Key Terms In Past Papers Flashcards
Trade credit
To buy goods and/or services without making immediate cash or cheque payments.
Market share
The proportion of sales in a market that is taken by one business
Secondary market research
Using existing data such as the internet and market reports
Primary market research
Research you conduct yourself, involving going directly to the source.
Surveys, interviews etc.
Variable costs
Costs that change with the amount produced like packaging and raw materials
Partnership
A type of business with 2 or more owners
Advantages - different partners can have different skills
Disadvantages - less profit
Marketing mix
Price
Product
Promotion
Place
Sole trader
Where an individual runs and owns the entire business,
Disadvantages
- unlimited liability
- harder work
- getting external capital can be difficult
Advantages
- you are your own boss
- you can keep 100% of the profits
- you can make business decisions quicker
Market mapping
Shows the companies competition so they can decide what to do in terms of finding gaps etc
Selling price per product formula
Total revenue/total number of sales
Unlimited liability
The owners of the business are entirely responsible for its debts
Limited liability
The business owner/owners are responsible for business debts up to the value they invested into the business
PLC
Stand for public limited company and its a company that offers shares of stock to the general public
Advantages - shareholders have limited liability
Disadvantages - expensive to set up
LTD
Stand for private limited company and it restricts shareholders from publicly trading shares
Advantages - the owners have limited liability
Disadvantages - shareholders will expect to receive a percentage of the profits
Share capital
The funds that a company raises from selling shares to investors
Gross profit
Revenue - material and labour
Revenue - cost of sales
Net profit
Gross profit - operating expenses
External growth
Using external ways to grow your business usually involves a merger or takeover
External sources of finance
Money that comes from outside a business
Design mix
Function
Cost
Aesthetic
Differentiating a product
Product differentiation is what makes you product or service stand out to your target audience
Globalisation
Companies operating internationally or on a global scale
Advantages - lower cost for products, access to new markets
Disadvantages - increased competition, environmental concerns
Job production
When items are made individually. E.g made to measure clothes
Batch production
Where a group of items are made together. E.g a baker makes 50 white loaves and after they are complete they make 50 brown loaves
