Keywords Flashcards
Whats Advertising?
A method of communicating information about the product; the business pays
for advertising time/space.
Whats an aim?
Its the intentions to reach a goal
What is air pollution?
The presence or introduction of harmful substances into the air causing disease,
allergies or damage to humans, animals, plants or the built environment.
Whats an asset?
Something the business owns; it has a value.
Whats the Average rate of return
The average profit for the year as a percentage of the original investment.
Average rate or return = average return per annum / initial 100
Whats boston martix
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.
What’s brand image
The consumers’ perception of the brand; its character, qualities and
shortcomings. It is developed over time and operates as a consistent theme
through advertising campaig
Whats break-even chart
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.
Whats a Break-even output
The point at which the business’ total sales equals the total costs. There is
neither profit nor loss.
What’s buffer stock?
A stock of raw materials held in reserve to protect the production process from
unforeseen shortages.
Whats a business plan?
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.
Whats cash?
Money that the business has in cash or at the bank.
Cash flow forecast
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.
Cash inflow
Money received by the business from its operations or investments
Cash outflow
Money paid out by the business to fund its operations or investment activities.
Centralisation
Maintaining control by keeping authority at the senior levels of the organisation.
Chain of command
The line through the hierarchy that shows who is responsible for whom from top
to bottom of an organisation
Channels of distribution
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.
Closing balance
The amount that remains in the account at the end of an accounting period.
Commission
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.
Competition
The rivalry between businesses looking to sell their goods/services in the same
market.
Competitive pricing
Setting the price of a product so that it is in line with competitors’ prices.
Consumer law
Laws designed to ensure that businesses make products that are safe and of
good quality, and that they deal with customers honestly and fairly
Consumer spending
The money spent by households on goods and services to satisfy their needs and wants
Contracts of employment
A legal document that sets out the terms and conditions of the job for the
employer and the employee.
Cost
The money spent by a business on goods and services.
Cost-plus pricing
Setting the price of a good or service at an amount higher than the cost of
producing it so that a profit is made.
Customer
Individuals, businesses or organisations that purchase goods/services and make
decisions about which supplier to choose.
Customer engagement
The relationship between the business and the customer that puts the
customer’s requirements at the centre of the operation to build brand loyalty.
Customer loyalty
The likelihood that past customers will continue to buy from the business,
enhanced by high quality customer service and/or reward programmes.
Customer satisfaction
Whether customers are pleased with the goods/services they receive; whether
they would purchase again.
Decentralisation
Where authority is spread widely through the organisation.
Delayering
The reorganisation of the organisation’s employees so that there are fewer levels
of management.
Delegation
Allocating a task to someone who would not normally be responsible for it.
Demand
The quantity of a particular product that will be bought at particular price over a
specific time.
Directors
The people who are elected by the shareholders to run the business on their
behalf.
Diseconomies of scale
When a business grows too large, leading to a possible increase in unit cost.
Disposal of waste
The removal, storage or destruction of unwanted material. Methods include
recycling, burning and landfill sites.
Dividend
A portion of the after-tax profit that is paid to shareholders according to the
number of shares they own.
E-commerce
Business transactions carried out electronically on the internet.
Economies of scale
The cost advantage of producing on a large scale. As output increases the unit
cost decreases.
Employees
Individuals who work full time or part time for the business; they have a contract
of employment detailing their duties and rights.
Employment law
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.
Enterprise
The ability to identify business ideas and opportunities to bring them to fruition
and to take risks where appropriate.
Entrepreneur
A person who has the vision to use initiative to make business ideas happen,
managing the resources and risks
Equality Act (2010)
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.
Ethical objectives
A business’ goals that relate to fair business practice or moral guidelines and
make a positive contribution to the business’ reputation.
Ethics
The moral principles that guide how a business operates.
Exchange rates
The price of one currency based on another or the cost of buying one currency
from another, for example £1 = $1.21.
Expansion
The process of increasing a business’ size.
Export
Good/service sold to a customer in another country.
Extension strategies
Methods that can be used to prolong the life of a product; could include price
reductions, modifications to the product or relaunch.
External growth
The growth of a business by joining with another by merger or takeover.
External sources of finance
Obtaining funds from sources that are not part of the business; possibilities
include bank loan, mortgage, overdraft, additional partner or share issue.
External sources of finance
Obtaining funds from sources that are not part of the business; possibilities
include bank loan, mortgage, overdraft, additional partner or share issue.
Factors of production
The elements that combine in the production process: land, labour, capital and
enterprise.
Fixed costs
The costs that stay largely the same, regardless of the business’ output.
Flat organisational structure
An organisational structure with a wide span of control and few levels of
hierarchy (a short chain of command).
Flow production
Using a production line to make goods continuously and in large numbers.
Focus groups
A small number of people from the target market brought together to discuss a
particular product; produces qualitative data about their preferences and
opinions.
Franchising
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.
Fringe benefits
Additional ‘perks’ that are in addition to a wage/salary; they are liable to income
tax.
Full time
Working all the usual hours required of an employee; usually 35 hours or more.
Gap in the market
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.
Global warming
The steady increase in the earth’s temperature due to emissions and the build-
up of greenhouse gases, resulting in climate changes.
Globalisation
The trend for large businesses to operate on a worldwide scale; money, goods
and services can be transferred across national borders.
Goods
Items that are produced from raw materials for sale to businesses or
consumers.
Government grants
Money available from the government to fund projects that it wants to support;
the money is not repaid, but there are conditions and often progress reports are
required.
Growth
A business’ increase in size. Methods include: asset value, employees, market
share, markets, profits and sales.
Health and Safety at Work Act (1974)
Sets out the duties and responsibilities of both employers and employees for
health and safety in the workplace.
Hierarchy
The management structure of a business/organisation showing the levels of
responsibility. It is often shown as an organisation chart.
Hire purchase
Buying items by making a small initial payment and paying the remaining
amount in instalments over an agreed period of time.
Import
Good/service bought from a supplier in another country.
Income statement
A summary of the revenue and expenses over an accounting period that lead to
a profit or loss position.
Induction
Training given to a new employee when they start a new job; it provides
information about the business, its operation and working practices.
Inspection
Testing/examining items to check that materials or items conform to the
specified requirements/standards.
Integration
Two or more businesses join together
Interest rates
.
The rate charged for borrowing money over a period of time, or the reward for
saving money
Job analysis
The process of determining what the job entails, including responsibilities and
tasks.
Job description
A summary of what the job entails, including job title, duties and who they are
responsible for/to.
