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Business Definitions > Theme 1 > Flashcards

Theme 1 Flashcards

1
Q

What is a market?

A

A place buyers and sellers come together to exchange goods, normally an exchange of money at a set price.

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2
Q

What is market size?

A

Total number of sales in the market, measured in terms of money or amount sold.

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3
Q

What is market share?

A

The proportion of total market sales one firm has. Firms want to increase this by making it a marketing objective.

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4
Q

What is a brand?

A

A unique feature of a business such as a name, shape, or logo that distinguishes the business from its competition.

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5
Q

What are dynamic markets?

A

An environment that is constantly changing, influenced by social trends, tech trends, and consumer tastes.

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6
Q

What is online retailing?

A

The process of buying and selling goods over the internet, providing a low-cost, quick option for new businesses and global reach.

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7
Q

What is innovation?

A

A new idea or invention launched onto the market that affects the market by bringing a new one into existence.

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8
Q

What is market growth?

A

Percentage change in the size of the market, where a growing market creates opportunities and a declining market is a threat.

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9
Q

What is competition?

A

The number of firms in the market, where larger firms have more finance and therefore more power over competitors.

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10
Q

What is degree of competition?

A

The number of firms that exist within the market.

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11
Q

What is a monopoly?

A

A market structure where one firm dominates the market.

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12
Q

What is an oligopoly?

A

A market structure where a few large firms dominate the market.

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13
Q

What is monopolistic competition?

A

A market structure where many firms compete to sell differentiated products.

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14
Q

What are Porter’s Five Forces?

A

Competitive rivalry, buying power, selling power, threat of substitutes, threat of new entry.

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15
Q

risks

A

measurable unknowns in decision making. possible to quantify and work out how likely it is to happen

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16
Q

uncertainties

A

non-measurable unknowns of decision making. not possible to quantify as the probability of the outcome is too unpredictable.

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17
Q

What is product orientation?

A

An inward looking approach to product development, focusing on whether the product can be made and the process to make it.

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18
Q

What is market orientation?

A

An outward looking approach to product development, focusing on consumer wants and needs.

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19
Q

What is market research?

A

Collection of analysis and data to inform a business about its market.

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20
Q

What is primary data?

A

Collection of first-hand data.

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21
Q

What is secondary data?

A

Research that has already been done.

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22
Q

What is qualitative data?

A

Gathering of non-numerical information.

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23
Q

What is quantitative data?

A

Gathering of numerical data.

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24
Q

What is sampling?

A

Investigating subjects chosen from a larger group to gain insight into consumer wants and needs.

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25
Q

What is market segmentation?

A

The process of splitting the market into subgroups to help identify different types of consumer wants and needs.

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26
Q

What is market positioning?

A

Where a product is placed in the market relative to its competition.

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27
Q

What is market mapping?

A

A diagram that shows perceptions of customers against competitors, plotted by key variables.

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28
Q

What is competitive advantage?

A

A feature of a business that allows it to perform more successfully, such as an item perceived to be better at the same price or lower.

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29
Q

What is product differentiation?

A

An identifiable feature of a business that allows it to perform more successfully, such as a product’s USP.

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30
Q

What is demand?

A

The amount of a good that consumers are willing to buy at a set price or a set time.

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31
Q

What is a substitute good?

A

Alternative goods for consumers; if the price of good ‘A’ increases, demand for this good increases.

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32
Q

What is a complementary good?

A

Goods often bought together; if the price of good ‘A’ increases, demand for this good decreases.

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33
Q

What are necessities?

A

Goods for which demand is less likely to change when incomes change, as they are needed for daily life.

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34
Q

What are luxuries?

A

Goods for which demand increases with income, as people can afford them; demand decreases if incomes fall.

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35
Q

What are inferior goods?

A

Goods for which demand decreases if incomes increase, as consumers switch to better quality.

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36
Q

What is supply?

A

The amount of a good that suppliers are willing to sell at a set price or a set time.

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37
Q

What is market equilibrium?

A

Where demand and supply are equal, with market forces pushing towards this state.

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38
Q

What are market forces?

A

Factors that always push towards market equilibrium, where there are no products left in the market.

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39
Q

What is PED?

A

A measure of how responsive demand is in relation to price, determining if a price change leads to a change in revenue.

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40
Q

What is YED?

A

A measure of how responsive demand is in relation to income, determining if an income change leads to a change in revenue.

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41
Q

What is a product?

A

The goods or services a firm provides.

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42
Q

What is the design mix?

A

The three elements of product design: function, aesthetics, cost.

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43
Q

What is promotion?

A

The component that informs and persuades customers to buy a product.

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44
Q

What is a promotional mix?

A

Combination of promotional activities that a firm uses to create consumer awareness of the firm and product, boosting sales.

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45
Q

What is public relations?

A

Communicating with the media to get favorable publicity.

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46
Q

What is merchandising?

A

Influencing customers to get them to the buying point.

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47
Q

What is sales promotion?

A

Using short-term offers to increase sales.

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48
Q

What is direct selling?

