- up of greenhouse gases, resulting in climate changes.
Globalisation
The trend for large businesses to operate on a worldwide scale; money, goods and services can be transferred across national borders.
Goods
Items that are produced from raw materials for sale to businesses or consumers.
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.
Growth
A business’ increase in size. Methods include: asset value, employees, market share, markets, profits and sales.
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.
Hierarchy
The management structure of a business/organisation showing the levels of responsibility. It is often shown as an organisation chart.
Hire purchase
Buying items by making a small initial payment and paying the remaining amount in instalments over an agreed period of time.
Import
Good/service bought from a supplier in another country.
Income statement
A summary of the revenue and expenses over an accounting period that lead to a profit or loss position.
Induction
Training given to a new employee when they start a new job; it provides information about the business, its operation and working practices.
Inspection
Testing/examining items to check that materials or items conform to the specified requirements/standards.
Integration
Two or more businesses join together.
Interest rates
The rate charged for borrowing money over a period of time, or the reward for saving money.
Job analysis
The process of determining what the job entails, including responsibilities and tasks.
Job description
A summary of what the job entails, including job title, duties and who they are responsible for/to.
Job production
A method of creating a single product to meet an individual order.
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
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.
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.
Lean production
Continually working to reduce the resources used to create products: raw materials, labour, machines and premises.
Level of employment
The percentage of the population of working age that are employed.
Liability
The extent of the owner’s/owners’ responsibility for the debts of the business.
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.
Loans
A fixed sum of money borrowed for a specified period of time at an agreed rate of interest; repaid in instalments.
Local community
The individuals, other businesses and organisations that are located close to the business. The business interacts with these groups.
Location
The site of a business and the reasoning behind the choice of site.
Logistics
Managing the movement of supplies and products to ensure the timely delivery of supplies to the production process and finished products to customers.
Loss
Where expenditure is greater than income.
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.
Management
Organising and coordinating business activities in order to fulfil production and meet the business’ objectives
Margin of safety
The amount by which current sales exceed the break-even level of output.
Market
Where those wishing to buy goods/services make contact with those who have them to sell
Market research
Collecting information about the customers’ needs, wants and preferences that will help the business to make design, production and marketing decisions.
Market share
The proportion of the whole market for a product that is held by the business.
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.
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.
M-commerce
Business transactions are carried out electronically by mobile phone
Mergers
When two or more businesses agree to join together.
Mortgage
A method of borrowing to purchase property, using the property as security.
Motivation
The reasons people are interested in and committed to their job.
National minimum wage/living wage
The lowest hourly rate that can legally be paid by an employer to an employee.
Needs
The human wants that are essential to survival; clothing, food, shelter, warmth or water.
Net cash flow
The difference between cash inflows and cash outflows. Net cash flow = cash inflows – cash outflows
Noise pollution
A type and level of noise that is excessive and disturbing to people or animals.
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
Objective
A specific statement that defines a precise goal that can be measured and delivered within a given time.
Off-the-job training
Employees are trained away from their job, at a college, training provider or the business’ training centre.
On-the-job training
Employees learn alongside experienced colleagues while they are doing the job.
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.
Opportunity cost
The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.
Organic growth
A business grows by increasing its output, by increasing its customer base or by developing new product(s).
Organisational structures
The way in which the organisation is divided into levels of management, functions and responsibilities.
Outsourcing
Contracting another business to carry out some of the business’ activities, often to reduce costs.
Overdraft
Borrowing from a bank by drawing from a current account so that the balance becomes less than zero.
Part time
Working only a proportion of the full time hours
Person specification
Identifies the requirements of the job holder, including qualifications, experience and skills.
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.
Post-sales servicing
Maintenance or repair of equipment by the manufacturer or supplier during or after the warranty.
PR
Managing the relations with groups such as consumers, the media, pressure groups or investors to present a favourable impression and generate interest
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.
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.
Primary industry
A business that extracts the earth’s natural resources.
Primary research
Collecting information first-hand direct from the public; field research including surveys, questionnaires and testing designed specifically for the market/product.
Private limited company (ltd
A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability
Procurement
The process of buying goods and services including dealing with:
demand
selection of suppliers
analysing and negotiating prices
making the purchase
managing payments.
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.
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.
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
Product portfolio
The range of products offered by one producer.
Product recalls
The withdrawal from sale by the manufacturer of a defective or contaminated item.
Productivity
The amount produced by a worker/machine/factory in a given time; the ability to produce more output with fewer resources.
Profit maximisation
A business’ ability to make maximum profit with low operating expenses.
Profit sharing
A scheme that pays employees an additional amount based on the year’s profits.
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
Promotion
Communicating information about the product to:
make consumers aware of a product
remind customers about a product
persuade customers to buy.
Proximity to market
Businesses that serve their customers directly must be located close to those customers.
Public limited company (plc)
A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability.
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.
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.
Raising finance
Getting the money to pay for starting the business or for developing it.
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.
Retailer
A business or person that sells goods to the consumer.
Retained profit
An internal source of finance; a portion of the year’s profit is kept back to fund projects.
Revenue
The income generated from the sale of goods/services.
Salary
A method of paying employees for their work; based on a fixed annual amount, normally paid monthly.
Scarce resources
When the raw materials that are available are not sufficient to meet needs.
Secondary industry
A business that uses raw materials to manufacture goods or construct items.
Secondary research
Examining information from published sources; desk research using information that has been collected for other purposes.
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.
Selection
The process of choosing which applicant to employ.
Share(s)
The units of the business that are available for sale to investors.
Share issue
New shares in a business made available for the public to buy.
Shareholder(s)
Those people who own shares in a limited company; each shareholder is a part owner of the business
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.
Social objectives
A business’ goals that relate to fair treatment of the people concerned: customers, investors, suppliers or workers.
Sources of finance
Ways of obtaining the funds the business needs; money may be needed to meet short or long term needs.
Span of control
The number of people for whom a manager is directly responsible
