business keywords paper 1 Flashcards
business
an organisation that produces a good or supplies a service and sells it for a profits e.g. tesco
entrepreneur
someone who takes a risk with their money and time to start a business e.g. steve jobs
business plan
documents that outlines what a business is all about. it will include sections about finance or marketing
sole trader
business owned by on person who keeps all the profit e.g. hairdresser
unlimited liability
if the business becomes bankrupt the owner’s personal possessions are used to pay off outstanding debts e.g. house
limited liability
if the company becomes bankrupt the shareholders personal possessions are not at risk to pay off outstanding debts
partnership
businesses owned by 2-20 people and all the profits and debts are shared between the partners e.g. solicitors
silent partners
people that have bought a share in the partnership but aren’t involved in the day to day running of it
private limited companies (LTDs)
a company owned by shareholders. it has shares sold to friends and family and not open for sale to the public. e.g. Nike
dividends
all limited companies may share their profits with their shareholders. % of a profit the company makes
public limited companies (PLCs)
a company owned by shareholders, shares in the company are openly traded on stock exchange and can be bought by the public e.g. Barclays plc
aims
states the overall purpose for the business,
long term goals e.g. sell more iphones (apple)
objectives
specific measurable targets to help meet the aims of the business
shareholders
the ownership of a limited company is divided up into equal shares so whoever has a share owns a part of the company.
profit
revenue - cost
revenue
price x quantity
raw materials
inputs that a business uses to make a product they sell e.g coco beans and sugar to make dairy milk chocolate
company
a firm/ organisation which is owned by shareholders that is registered at the companies house e.g. Dyson
costs
expenses a business has to pay e.g. rent
market share
portion of the market controlled by a particular company e.g. tesco has the largest in the uk
stakeholder
a person that is affected by what the business does e.g. employees
market share formula
business A sales/ total market sales x 100
EOS (economies of scales)
when the average costs of producing each item falls as output increases
diseconomies of scales
when the average costs increases as output decreases
purchasing EOS
large firms buy materials in larger amounts in order to gain discounts
risk-bearing EOS
large businesses are more likely to have a large product portfolio which reduces the risk if one of the product’s market goes down.
technical EOS
large businesses are more likely to afford equipment and also use it effectively to make more products safely
expenditure
costs of things that businesses have to pay .e.g. rent
redundancies
when employees are laid off
organic growth
achieved by the business selling more products and not taking over another business e.g. post office
external growth
when a business buys other companies to increase sales and profit e.g.Amazon bought whole foods
takeover
when a business buys more than 51% of the shares of another company
merger
2 businesses join together to form another business
horizontal intergration
one firm takes over another firm in the same industry
vertical intergration
one firm takes over another firm in the same industry but at different stages of production
organisational structure
diagram that shows the employees organised and who each worker reports too and who each manager is responsible for
span of control
number of subordinates a manager is directly responsible for
chain of command
route communication take as it flows through a business, from top to bottom
tall structure
organisational structure which has many layers, long chain of command and a narrow span of control
flat structure
organisational structure which has few layers, show chain of command and a wide span of control
workforce planning
when the HR manager organises what all employees will be doing over the next few years e.g.how many staff are required
delegation
when the line manager gives their subordinate a task
flexible working
either the employee or employer have some choices about actual hours worked but core hours must be worked
zero hour contract
employees are not guaranteed set number of hours to work each week e.g. call centres
human resources (HR)
department within a business responsible for the recruitment, selection, training and administration
full-time worker
works full number of hours in a werk (35hours)
part-time
employee who works any number of hours less than 35
permanent contract
employed by an organisation indefinitely until they leave, retire or are made redundant
internal communication
how messages are sent and received by employees e.g. face to face
recruitment
process of identifying the need for a job, defining requirements of the position and the job holder
selection
advertising the position and choosing the most appropriate person to fill the vacancy
job analysis
when a vacancy arises in an organisation it will decide whether the job is still required
job description
document that details the roles and responsibilities of the vacant position e.g. duties, work hours etc
on the job training
