Subject Specific Vocabulary Flashcards
Define ‘Advertising’
A method of communicating information about the product; the business pays for advertising time/space.
Define ‘aim’
The intention to reach a goal.
Define ‘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.
Define ‘asset’
Something the business owns; it has a value.
Define ‘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 x 100
Define ‘boston matrix’
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.
Define ‘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 campaigns.
Define ‘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.
Define ‘break even output’
The point at which the business’ total sales equals the total costs. There is neither profit nor loss.
Define ‘buffer stock’
A stock of raw materials held in reserve to protect the production process from unforeseen shortages.
Define ‘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
Define ‘cash’
Money that the business has in cash or at the bank.
Define ‘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.
Define ‘cash inflow’
Money received by the business from its operations or investments.
Define ‘cash outflow’
Money paid out by the business to fund its operations or investment activities.
Define ‘centralisation’
Maintaining control by keeping authority at the senior levels of the organisation.
Define ‘chain of command’
The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.
Define ‘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.
Define ‘closing balance’
The amount that remains in the account at the end of an accounting period.
Define ‘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.
Define ‘competition’
The rivalry between businesses looking to sell their goods/services in the same market.
Define ‘competitive pricing’
Setting the price of a product so that it is in line with competitors’ prices.
Define ‘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.
Define ‘consumer spending’
The money spent by households on goods and services to satisfy their needs and wants.
Define ‘contracts of employment’
legal document that sets out the terms and conditions of the job for the employer and the employee.
Define ‘cost’
The money spent by a business on goods and services.
Define ‘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
Define ‘customer’
Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.
Define ‘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.
Define ‘customer loyalty’
The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmes.
Define ‘customer satisfaction’
Whether customers are pleased with the goods/services they receive; whether they would purchase again.
Define ‘centralisation’
Where authority is spread widely through the organisation.
Define ‘delayering’
The reorganisation of the organisation’s employees so that there are fewer levels of management.
Define ‘delegation’
Allocating a task to someone who would not normally be responsible for it.
Define ‘demand’
The quantity of a particular product that will be bought at particular price over a specific time.
Define ‘directors’
The people who are elected by the shareholders to run the business on their behalf.
Define ‘diseconomies of scale’
When a business grows too large, leading to a possible increase in unit cost.
Define ‘disposal of waste’
The removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.
Define ‘dividend’
A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.
Define ‘e-commerce’
Business transactions carried out electronically on the internet.
Define ‘economies of scale’
The cost advantage of producing on a large scale. As output increases the unit cost decreases.
Define ‘employees’
Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.
Define ‘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.
Define ‘enterprise’
The ability to identify business ideas and opportunities to bring them to fruition and to take risks where appropriate.
Define ‘entrepreneur’
A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.
Define ‘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.
Define ‘ethical objectives’
A business’ goals that relate to fair business practice or moral guidelines and make a positive contribution to the business’ reputation.
Define ‘ethics’
The moral principles that guide how a business operates.
Define ‘exchange rates’
The price of one currency based on another or the cost of buying one currency from another, for example £1 = $1.21.
Define ‘expansion’
The process of increasing a business’ size.
Define ‘export’
Good/service sold to a customer in another country.
Define ‘extension strategies’
Methods that can be used to prolong the life of a product; could include price reductions, modifications to the product or relaunch.
Define ‘external growth’
The growth of a business by joining with another by merger or takeover.
Define ‘external source of finance’
Obtaining funds from sources that are not part of the business; possibilities include bank loan, mortgage, overdraft, additional partner or share issue
Define ‘factors of the production’
The elements that combine in the production process: land, labour, capital and enterprise.
Define ‘fixed costs’
The costs that stay largely the same, regardless of the business’ output.
Define ‘flat organised structure’
An organisational structure with a wide span of control and few levels of hierarchy (a short chain of command).
Define ‘flow production’
Using a production line to make goods continuously and in large numbers.
Define ‘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.
Define ‘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.
Define fringe benefits
Additional ‘perks’ that are in addition to a wage/salary; they are liable to income tax.
Define ‘full time’
Working all the usual hours required of an employee; usually 35 hours or more.
Define ‘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.
Define ‘global warming’
The steady increase in the earth’s temperature due to emissions and the build- up of greenhouse gases, resulting in climate changes.
Define ‘globalisation’
The trend for large businesses to operate on a worldwide scale; money, goods and services can be transferred across national borders.
Define ‘goods’
Items that are produced from raw materials for sale to businesses or consumers.
Define ‘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.
