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Business Studies GCSE > Key Definitions > Flashcards

Key Definitions Flashcards

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1
Q

Advertising

A

A method of communicating information about the product; the business pays for advertising time/space.

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2
Q

Aim

A

The intention to reach a goal

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3
Q

Air pollution

A

The presence or introduction of harmful substances into the air causing disease, allergies or damage to humans, animals, plants or the built environment.

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4
Q

Asset

A

Something the business owns it has a value

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5
Q

Average rate of return

A

The average profit for the year as a percentage of the original investment. Average rate or return = average return per annum / initial  100

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6
Q

Boston matrix

A

A tool for analysing the contribution made by each product in a business’ product portfolio. It plots each product’s position according to its market share and the rate of growth of the market.

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7
Q

Brand image

A

The consumers’ perception of the brand; its character, qualities and shortcomings. It is developed over time and operates as a consistent theme through advertising campaigns.

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8
Q

Break even chart

A

A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross.

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9
Q

Break even output

A

The point at which the business’ total sales equals the total costs. There is neither profit nor loss.

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10
Q

Buffer stock

A

A stock of raw materials held in reserve to protect the production process from unforeseen shortages.

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11
Q

Business plan

A

A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.

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12
Q

Cash

A

Money that the business has in cash or at the bank.

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13
Q

Cash flow forecast

A

A financial planning tool that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finance may be needed to maintain liquidity.

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14
Q

Cash inflow

A

Money received by the business from its operations or investments.

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15
Q

Cash outflow

A

Money paid out by the business to fund its operations or investment activities.

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16
Q

Centralisation

A

Maintaining control by keeping authority at the senior levels of the organisation.

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17
Q

Chain of command

A

The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.

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18
Q

Channels of distribution

A

The route the ownership of the product transfers from the seller to the buyer; it may be a single transaction or pass through others such as wholesalers, distributors, agents and retailers.

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19
Q

Closing balance

A

The amount that remains in the account at the end of an accounting period.

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20
Q

Commission

A

An amount of money paid to an employee that is based on a percentage of the sales he/she achieved; paid in addition to a basic salary.

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21
Q

Competition

A

The rivalry between businesses looking to sell their goods/services in the same market.

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22
Q

Competitive pricing

A

Setting the price of a product so that it is in line with competitors’ prices.

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23
Q

Consumer law

A

Laws designed to ensure that businesses make products that are safe and of good quality, and that they deal with customers honestly and fairly.

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24
Q

Consumer spending

A

The money spent by households on goods and services to satisfy their needs and wants.

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25
Q

Contracts of employment

A

A legal document that sets out the terms and conditions of the job for the employer and the employee.

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26
Q

Cost

A

The money spent by a business on goods and services.

27
Q

Cost plus pricing

A

Setting the price of a good or service at an amount higher than the cost of producing it so that a profit is made.

28
Q

Customer

A

Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.

29
Q

Customer engagement

A

The relationship between the business and the customer that puts the customer’s requirements at the centre of the operation to build brand loyalty.

30
Q

Customer loyalty

A

The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmes.

31
Q

Customer satisfaction

A

Whether customers are pleased with the goods/services they receive; whether they would purchase again.

32
Q

Decentralisation

A

Where authority is spread widely through the organisation.

33
Q

Delayering

A

The reorganisation of the organisation’s employees so that there are fewer levels of management.

34
Q

Delegation

A

Allocating a task to someone who would not normally be responsible for it.

35
Q

Demand

A

The quantity of a particular product that will be bought at particular price over a specific time.

36
Q

Directors

A

The people who are elected by the shareholders to run the business on their behalf.

37
Q

Diseconomies of scale

A

When a business grows too large, leading to a possible increase in unit cost.

38
Q

Disposal of wate

A

The removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.

39
Q

Dividend

A

A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.

40
Q

E-commerce

A

Business transactions carried out electronically on the internet.

41
Q

Economies of scale

A

The cost advantage of producing on a large scale. As output increases the unit cost decreases.

42
Q

Employees

A

Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.

43
Q

Employment law

A

Rulings that relate to the rights and responsibilities of people who work for a business; they affect the recruitment and selection process and how the business deals with its workers.

44
Q

Enterprise

A

The ability to identify business ideas and opportunities to bring them to fruition and to take risks where appropriate.

45
Q

Entrepreneur

A

A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.

46
Q

Equality act

A

Protects people from discrimination in the workplace and in wider society. It sets out the different ways in which it is unlawful to treat someone.

47
Q

Ethical objections

A

A business’ goals that relate to fair business practice or moral guidelines and make a positive contribution to the business’ reputation.

48
Q

Ethics

A

The moral principles that guide how a business operates.

49
Q

Exchange rates

A

The price of one currency based on another or the cost of buying one currency from another, for example £1 = $1.21.

50
Q

Expansion

A

The process of increasing a business’ size.

51
Q

Export

A

Good/service sold to a customer in another country.

52
Q

Extension strategies

A

Methods that can be used to prolong the life of a product; could include price reductions, modifications to the product or relaunch.

53
Q

External growth

A

The growth of a business by joining with another by merger or takeover.

54
Q

External sources of finance

A

Obtaining funds from sources that are not part of the business; possibilities include bank loan, mortgage, overdraft, additional partner or share issue.

55
Q

Factors of production

A

The elements that combine in the production process: land, labour, capital and enterprise

56
Q

Fixed costs

A

The costs that stay largely the same, regardless of the business’ output.

57
Q

Flat orgasanisational structure

A

An organisational structure with a wide span of control and few levels of hierarchy (a short chain of command).

58
Q

Flow production

A

Using a production line to make goods continuously and in large numbers.

59
Q

Focus groups

A

A small number of people from the target market brought together to discuss a particular product; produces qualitative data about their preferences and opinions.

60
Q

Franchising

A

The sale of the rights to use/sell a product by a franchisor to a franchisee. A fixed fee and/or a percentage is paid in return. The franchiser specifies the standards and provides training and support.

61
Q

Fringe benefits

A

Additional ‘perks’ that are in addition to a wage/salary; they are liable to income tax.

62
Q

Full time

A

Working all the usual hours required of an employee; usually 35 hours or more

63
Q

Gap in the market

A

An opportunity for a new business (or expansion) which may meet a need that is not being met, or a group of potential customers who are not yet purchasing a particular good/service.

64
Q

Global warming

A

The steady increase in the earth’s temperature due to emissions and the build- up of greenhouse gases, resulting in climate changes.

Business Studies GCSE (3 decks)

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