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DEFINITIONS Flashcards

1
Q

adding value

A

the process of increasing worth of a product or service

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2
Q

adverse variance

A

a difference between actual and budgeted amounts.

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3
Q

autocratic leadership

A

leadership style of the manager makes all of the decisions

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4
Q

bank overdraft

A

borrowings from a bank on a current account which are payable on demand.

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5
Q

batch production

A

method of production whereby a number of identical products are produced.

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6
Q

boston matrix

A

a model which analyses the product portfolio of a business into 4 categories (stars, cash cows, problem children, and dogs)

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7
Q

branding

A

the use of a trade name, symbol, logo, or other device to differentiate a product or service.

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8
Q

break - even

A

the point at which the total sales of a business equal total costs - i.e. the business is making neither a profit nor a loss.

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9
Q

budget

A

a detailed plan of income and expenses expected over a certain period of time.

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10
Q

business cycle

A

the changes and fluctuations in economic activity that the economy undergoes over a period of time.

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11
Q

capacity utilisation

A

the proportion of total capacity that is used.

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12
Q

cash flow

A

the movements of cash into and out of a business

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13
Q

cash flow forecast

A

a weekly or monthly projection of the likely cash inflows and outflows in a business.

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14
Q

cell production

A

method of production whereby production is split up into self-contained units.

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15
Q

centralisation

A

organisational structure where all decision making is made at the top of the hierarchy.

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16
Q

competition

A

the businesses that compete for a share of the market.

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17
Q

competitiveness

A

the ability of a business to offer a better product than competitors.

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18
Q

contribution

A

the difference between total sales and variable costs.

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19
Q

demand

A

the amount of a product or service that a customer is willing to pay at a given time.

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20
Q

decentralisation

A

organisational structure where decision making is passed down the hierarchy.

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21
Q

democratic

A

managment leadership style whereby the manager involves employees in the decisions making process.

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22
Q

distribution channel

A

how a business gets its products to the end consumer.

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23
Q

dividend

A

a payment that is made by a company to its shareholders for the profits earned.

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24
Q

elasticity of demand

A

the responsiveness of demand to a change in price or income.

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25
entrepreneur
a person who sets up a business and assumes all the risks and rewards.
26
exchange rates
the rate at which one currency can be converted into another currency.
27
favourable variance
a difference between actual and budgeted results which is good news e.g. higher than budgeted revenue.
28
franchise
form of business whereby one business allows another business to sell their products in return for a fee.
29
fixed costs
costs do not vary with the level of output.
30
flow production
method of production whereby there is a continuous movement of items through the production process in the warehouse or facility.
31
gross profit
revenue minus cost of sales in a business
32
income elasticity of demand
the responsiveness of demand to a change in income.
33
inflation
an increase in the general prices of goods and services over a period of time.
34
interest rates
the costs of borrowing money or the return of investing money.
35
job production
method production whereby one of items are produced to specific requirements.
36
just - in - time
a method of inventory control whereby inventory arrives just at the time it is needed.
37
kaizen
the process of continuous improvement
38
laissez - faire
a hands off approach to management
39
lean production
a method of production that aims to reduce waste.
40
legislation
the act of making and enacting laws.
41
limited liability
shareholders are only liable for the money they have invested - not for the overall debts and liabilities of their company.
42
liquidity
the ability of a business to pay its debts.
43
market share
the share of the total market that is owned by a particular business, product, or brand.
44
market segmentation
the process of diving a market into smaller sections which contain customers with similar needs and wants.
45
margin of safety
the difference between the actual level of output and the break even output.
46
market research
the process of planning, collecting, and analysing data relevant to help make marking decisions.
47
marketing mix
the set of marketing tools that the firm uses to persue its marketing objectives.
48
mass market
describes the largest group of customers with specific needs and wants in an industry.
49
niche market
a focused segment of a larger market sector which is possible to target.
50
operating profit
gross profit minus admin costs.
51
organisational structure
the way that the roles and responsibilities within an organisation are structured.
52
outsourcing
the delegation of business process to a third party.
53
partnership
a business owned and controlled between 2 and 20 people.
54
paternalistic
method of leadership whereby the leader decides what is best for the employees.
55
penetration pricing
pricing strategy that involves the setting of lower rather than higher prices in order to achieve a large market share.
56
price skimming
pricing strategy where a higher price is charged for a new product to take advantage of customers prepared to pay for innovation.
57
price elasticity of demand
the responsiveness of demand to a change in the price of a product.
58
primary research
the market research that involves the collection of data that does not yet exsist.
59
private limited company
a business owned and controlled by shareholders who's shares cannot be publicly traded.
60
product differentiation.
making a product different from its competitors.
61
product lifecycle
a theory which predicts the stages a product goes through from introduction to withdrawal from the market.
62
product portfolio
the collection of products and brands owned and operated by a firm.
63
productivity
measures of output per worker over a given time period.
64
profitability
the ability of business to generate profit from its activities.
65
public limited company
a business who's shares can be traded and sold to the public.
66
qualitative research
market research concerned with collecting data on attitudes, research opinions, beliefs, and intentions etc.
67
quality
where a product meets customers requirements.
68
quality assurance
organising every process to get the product right first time and prevent mistakes ever happening.
69
quantitative research
market research concerned with collecting data that can be research quantified e.g. sales and statistics.
70
sales forecasting
the process of estimating future sales.
71
sample
in market research, a sample is a subset of a population.
72
sole trader
a one person business with unlimited liability for the debts of that business.
73
span
the number of employees who are directly supervised by a manager.
74
spare capacity
when a business is able to produce more with existing resources.
75
stock control
the processes and controls used by a business to ensure that is has sufficient stock for its purposes.
76
supply
the amount of goods and services that are available to customers.
77
total costs
the total of variable and fixed costs in a business.
78
unit costs
the average production cost per unit.
79
unlimited liability
describes the potential risk that sole traders face. there are liable for the debts of the business.
80
variable costs
costs that vary directly in proportion to output.
81
variance
the difference between the budgeted amount and what actually happens. a variance can be favourable or adverse.
82
venture capital
investment made by specialist funds to finance the launch, early development or expansion of a private company.
83
waste
a cost of production. sub-standard completed output or raw materials which are not retained in the production process.
84
working capital
the amount of money that a business has available.

BUSINESS (8 decks)

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