Business WJEC GCSE Key Terms Flashcards
1
Q
Backward vertical
integration
A
When the suppliers of a business are taken over by that business.
2
Q
Advertising media
A
The various places where advertisements may be found such
as television, newspapers or the internet.
3
Q
Procurement
A
Obtaining or buying of goods and services from an external source. These are to be used in the production process or are to be sold on.
4
Q
Diversification
A
Diversification allows a business to enter a different market in addition to the one they are already involved. This enables the business to spread its risks should the original business fail.
5
Q
Feedback
A
The response by a customer following the purchase of a good or service. This will be used by the producer to improve what has been produced.
6
Q
Objective
A
a short or medium term target of a business needed to reach its aim. An objective might be to increase sales by 20% in the next 5 years.
7
Q
Total revenue
A
The full amount of money taken in by a business when selling all its goods in a particular period. It is calculated by multiplying the selling price by the number of goods sold.
8
Q
Total cost
A
The full amount of money spent by a business when producing the goods sold in a particular period. It is calculated by adding its fixed costs to its variable costs.
9
Q
Profit sharing
A
An additional reward paid to workers to reflect the profits earned by the business.
10
Q
Piece rates
A
Piece rates are paid to workers based on the number goods which are produced.
11
Q
Performance related pay
A
An additional payment to workers who reach or exceed targets set in advance by the management.
12
Q
Revenue
A
The amount of money taken in by a business when selling a good or service.
13
Q
Workforce
A
The people who are working or looking for employment.
14
Q
Sales process
A
A series of steps taken from when the potential buyer meets the prospective seller until after the final sale is made.
15
Q
Business plan
A
Helps in decision making by showing the aims and objectives of a business and the strategies and requirements needed to achieve these. It also provides information to banks and other possible providers of finance to persuade these to grant loans and other monies to the business.
16
Q
Curriculum vitae (CV)
A
Written by a person looking for employment. It outlines that individuals personal details, qualifications, experience and interests in the hope that these impress a possible employer.
17
Q
Induction training
A
Used when new workers are employed so that they become familiar with their new surroundings and the specific methods and policies of the particular business.
18
Q
SMART objectives
A
An acronym used as a guide to setting business objectives. It stands for Specific Measurable Agreed Realistic Timed.
19
Q
Fixed cost
A
Costs which always stays the same no matter how many goods are produced.
20
Q
Focus groups
A
Consumers brought together by businesses to discuss their reactions to products before they are launched.
21
Q
Logistics
A
The management of the movement of goods from where they are to where they are needed: often between the manufacturer and the consumer.
22
Q
Loss leaders
A
Products put on sale, usually in supermarkets, at prices which make no profits and may even make losses in order to attract customers into the shop to buy other goods.
23
Q
Primary research
A
Collecting original information for a specific purpose: this is often called field research.
24
Q
A
25
Wholesaler
A wholesaler buys goods from the manufacturer and sells these goods in smaller quantities to retailers.
26
Zero hours contracts
a situation where employers do not offer a minimum number of hours to be worked and employees do not have to accept work being offered. This is of particular value to businesses where the demand may vary from day to day, such as those involved in retailing or catering.
27
Stakeholders
Individuals and organisations who are affected by the decisions and actions of a particular business.
28
Product saturation
The point in the product life cycle where the market is full as competitors introduce similar products.
29
Single market
Countries joining together in trade as if they were one country, so there are no trade barriers such as customs duties when goods cross borders within the market. An example of a single market is the European Union.
30
Franchisor
A business which allows a franchisee to sell using their processes, experience and name in return for royalties.
31
Distribution
Materials being transported or moved to the producer or the final product being moved to the consumer.
32
Penetration pricing
A pricing strategy which involves setting a low price for a new product to encourage sales. The price may be reduced later with increased customer loyalty and market share.
33
Price
The amount of money a business wants to receive in order to sell a good or service or the amount of money the consumer is willing to pay to buy that product.
34
Mass (flow) production
A method of production where goods are produced continuously usually on a production line.
35
Quality control
Inspecting a sample of goods produced at the end of the production process to ensure that specifications have been met. Goods which do not meet the standards are scrapped or are sold as seconds.
36
Psychological pricing
A pricing strategy which involves offering goods at prices below whole number such as £5.99 or £499, or using words such as "only". It is hoped that the consumer will believe that the product is much cheaper than if the price had been £6 or £500.