employees receive training whilst remaining in the workplace e.g. learning to use teams
off the job training
employees are taken away from their usual place of work to be trained e.g. colleges
training
process of increasing the knowledge and skills of the workforce to enable them to perform their jobs effectively
induction training
training that an employee receives when they first join a business
person specification
document that helps the business to decide which applicant is the most suitable to fill the vacancy e.g. qualifications
interviews
face to face meeting between the HR manager and candidate where questions are asked
motivation
how willingly and happy and employee is to work e.g. Google offers company cars
retention
when employees stay with a firm for a long period of time
salary
fixed amount is paid by the employer to the employee on a regular basis (monthly)
wage
workers are paid weekly or monthly by the hours of time worked
promotion
when an employee advances in an organisation to a higher job in the hierarchy and salaries and responsibilities increase
job enlargement
gives staff a greater variety of tasks to perform
job enrichment
gives staff more responsibilities to to do and wider range of tasks
employment law
law’s to do with employees businesses have to follow
legislation
the government makes laws in order to control the businesses actions to protect needs of stakeholders
national minimum wage act 1998
business must pay at least a minimum wage per hour for a job (16-24)
national living wage
25 or over mist be paid at least the national living wage
equal pay act 1970
unlawful to discriminate between men and women in terms of pay and working conditions
sex discriminate act 1975
unlawful to discriminate because if gender/marital status
race relations act 1976
unlawful to discriminate because of race, colour, nationality, ethnicity or beliefs
disability discrimination act 1995
unlawful to discriminate because of a person’s disability- reasonable adjustments should be made .e.g. wheelchair ramp
employment rights act 1996
terms and conditions of employment should be laid out in a single document
health & safety work act 1974
businesses must provide for the health and safety of employees in the workplace
marketing
process of identifying, predicting and satisfying customer needs profitably
identifying
finding out by using market research about current products and markets
anticipating (predicting)
analysing the data collected and using the managers skills to judge what might happen in these markets
satisfying
making sure customers are happy with what they are buying
market research
when the entrepreneur gathers information about the market to make decisions
primary research (field)
data collected first-hand by the entrepreneur for a specific research purpose
secondary research (desk)
data that already exists that has been collected for a different purpose
questionnaires
PR-document given to customers to find out their opinions and things about them
focus groups
PR-small groups of people who represent the target market for a good/service
trialing
PR-when customers are allowed to use a good/service
census
SR-government questionnaire done every 10 years which all households must do. Gives demographic info about people
trade magazines
SR-specially designed magazines for an industry
mass market
products that are targeted at everyone e.g. electricity
niche market
aiming products at a specific market segment e.g. dentures
market share formula
business A sales/total market sales x 100
quantitative data
numerical data normally done online or face-to-face
qualitative data
data based on opinions, attitudes and beliefs
product life cycle
model which describes the stages a product goes through over its life
extension stratergies
to keep the product on the market for longer extension strategies are adopted at point of maturity
invention
creation of an entirely new product or process
innovation
when an existing product or service is improved
marketing
selling the right product in the right place at the right price and promotion
market segments
groups of customers within a market who have similar interests
market share formula
business A sales/ total market sales X 100
market growth formula
change/original X 100
price skimming
setting a high price before other competitors come into the market
price penetration
pricing strategy where the price of a product is initially set low and then rises
cost plus
setting a price based on cost but adding a fixed amount of profit or % to the cost of making/buying the product
competitor pricing
pricing products based on what competitors price them slightly cheaper
promotional pricing
when a full priced item goes on sale
channel of distribution
path a product takes from producer to consumer
intermediaries
businesses between producer and consumer
promotion
using techniques to make customers aware of products
sales promotion
methods used by the marketing manager to sell products in a direct way which is easy to arrange
point of sale
place where a retail transaction takes places
goods
physical product that have a value and can be bought and sold
services
non-physical products which help to improve our lifestyles and can also be bought and sold
conglomerate integration
firms buying another firm in a different industry
