Key words Flashcards
Adding value
How a business sells a product for more than it costs through the processes they apply
Advertising
Promotional method where a business pays to place an advert in a form of media such as newspaper or television
Aesthetics
The attractiveness of the design of the product
Aims and objectives
The overall goals of a business or organisation identifying what the business is trying to achieve
Application form
A method of applying for a job where the required details are decided by the business who is recruiting
Autonomy
The independence a worker has within their job
Average rate
of return
The annual percentage profit that an investment makes compared to the cost of the investment
Bar gate stock
A method of displaying data on stock levels, which allows stock control policy to be
decided, implemented, and reviewed within a business
Batch production
Method of production where groups or types of products are made at several stages
Bonus
An extra amount of financial pay received through achieving a business target
Branding
What distinguishes a good or service from rivals
Break even
Where total revenue is the same as total costs and no profit or loss is made
Buffer stock
A quantity of stock kept in store to safeguard against unforeseen shortages or demands
Business
An organisation set up to meet customer demand and to make a profit for its owners
Business
environment
The external factors such as the economy and the law that influence how a business operates
Business plan
A document produced by a new or existing business that shows what its objectives are and how it will meet them
Capacity
The maximum production output a business can achieve with its existing resources
Capital
The initial money that is needed to start a business that is normally linked to purchases of machinery
and premises
Cash-flow
The money that flows into and out of a business from sales and expenses
Cash-flow
forecast
The prediction of how much money will come into and out of a business over a future time period
Cash inflow
The money that comes into a business from sales and other sources
Cash outflow
The money leaving a business that it spends on raw materials, labour and other expenses
Centralised
Where business decision making and implementation take place at and from the business headquarters
Chain of command
Part of the structure of a business organisation which shows who is in charge of who
Closing balance
The total cash-flow left at the end of a period
Commission
The extra amount of pay workers receive as a percentage of their or the business’s sales
Communication
How messages are passed within a business or from a business to its customers
Competition
Other businesses that produce the same or similar goods or services
Competitive
advantage
A business has a marketing mix which enables it to be more successful than its competitors
Competitive
environment
The number and strength of other businesses in the same market
Competitive
pricing
Where the price of a product is decided by comparing it to its rivals
Consumer
The person or business that use the good or service produced
Consumer
income
How much money consumers have to spend on their needs and wants
Consumer law
Legal constraints that protect the consumer from unfair business practice
Consumer Rights
Where consumers are protected by laws in terms of product quality, returning goods, repairs and
replacements, digital content, and delivery
Consumer spending
The level of spending that consumers undertake related to their income
Cost plus
A pricing method where a business decides what price to charge based only on the cost of its production
and some extra to make a profit
Crowd funding
Finance raised through internet appeals from a large number of small investors
Curriculum Vitae
A document summarising the personal details, qualifications and experiences of an individual.
Often used to apply for a job
Customer engagement
Communicating with customers in a positive way
Customer feedback
Enquiries made after a sale to show how a good, a service or the sales process could be improved
Customer Loyalty
Whether customers return to a business on a regular basis to purchase more of the same goods or other goods that they produce
Customer needs
What an individual must have in order to survive
Customer satisfaction
How happy the consumer is with the product or service they have purchased
Customer service
How a business looks after its customers before, during and after they make a purchase
Customers
The people who purchase a product or service from a business (not always the consumer)
Decentralised
A business structure and its decision-making is spread out to include more junior managers
as well as individual business units or locations
Delayering
A method of saving costs in an organisation by reducing the number of layers
Demographics
Factors related to population, often used as a basis for segmentation
Design mix
The use, appearance and cost of a product
Differentiation
When a business makes its product different to those of its competitors
Digital communication
Sending messages using mobile or internet technology
Digital technology
Where businesses use computers in any way to improve their business performance
Directors
People appointed by the shareholders to run the company on a day-to-day basis to make
all the important decisions
Discrimination
When an employer chooses its workers based on a particular characteristic; many of these are illegal,
for example age, gender, and race
Distribution
How a product gets from the producer to the consumer
Dividend
The share of the profit received by a shareholder
E-commerce
Using the internet to promote and sell a good or service
Economic climate
How a business is affected by economic variables such as interest rates or inflation in a country or in other countries
Efficiency
Measures of how much output is being produced per unit of input
Employees
People who work within a business
Employment law
Legal constraints that protect the employees of a business from unfair business practice
Employment Level
The % employment rate in a country which will affect consumer spending and the availability of employees
E-newsletter
A regular publication sent electronically to customers with items of interest, new products and promotions; used to maintain regular contact with customers
Enterprise
A business that has the objective of making a profit
Entrepreneur
An individual who takes a calculated risk in starting or running a business in return for making a profit
Environmental
considerations
The business takes into account consumer and producer concerns about the environment
E-tailer
An electronic retailer i.e. sells goods using the internet
Ethical objectives
Where businesses have as an aim what is morally right rather than necessarily the most profitable option
Exchange rate
The amount of foreign currency that can be purchased with another currency
Exports
Goods or services that are produced in this country and sold to other countries
Extension strategy
Methods of prolonging the product life cycle to extend the life of a product
External finance
Sources of money from outside of a business
External growth
Growth which occurs by a merging with or taking over another business
Financial data
Information on the costs and revenues of businesses showing changes over time and used
as the basis for calculations and displaying to managers
Financial objectives
Quantifiable targets for a business including profit, sales and costs
Flat structure
Where the organisational structure has few layers, short chains of command and wide spans of control
Focus group
In depth market research where discussions take place with a group of potential of actual consumers
Flow production
Method of production associated with making very large quantities of standard products