37
Gross profit
The profit made before expenses have been paid. It is calculated by subtracting the cost of goods sold from the total revenue from selling those goods.
38
Contribution
Is the amount taken from the cost of selling every good used towards paying the fixed costs of producing that good. Contribution per good is selling price minus the cost of the good.
39
Person specification
Used in the recruitment process for the employers to outline the type of person they would like to employ. It will outline skills, qualifications and experience required.
40
Product launch
The point at which a product is put onto the market.
41
Cash
Money held by the business or in its bank accounts.
42
Quality
Meeting a standard for a good or service to meet consumer needs and expectations.
43
Chain of command
The path along which orders pass within a business from the management to the shop floor.
44
Retailer
A retailer sells goods to consumers. Small retailers buy their stock from wholesalers but large-scale retailers buy directly from manufacturers.
45
Unique selling point (USP)
What makes a product different from ones sold by competitors. It may involve the lowest price, the best quality or the first of its kind.
46
Product growth
Part of the early stage of the product life cycle when sales and profits are rising.
47
Product decline
The point in the product life cycle where sales fall and may eventually cease.
48
Sole traders
Businesses owned by one person who has unlimited liability. Other people can be employed but there is only one owner.
49
Forward vertical integration
When a business takes over another business to
control the direct distribution of a businesses' products.
50
Time rates
Time rates are paid to workers based on the number of hours worked.
51
Marketing mix
The combination of factors which help a business to sell its products. It is usually considered to involve the 4Ps of product, price, promotion and place.
52
Secondary research
Using information which already exists: this is often called desk research.
53
Ethics
A business doing what is morally right for its stakeholders.
54
External growth
Increasing the size of a business by buying other businesses.
55
Hierarchical (tall) structures
Organisational charts where there are many levels of hierarchy. In these organisations, there are usually many managers, and each manager has a small span of control.
56
Off-the-job training
Off-the-job training happens outside the workplace of the employee often in colleges.
57
Bank loans
Long to medium term loans that can be used to buy producer goods. The goods become the property of the business immediately but failure to repay the loan to the bank could lead to the business being closed down.
58
Distribution channels
The routes which goods follow between the manufacturer and the consumer. The route may be direct between the two but the interaction of middlemen is more likely.
59
Customer service
The interaction between the business and the customer in which the business understands consumer needs before, during and after the sale of a good or service. Positive reactions to service can provide benefits for the businesses in relation to reputation and future sales.
60
Social enterprises
Businesses which operate for the benefit of the community or its workers or as a charity.
61
Job description
Used in the recruitment process when employers outline what is involved in the work to be done by newly appointed workers. It may include job title, pay, hours to be worked, holidays etc.
62
Leasing
A system of renting an asset to a business. The asset remains the property of the company renting out the good.
63
Digital adverts
Using internet technologies to provide a range of advertising including using e-mail, social media messages and banner advertisements on mobile phones and websites.
64
Extension strategies
A number of methods businesses might use to prolong the life cycle of their products. These will be related to marketing mix strategies.
65
Durable goods
Consumer goods which are not used at once and do not have to be bought frequently because they last for a long time.
66
Overtime pay
Ovetime pay is paid to workers according to the number of hours worked above their contracted hours.
67
Franchisee
A business which pays royalties for the right to sell goods or services using established processes and under the name of another business.
68
Job production
The manufacture of an individual good from start to finish. Each product is different and offers a unique good for the consumer or meets specific consumer requirements.
69
Venture capital
Private investors providing capital to new or small businesses which have the potential for growth.
70
Consumers
The final users of goods and services. They are at the end of the distribution channel.
71
Location
A geographical area where businesses may be found.
72
Warehouse
A place where resources or finished products are stored before they are sold.
73
Non-durable goods
Goods which are immediately consumed or which have a lifespan of less than three years.
74
Competitive environment
Where there are a number of businesses attempting to persuade consumers to buy their products. Such competition will be based on such factors as price, design and quality.
75
Limited liability
The owners of a business are not responsible for the debts of a business. Personal belongings will not need to be given up to pay the debts of the business. The owners however will lose the money they invested in the business if it fails.
76
Organic (internal) growth
Increasing the size of a business by increasing its sales, revenue, profits and work force.
