Paper 1 SVT Flashcards
Public limited company (PLC)
A limited company, often a large business, with the legal right to sell shares to the general public; it’s share price quoted on the national stock exchange
Vision statement
A statement of the organization’s long term aspirations and what it would like to achieve or accomplish
Monopoly
a market structure where one company is the sole producer of a certain product
Acquisition
External growth strategy where a company buys over 50% of the shares of another company and becomes the controlling owner
Organizational structure by function
An organizational structure where the business is divided into smaller groups based on specialized functional areas, such as marketing, HR, operations, and finance
Situational leadership
A leadership style that varies based on the task at hand, situational leaders adapt their leadership styles to each situation
Autocratic leadership
A leadership style that keeps all decision making at the center of the organization
Internal growth
The organic growth of a business using its own capabilities and resources to increase its scale of operations with less risk
External growth
The inorganic growth of a business by means of merging, collaborating or taking over another business
Market share
Measures the value of a firm’s sales revenue as a percentage of the total sales revenue in the industry (market share = firm’s sales/ total sales in the market x 100)
Market growth
The increased percentage in the size of a market per year
Financial motivation
financial methods that businesses use to reward and extrinsically motivate their employees (commission, profit-related pay, performance-related pay, employee share-ownership, fringe benefits)
Non-financial motivation
non-financial methods that businesses use to intrinsically motivate their employees (job enrichment, job rotation, job enlargement, empowerment, teamwork, purpose/ the opportunity to make a difference)
Commission
Financial reward that provides workers a certain percentage of the sales of good/ service they are responsible for completing
Profit-related pay
Financial reward system which remunerates workers a certain percentage of the annual profits that the business earns
Performance-
related pay
Financial reward system to reward staff for reaching/ exceeding a set target
Employee share-ownership schemes
Financial reward system that gives workers, managers and directors shares in the company/ selling them at discounted prices
Fringe Benefits
Financial rewards of a job in addition to the basic pay including, medical insurance, a company car and pension schemes.
Job enrichment
Non-financial reward involving the vertical expansion of a job which attempts to motivate employees by giving them opportunities, challenges, and responsibilities
Job rotation
Non-financial reward involving moving employees between different tasks to promote experience and variety
Job enlargement
Non-financial reward involving the horizontal expansion of a job by increasing the scope of the work assigned
Empowerment
Non-financial reward involving the delegation of decision making power and greater responsibilities to employees to improve morale and motivation (as they believe their managers have trust in them)
Teamwork
Non-financial reward involving the combined efforts of a group of workers to achieve an organizational goal
Purpose/ the opportunity to make a difference
Non-financial reward which involves the concept that some employees are not driven by self-interest, but rather are motivated by making a greater difference. By recognizing the purpose in their work, they are intrinsically motivated
Economies of scale
Decrease in a firm’s unit (average) costs of production as the scale of operation increases (purchasing, technical, financial, marketing, managerial)
Flexitime work
Employment contract that allows staff to be called in at times most convenient to employers and employees (usually during busy hours)
Labor turnover
Measures the rate at which employees are leaving an organization. It is measured by the number of employees leaving/ the total number of employees x 100
External recruitment
When a company fills a job vacancy by recruiting an employee from outside the business, usually because they need skills that it lacks in its current employees
Induction training
Introductory training program to familiarize new recruits with the systems used in the business and the layout of the business (usually on-the-job)
Dividends
A sum of money paid to shareholders decided by the board of directors of a company
Market leadership
Businesses with the largest market share in a particular market
Corporate Social Responsibility (CSR)
Businesses that accept its moral obligations to stakeholders other than investors and takes responsibility for the impact of their decisions on customers, employees, and the environment
Charities
A non-profit social enterprise that provides voluntary support for good causes (often perform social/ environmental functions that would not be undertaken by private businesses and are dependent on donations, endorsements and promotion)
Non-governmental organizations (NGOs)
A non-profit social enterprise that is not controlled by the government and has a specific aim to tackle issues that benefit society
Research and development
the process of creating new products and processes to meet market needs
Product innovation
Creating/ developing new/ existing products
Process innovation
Developing new methods of production/ product delivery
Position innovation
Changing the context of a product by repositioning it (marketing to a different target market/ a change in the organization’s focus)
Paradigm innovation
Radical innovation that has the capability of changing the nature of a market which is highly risky
What are the pricing strategies?
- Cost-plus pricing
- Penetration pricing
- Price skimming
- Psychological pricing
5 .Loss leader - Price discrimination
- Price leadership
- Predatory pricing
Cost-plus pricing
a pricing strategy that involves adding a percentage/ predetermined amount of profit to the cost per unit of output
Penetration pricing
a pricing strategy that involves setting low prices to gain entry into a market. Once the product has established market share, prices can be raised
Price skimming
a pricing strategy that involves initially setting high prices for a limited period of time in order to gain short term profit and then gradually reducing it
Psychological pricing
a pricing strategy where firms consider how pricing affects consumer’s perception of the value of the product by rounding down numbers to make prices seem lower
Loss Leader
a pricing strategy that involves setting the price of a product below its production cost to entice customers to buy their other products with high profits in addition to the loss leader product
Price Discrimination
a pricing strategy that involves charging different prices to different groups of customers for the same product
Price Leadership
a pricing strategy that involves firms with the largest market share setting a price for its products and other firms in the market set the same prices
Predatory pricing
a pricing strategy that involves setting temporarily low prices to force small competitors out of the market
Subsidies
Financial assistance granted by a government to support business enterprises that are deemed beneficial to society/ in the public interest
Place
the ways in which products move from producer to consumer (distribution channels)
Secondary Research
the collection of second-hand data (data that has been collected by others)
Market analysis
A report that contains data and information about a particular product, market or industry
Academic journals
Publications from educational and research institutions that publish data and information of academic disciplines
Government Publications
Official documents published by governments that discuss a broad range of data relating to economic, demographic or social matters
Media Articles
Professional documents or articles written by journalists and authors
Market Segmentation
The process of dividing a market into smaller groups of customers
