key terms theme 1

Question 1

Stock Exchange

Answer 1

A place where public limited companies trade shares in their organisations. Individuals and other companies are able to buy shares, which makes them part-owners in a firm

Question 2

Dynamic Markets

Answer 2

These are the markets that change with a variety of factors, such as consumer tastes, government regulations and the emergence of new competitors

Question 3

Stable markets

Answer 3

These markets stay the same regardless of changing factors and trends e.g the dairy and standard bread markets

Question 4

Trend

Answer 4

The direction in which most things appear to be moving e.g. there may be a trend for new technology firms to aim at young consumers

Question 5

Competition

Answer 5

When two or more firms offer their products to a market, they enter into competition with one another

Question 6

External Factors

Answer 6

influences from outside the company which affect the way they do business e.g. change in consumer tastes

Question 7

Risk VS Uncertainty

Answer 7

Risk is generally something that can be planned for. Uncertainty on the other hand involves the factors, normally external, that are beyond a firms control. Businesses can take calculated risks, but they are generally unable to plan for uncertainty.

Question 8

Product Orientation

Answer 8

When a business focuses more on its product and production process that’s considering what consumers are looking for

Question 9

Market orientation

Answer 9

When a business creates a product by first finding out what it’s potential customers want

Question 10

Primary Data

Answer 10

research data that has been gathered first hand. Business generally collects primary data through questionnaires and surveys

Question 11

Secondary Data

Answer 11

Research data has been gathered second hand,such as reading the findings or statistics of a survey published by another company

Question 12

Market Segmentation

Answer 12

when a market is split into groups, such as location, age or language. Businesses use segmentation in order to understand on which section of a market they should concentrate.

Question 13

Market Map

Answer 13

Visual Representation of a consumer market, which usually utilises two axis (such as price vs quality)

Question 14

Competitive advantage

Answer 14

Firms that positively distinguish themselves from the competition are said to have competitive advantage, or the edge, over the rivals

Question 15

Differentiation

Answer 15

This covers the ways in which a company gains competitive advantage, such as a strong brand product branding, price, marketing and customer service

Question 16

Add Value

Answer 16

When a business turns the sum of raw materials into a product that is worth more. value added is calculated as : selling price of product - total costs to creat product