Essential Concepts in Business Administration for DECA SL Flashcards
What are the main types of economic systems?
Market Economy, Command Economy, Mixed Economy
Examples include the U.S. for Market Economy, North Korea for Command Economy, and most modern economies for Mixed Economy.
What is a Market Economy?
Businesses and individuals make production decisions based on supply and demand
Example: The U.S.
What is a Command Economy?
The government makes all economic decisions
Example: North Korea.
What is a Mixed Economy?
A combination of government intervention and free-market principles
Example: Most modern economies.
What does the Law of Demand state?
When prices increase, demand decreases; when prices decrease, demand increases.
What does the Law of Supply state?
When prices increase, businesses supply more; when prices decrease, businesses supply less.
What is Equilibrium Price?
The price where supply meets demand.
Define Sole Proprietorship.
One person owns the business, takes all profits, and has unlimited liability.
Define Partnership.
Two or more people own the business and share profits and liabilities.
Define Corporation.
A separate legal entity from its owners, offering limited liability but more regulations.
What is a Franchise?
A business model where an individual (franchisee) operates under an established brand (franchisor) using a proven system.
What are the main business functions?
- Operations
- Marketing
- Finance
- Human Resources (HR)
What is Operations in a business context?
Day-to-day activities that keep a business running (e.g., logistics, supply chain management).
What is Marketing?
Creating and delivering value to customers through products, promotions, and pricing strategies.
What does Finance encompass in a business?
Managing money, investments, and business expenses.
What is Human Resources (HR)?
Hiring, training, and managing employees.
What is Corporate Social Responsibility (CSR)?
Businesses aim to be socially responsible by reducing environmental harm, engaging in philanthropy, and ensuring fair labor practices.
Give examples of Corporate Social Responsibility.
- Companies going carbon-neutral
- Donating to charities
- Implementing ethical sourcing.
What is the Marketing Mix?
The Marketing Mix consists of 4Ps: Product, Price, Place, and Promotion.
What does ‘Product’ refer to in the Marketing Mix?
Product refers to what the business sells, including goods, services, and ideas.
What does ‘Price’ refer to in the Marketing Mix?
Price refers to how much customers are charged, including strategies like penetration pricing and price skimming.
What does ‘Place’ refer to in the Marketing Mix?
Place refers to where the product is sold and how it is distributed, such as retail stores and e-commerce.
What does ‘Promotion’ refer to in the Marketing Mix?
Promotion refers to how the product is advertised, including TV ads and social media.
What is Target Market & Market Segmentation?
It involves identifying ideal customers based on demographics, psychographics, behavior, and geography.
What is Branding?
Branding is creating a unique image for a business, such as Nike’s ‘Just Do It’ slogan.
What is Positioning?
Positioning is how a product is perceived in the market, for example, Tesla as luxury electric cars.
What are Promotion Strategies?
Promotion strategies include advertising, personal selling, public relations, and sales promotions.
What is Customer Relationship Management (CRM)?
CRM is a business strategy focused on building long-term relationships with customers through personalized service.
What are Basic Financial Statements?
Basic financial statements include the Income Statement, Balance Sheet, and Cash Flow Statement.
What does an Income Statement show?
It shows revenue, expenses, and profit/loss over a period.
What does a Balance Sheet list?
It lists a company’s assets, liabilities, and equity at a specific time.
What does a Cash Flow Statement track?
It tracks how money flows in and out of a business.
What is the difference between Revenue and Profit?
Revenue is the total money made from sales, while profit is the money left after subtracting expenses.
What is Gross Profit?
Gross Profit is calculated as Revenue minus Cost of Goods Sold (COGS).
What is Net Profit?
Net Profit is Gross Profit minus Operating Expenses.
What is the purpose of Budgeting & Financial Planning?
Businesses create budgets to plan spending and ensure profitability.
What are Fixed Costs?
Fixed Costs are costs that stay the same, such as rent and salaries.
What are Variable Costs?
Variable Costs are costs that change with production levels, such as raw materials.
What are Sources of Business Financing?
Sources include loans, venture capital, and crowdfunding.
What is the role of Credit & Interest Rates in business?
Businesses use credit to finance operations, and interest rates determine repayment amounts on loans.
What is Effective Communication in Business?
It includes verbal, non-verbal, and written communication, with active listening and clear messaging.
What are Leadership Styles?
Leadership styles include autocratic, democratic, and laissez-faire.
What is Maslow’s Hierarchy of Needs?
It states that employees perform better when basic and psychological needs are met.
What is Herzberg’s Two-Factor Theory?
It suggests job satisfaction is influenced by motivators and hygiene factors.
What are the elements of a contract?
Elements include offer, acceptance, consideration, and legality.
What can a breach of contract lead to?
It can lead to lawsuits.
What is the Fair Credit Reporting Act (FCRA)?
It regulates credit information.
What do Truth in Advertising Laws prevent?
They prevent false or misleading advertisements.
What is Copyright?
Copyright protects creative works such as books and movies.
What do Trademarks protect?
Trademarks protect brand names and logos.
What do Patents protect?
Patents protect inventions.
What are Trade Secrets?
Trade Secrets are confidential business information, like Coca-Cola’s recipe.
What is Ethical Decision-Making in Business?
It involves being honest, fair, and socially responsible.
What are the Steps of the Sales Process?
Steps include approach, needs discovery, presentation, handling objections, closing the sale, and follow-up.
How should a business handle customer complaints?
Listen carefully, apologize, take action, and follow up to ensure satisfaction.
What is E-Commerce & Digital Marketing?
It involves using websites, social media, and online ads to sell products.
What is GDPR?
GDPR is a European law protecting personal data.
What is CCPA?
CCPA protects consumer data in California.
How does AI & Automation improve business?
AI and automation enhance efficiency through chatbots, data analysis, and automated marketing.
What is Cloud Computing in business?
Cloud computing involves using cloud storage and software like Salesforce and QuickBooks for operations.
