Business 2.1 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.
Merger
when two businesses of roughly equal size
agree to come together to form one big business.
Organic (Internal) growth
growth from within
the business, such as creating and launching
successful new products.
Research and development
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.
Flotation
listing company shares on the stock market, allowing anyone to buy the shares. This means
the price can fl oat freely (up and down).
Public limited company
a company with at least £50,000 of share capital that can advertise its
shares to outsiders and is, therefore, allowed to float 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.
Free trade
trade between countries with no barriers, for example no tariffs.
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.
Imports
goods or services bought from overseas.
Tarriffs
taxes charged only on imports.
Trade blocks
a group of countries that have agreed to have free trade within external tariff walls.
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
certifi cation 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 profit.
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.