77
Consumer panels
Consumer panels are recruited by research companies to represent the views of consumers in a particular sector. They will be asked to comment on such things as product design and taste or on the branding and advertising of products.
78
Span of control
The number of people an individual is personally responsible for in a business organisation.
79
Salaries
Salaries are generally paid to administrative and management workers. The salary is based on their work for the year.
80
Overdrafts
A form of short term loan provided by banks to cover cash-flow difficulties of businesses. The business is allowed to take more from its account than is in the account. When cash is paid into the account, the overdraft will be cleared.
81
Horizontal integration
The buying or merger of other businesses producing the same or similar products.
82
Batch production
When a small number of identical products are made at once. Batches can be made as often as required.
83
Price discrimination
A pricing strategy which involves setting different prices to different market segments.
84
Profit
The difference between the total revenue of a business and the total costs of a business, when revenue is greater than cost. It is important in being precise in using this term: stating “money made” can be confusing.
85
Qualitative data
Descriptive information found by experiences or in textbooks or newspapers or reports. It can include opinions and cannot be quantified by numbers.
86
Franchise
The right given by one business to another to sell goods or services using its name. They should be seen as a method of growth for the franchisor and a business opportunity for the franchisee rather than a type of business organisation.
87
Market segment
A part of the market which contains a group of buyers who are similar. Markets can be segmented on the basis of characteristics such as age, gender, income, where they live, their cultural and ethnic backgrounds and so on.
88
Market research
The way in which information and data is gathered about consumers, competitors and market trends.
89
Niche markets
Those involving a small segment of the population. All marketing efforts for a particular product are aimed at that market.
90
Vertical integration
The buying or merging of businesses at different stages of production so that the supply chain may be controlled by the business.
91
Search engine advertising
A form of online marketing which places advertisements on web pages showing the results from search engine queries.
92
Internal (organic) growth
Increasing the size of a business by increasing its sales, revenue, profits and work force.
93
Product differentiation
Distinguishing a product or service from others. By making a product different or appearing to be different from similar products sold by rivals, a business will hope to attract more customers.
94
E-commerce
The buying and selling of goods and service via the internet.
95
Consumer goods
Goods which are produced for the final consumer.
96
Entrepreneur
A person who sets up a business by taking on the financial risks in the hope of making a profit.
97
Globalisation
The increased interdependency of people around the world as a result of increased trade and cultural exchange. It has led to an increased worldwide production of goods and services.
98
Trade credit
A system of interest free short-term credit for the purchase of non-durable goods. These will need to be paid for usually within one month.
99
M-commerce
Mobile commerce involves buying goods and services through hand held mobile devices such as smartphones.
100
Variable cost
The cost which varies with the number of goods produced.
101
Home working
Workers do not have to attend a workplace every day. Modern communication technology means that work can be carried out at home and can even be monitored from the workplace.
102
Net profit margin
The net profit expressed as a percentage of sales. It is calculated using the formula:
Net Profit Margin = Net Profit/Sales x100
103
Quantitative data
Quantitative data deals with measurements and figures perhaps shown in tables and graphs. It includes numerical data that can be given values and is easier to interpret and evaluate compared to qualitative data.
104
Private limited companies
Businesses which are owned by shareholders who have limited liability. Their shares are not available to others except with the agreement of other shareholders. They are generally recognised with Ltd after the business name.
105
Product maturity
The point in the product life cycle where sales reach their peak.
106
Public limited companies
Businesses which are owned by shareholders who have limited liability. Their shares are available to others by selling to the general public often at the Stock Exchange. They are generally recognised with plc after the business name.
107
Co-operatives
Generally seen as social enterprise businesses owned by the employees or, most commonly, their customers.
108
Sustainability
Businesses acting in a responsible manner and to ensure that our environment and resources are available for future generations to enjoy.
109
Flat (horizontal)
structures
Organisational charts where there are few or no levels of middle management between staff and executives.
110
Social media
Websites and applications which allow users to create and share information, ideas and interests with other individuals, communities and networks.
111
Manufacturer
The maker of products.
112
Flow (mass) production
A method of production where goods are produced continuously usually on a production line.
113
Partnerships
Businesses owned by between 2 and 20 who generally have unlimited liability.
114
Personal services
Those services provided for individuals. They include services for personal grooming, house maintenance, car repair etc.