Franchise
Where a business acquires the right to use the name and products of another business
Franchisee
The business which runs a franchise in a specific territory or area
Franchisor
The seller of a right to operate a franchise
Freelance contracts
Where an employee is available to be hired on a daily basis or just for a specific job
Fringe benefit
Methods of rewarding a worker that are not directly monetary
Full time working
An employee who is employed for a whole weeks work
Gap in the market
An opportunity for a business to provide a good or service that is not currently available
Globalisation
The increased integration of trade, finance and communications between countries
Gross profit
The difference between revenue and cost of sales; calculated as:
gross profit = total revenue – cost of sales
Gross profit The percentage profit made on sales not taking into account the businesses expenses;
margin
The percentage profit made on sales not taking into account the businesses expenses; margin calculated as: gross profit/sales revenue x 100
Inflation
Where costs and prices in an economy are increasing
Innovation
The introduction of a new product or features on a product
Insolvency
Where a business runs out of cash and is not able to obtain new finance
Interest rates
The percentage cost of borrowing money or the reward for saving money
Internal growth
Organic growth which takes place through a business selling more of its own products
Job analysis
A business deciding whether it needs a worker and what type if required
Job description
An explanation of the roles and responsibilities of a job
Job enrichment
Giving workers more responsibility or more complex and challenging tasks so they have a sense of achievement
Job production
Method of production where products are made individually
Job rotation
Where a worker moves from one job to another job over a period of time
Just-in-time
Where inputs into the production process arrive on the production line just as they are needed
Lead time
The time between ordering a good or service and receiving it
Limited liability
The protection enjoyed by shareholders who can only lose the money they have put into the company
Loan
Source of finance for a business where they receive a fixed amount of money for a specified time,
which will need repayment with interest
Loan capital
Sources of finance involving loans normally from banks or other financial institutions
Logistics
The management of the flow of goods, information and money along the supply chain
Margin of safety
The additional output that a business produces or expects to produce more than its breakeven output
Market map
A diagram representing different businesses in a market that are compared to two variables,
such as price and quality; it is used to identify a gap in the market
Market data
Quantitative information such as sales figures over time for the market of a product or service
Market research
Information from existing and potential consumers about their reaction to a good or service
Market share
The percentage of total sales a firm’s particular good or service has
Marketing
Providing the goods and services that consumers require whilst making a profit
Marketing mix
The ingredients needed to produce a marketing policy normally known as the 4Ps (product, price, place and promotion)
Market segments
A way of dividing up the market into different groups of potential customers
Merger
Where two businesses of equal size are joined together
Multinational
A business that produces goods in more than one country
Net cash-flow
The difference between the cash inflows and cash outflows for a business in a time period
Net profit
The total amount of money made from the trading activities of the business; calculated as: net profit = gross profit - other operating expenses and interest
Net profit margin
The percentage profit made after all costs and expenses has been deducted; calculated as:
net profit/sales revenue x 100
Obsolete
When a type of product is no longer produced because it is not needed or has been replaced
Operational staff
Employees who directly do the work such as the manufacturing or providing the service
Organic growth
Growth which occurs as a business sells more of its own products
Overdraft
Source of finance for a business where it is allowed to take more money out of its account
than it has deposited
Overheads
Costs or expenses that a business incurs
Partnership
Where a business is started and owned by more than one person, who then share the profits and the responsibilities
Post sales service
Following up with a customer after they have made a purchase to check that everything is “ok”
Pressure group
A collection of individuals who have a common cause and campaign to achieve it
Pricing strategy
A policy that a business decides to calculate the price at which it chooses to sell its new or existing products
Primary research
First-hand information gathered by a business about existing and potential consumers
Private limited company
The most common kind of limited company in the UK, where shares can only be sold to “family and friends
Procurement
The process of choosing a supplier
Product trial
A free or reduced-price product is given as a sample with the hope that consumers will continue
to buy the product in the future
Productivity
The amount of output per unit of input (labour, equipment, and capital)
Public limited
company
The kind of limited company whose shares can be bought on a recognized stock exchange
Public relation
An approach to promoting a business focussed on producing a positive image using media
and other indirect methods
Qualitative data
Results of research that is based on opinions, attitudes and beliefs
Quality assurance
Setting up processes in production to ensure that quality is achieved
Quality control
Checking that the products produced by a business are of the required standard at the end
of the production process
Quantitative data
Results of market research that is normally numerical
Questionnaire
A method of gaining market research data through asking the opinions of actual or potential customers
Reliability
Whether a supplier will always deliver at the agreed time
Remuneration
The package of pay and other rewards provided to an employee
Retention
How well a business keeps the staff that it employs
Secondary Research
Information that has already been collected by other businesses or organizations about existing and potential consumers
Segmentation
A way of dividing up the market into different groups of potential customers
Share capital
he money raised by a business from the sale of shares
Stakeholder
An individual or group that is directly or indirectly affected by the actions of a business
Stock market flotation
When a company raises finance through selling shares to new or existing shareholders
Supervisor
An employee with responsibilities for the work produced by a number of workers
Supply chain
All activities that are involved in getting a good or service to the customer
Takeover
Where a business acquires another business
Tariff
A tax on imports that increases their price and allows home businesses an advantage
Trade bloc
A group of countries that have free trade within their group and that may restrict imports from countries
outside of the trade bloc
Trade credit
When a business orders and receives supplies, but pays for them at a later date
Unique selling
point
What makes a business’s goods or services different from its competitors
Unlimited liability
If a business becomes bankrupt, sole traders and partners are personally liable for their business’s debts
Venture capital
A source of finance normally for small businesses with good growth prospects, where the venture
capitalist normally takes a stake in the business
