Definitions

Question 1

Competition

Answer 1

Can be described as rivalry amongst sellers

Question 2

Market

Answer 2

Is any situation where buyers and sellers are in contact in order to establish price

Question 3

Market price

Answer 3

Is the price range in a market of which consumers are prepared to pay

Question 4

Mark up

Answer 4

Is the difference between the cost of producing an item and the price at which it is sold

Question 5

Monopoly

Answer 5

A market dominated by one seller (CMA say more than 25%)

Question 6

Competitive market

Answer 6

A market in which there are a large number of sellers. Competition is mainly based on price.

Question 7

Brand

Answer 7

A distinctive product created by the use of a logo, symbol, name, design, packaging or combination there of

Question 8

Global brand

Answer 8

Brands that are recognised all over the world

Question 9

Strategy

Answer 9

A plan of action

Question 10

Global strategy

Answer 10

Companies that are keen to operate on a global scale must consider how to build a competitive global advantage. I.e. choose the best locations to produce products in

Question 11

Globalisation

Answer 11

Is the increased integration and interdependence of national economies or the world coming together to trade in each other’s market

Question 12

Multinational

Answer 12

A business that has activities and operations in more than one country for example McDonalds, Microsoft and Shell

Question 13

Demand

Answer 13

The amount of a good/service that customers are willing and able to buy at any given price

Question 14

Supply

Answer 14

The amount of a good/service that sellers are willing and able to sell at any given price

Question 15

Equilibrium price

Answer 15

The situation in a market where demand is equal to supply I.e. both parties are happy. Customers an but what they want and shops have no unsold stock

Question 16

Balance of payments/trade

Answer 16

Difference between value of exports and imports

Question 17

Subsidies and grants

Answer 17

Payments by the government to suppliers that reduce their costs.

Question 18

Organisational chart

Answer 18

This is a diagram that shows the hierarchy in a business, usually from top to bottom in terms of seniority.

Question 19

Span of control

Answer 19

The NUMBER of employees from whom a manager is responsible.

Question 20

Chain of command

Answer 20

The chain of command is concerned with the way in which responsibility for employees is organised within a business.

Question 21

Delayering

Answer 21

Delayering is the process of reducing the number of levels or layers in an organisation.

Question 22

Delegation

Answer 22

Where responsibility for carrying out a task or role is passed onto someone else in the business.

Question 23

Empowerment

Answer 23

Is giving employees the power to do their job, for example the authority to make decisions, plan their own work and solve their own problems.

Question 24

Market size

Answer 24

Is the number of individuals in a market who are potential buyers of a good/service. Expressed as the collective value of the goods/services that they purchase.

Question 25

Market growth

Answer 25

Is the percentage growth in the size of the market, measured over a specific period.

Question 26

Market share

Answer 26

The share of the total market that is owned by a particular business, product or brand.

Question 27

Market dominance

Answer 27

A measure of market share compared to competitors

Question 28

Market power

Answer 28

The ability of a firm to influence or control the terms and conditions on which goods are brought and sold.

Question 29

Barriers to entry

Answer 29

The factors that could prevent a firm from entering and competing in a market

Question 30

Barriers to exit

Answer 30

The factors that could prevent a firm from leaving a market, even if it wanted to.

Question 31

Elasticity

Answer 31

Measures how sensitive quantity demanded is to a change in price.

Question 32

Evaluate

Answer 32

Make a qualitative judgement taking into account different fac