115
Multi-channel distribution
A business using more than one channel to distribute its goods perhaps through traditional shops and catalogues and online.
116
Product life cycle
The stages a product passes from its earliest development until it is no longer available on the market.
117
(Price) Skimming
A pricing strategy which involves selling a product at a high price in order to earn high initial profits. Profits may be reduced later to increase sales at the lower prices.
118
Multinational companies
Businesses with their headquarters in one country but which operate in other countries through their offices, factories and shops. A company which just sells goods abroad is not a multinational company.
119
Blogs
Provide information and allow discussion on the internet with other users producing their own entries or posts.
120
Commercial services
Services that provide mainly to businesses such as transport and warehousing but they may also be available to individuals such as insurance and banking.
121
Promotion
Information and techniques used by businesses to make consumers aware of products and to persuade them to buy those products now and in the future.
122
Unlimited liability
Unlimited liability means that the owners of a business are responsible for all of the debts of a business. Personal belongings may need to be given up to pay the debts of the business.
123
Supply chain
A complex system of businesses, people, activities, information and resources involved in moving a good or service from source to customer.
124
Turnover
An alternative term for revenue.
125
Site
A specific place within a geographical area.
126
Wages
Generally paid to shop and factory floor workers based on time rates and / or piece rates.
127
Fringe benefits
Rewards to workers not shown in their traditional pay. Such benefits may include company cars or discount on company products.
128
Business angels
Wealthy individuals who invest their private capital into start-up businesses in return for a share in the business.
129
Flexible hours
A working practice in which workers are no longer in their offices between two set times. Many can now work a full day within a range of hours set by the employer.
130
Cost
The amount of money used to buy a good or service.
131
Just-in-time
Businesses who adopt the idea to keep their stocks of finished goods and / or of materials to a minimum. Goods will only be produced when orders are received and / or materials are only received when they are needed. This process saves storage costs and avoids having assets tied up in stocks.
132
Hire purchase
A system of credit whereby the borrower pays a deposit to be able to use a good for a set period of time. During this time instalments are paid to cover the cost of the good plus interest. The good becomes the property of the buyer when the final payment is made. Non-payment means that the good can be taken back by the lender.
133
Internal economies of scale
The benefits a business gains as a result of being large. All costs can be spread between the large number of goods produced so the cost per good is lower than for smaller businesses.
134
On-the-job training
On-the-job training happens within the workplace of the employee.
135
Producer goods
Goods which are produced for other businesses to be able to produce other goods and services.
136
Cost plus pricing
A pricing strategy which involves the producer adding a sum of money (the profit per good) to the cost of producing goods to determine the selling price of the good or service.
137
Intellectual property
Property which cannot be seen or touched but is the result of the creativity of an individual or group. Just as goods need to be protected from theft and damage so intellectual property is protected by patents and copyrights.
138
Product portfolio
The collection/range of all the goods and services offered by a business.
139
Gross profit margin
the gross profit expressed as a percentage of sales. It is calculated using the formula:
Gross profit margin = gross profit/sales x 100
140
Break-even
Where the total amount of money taken in by a business is the same as the amount of money paid out. Neither a profit nor a loss is made where total revenue equals total cost.
141
Job sharing
Instead of one worker doing one job on a full time basis, the work will be carried out by more than one person on part time basis. This is particularly important for workers with family responsibilities.
142
Footfall
The number of people passing close to the business. These are potential customers of that business.
143
Cash-flow forecast
Cash-flow involves the difference between the inflow and outflow of cash in a business. In a cash-flow forecast businesses predict what they expect to happen to their cash-flow in the future.
144
Place
Where the product is available for the consumer to purchase. Place could include shops, markets, telephone sales, the internet and so on.
145
Net profit
the final profit made by a business after all costs have been paid. It is calculated by:
Net profit = gross profit minus expenses
146
Aim
The long term objective of the business. Its aim might be to become the biggest business in its sector.
147
Competitive pricing
A pricing strategy which involves the producer offering goods for sale at a price at or below that set by competitors.
148
Pop-up adverts
A form of online marketing which place new browser windows on computer screens.
149
Quality assurance
A guarantee given by producers to consumers that certain standards have been met throughout the production process. Legal standards have been met and / or codes of practice have been followed.
150
Product
The good or service provided by a business.
