Definitions 2.3 Flashcards
Competitiveness
the extent to which a firm can stand up to - or beat - its rivals
Opportunity cost
the cost of missing out on the next best alternative when making a decision
Stockholding cost
the overheads resulting from stock levels held by a firm
Right first time
avoiding mistakes and therefore achieving high quality with no wastage of time or materials
Trade-off
accepting less of one thing to achieve more of another (for example, slightly lower quality in exchange for cheapness)
Zero defects
eliminating quality defects by getting things right first time
Consumer demand
the levels of spending by consumers in general
Discretionary income
a persons income after deducting taxes and fixed payments such as rent and utility bills
Economic climate
the atmosphere surrounding the economy
Real
changes in money (for example, wages) excluding the distorting effect of changes in prices. So a fall in real wages might be that wages are unchanged, but prices have risen
Cartel
an agreement between producers to control supply and thereby control prices. This is illegal, but not unusual.
Laissez-faire
literally means ‘let it be’, implying leaving businesses free to choose their own policies and practices - trusting the free market
Collusion
when mangers from different firms get together to discuss ways to work together to restrict supply and/or raise prices
Non-price competition
all competitive strategies other then price, such as branding, product design and technological innovation
Oligopolies
markets dominated by a few large companies