A

When a supplier cuts out the firm and sells directly to the customer.

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49
Q

What is advertising?

A

Using media to communicate with consumers.

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50
Q

What is pricing strategy?

A

Methods that an organization uses to price a product, often to meet marketing objectives and cover the break-even point.

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51
Q

What is cost plus pricing?

A

A pricing strategy where a percentage mark-up is added to calculate a price at which it is sold.

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52
Q

What is price skimming?

A

A pricing strategy that sets a high initial price to gain profits, then lowers this price once established.

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53
Q

What is price penetration?

A

A pricing strategy that sets a low initial price to gain a foothold in the market, to raise later.

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54
Q

What is predatory pricing?

A

A pricing strategy where a price is set low for a short period to force competitors out.

55
Q

What is leader competitive pricing?

A

A pricing strategy where firms that dominate the market set the price for others to follow.

56
Q

What is taker competitive pricing?

A

A pricing strategy where small firms set prices based on the market price.

57
Q

What is psychological pricing?

A

A pricing strategy where firms set a price designed to seem cheaper (e.g., 99p).

58
Q

What is a distributor?

A

The person who sells an organization’s product to the retailer.

59
Q

What is a distribution channel?

A

The route to the market a product takes from production to the consumer.

60
Q

What is a manufacturer?

A

Organizations that take raw materials and process them into finished goods.

61
Q

What are wholesalers?

A

They buy large quantities of supply and sell them in smaller quantities.

62
Q

What is a retailer?

A

An organization that sells goods to the general public.

63
Q

What is a marketing strategy?

A

Marketing plans used to achieve marketing objectives, including decisions related to product and market development.

64
Q

What is a product portfolio?

A

Looks at a range of products the business has under its control, helping to identify where the business products are positioned in the market.

65
Q

What is the product life cycle?

A

Stages a product goes through that influence the inflow and outflow of cash.

66
Q

What is research and development?

A

The initial stage of the product life cycle where a business invests in new ideas prior to launch.

67
Q

What is a launch?

A

The time the product is introduced onto the market.

68
Q

What is growth in the product life cycle?

A

A stage where sales volume and revenue increase over time.

69
Q

What is maturity in the product life cycle?

A

A stage where sales of the product are fully established and sales remain about the same.

70
Q

What is decline in the product life cycle?

A

A stage when sales begin to fall.

71
Q

What is an extension strategy?

A

A strategy used to extend the lifetime of a product.

72
Q

What is the Boston Matrix?

A

The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands.

73
Q

What is niche marketing?

A

When firms target a small subsection (unexplored) area of the market, allowing businesses to charge premium prices for their goods.

74
Q

What is mass marketing?

A

When firms target the whole market to maximize sales, often adopting a market penetration strategy.

75
Q

What is soft HRM?

A

A strategy where the workforce is treated as an asset that can contribute to achieving business objectives and opportunities for training.

76
Q

What is hard HRM?

A

A strategy where the workforce is treated as a resource that needs to be managed to control costs and output.

77
Q

What is a flexible workforce?

A

A strategy that uses part-time employees to minimize HR costs and respond to fluctuations in demand.

78
Q

What is multi-skilling?

A

The ability of the workforce, where employers should match working hours to ability for the best results.

79
Q

What is outsourcing?

A

Using services of another organization to complete manufacturing, providing flexibility in supply and increasing capacity.

80
Q

What is dismissal?

A

Termination of an employee’s contract due to a breach, such as incompetence or a disciplinary issue.

81
Q

What is redundancy?

A

A form of dismissal when a contract is terminated because a job no longer exists, entitling the employee to financial compensation.

82
Q

What are trade unions?

A

National organizations that protect their members and improve economic and working conditions.

83
Q

What is industrial action?

A

When employees take sanctions to impose pressure on an employer (e.g., strike).

84
Q

What is the recruitment process?

A

The steps undertaken by a business from identifying the need for a new employee to attracting suitable candidates.

85
Q

What is internal recruitment?

A

A form of recruitment where candidates for the position are chosen from within the business.

86
Q

What is external recruitment?

A

A form of recruitment where candidates for the position are chosen from outside the business.

87
Q

What is selection?

A

Actions taken by a business to help identify the best candidate for a vacancy.

88
Q

What are interviews?

A

A question and answer session with a candidate, a potential employee.

89
Q

What is organizational structure?

A

The way the workforce is organized, including job roles and communication flows.

90
Q

What are levels of hierarchy?

A

The number of layers within an organization’s structure.

91
Q

What is the chain of command?

A

The way authority and power are passed down the levels of hierarchy.

92
Q

What is span of control?

A

The number of subordinates that a manager is in control of.

93
Q

What is a centralized HR strategy?

A

A strategy where responsibility is maintained by a small number of managers at the top of the hierarchy, allowing for fast decision making.

94
Q

What is a decentralized HR strategy?

A

A strategy where responsibility is delegated to middle managers, allowing for direct involvement with projects.

95
Q

What is a tall structure?

A

A business that has many levels in its hierarchy, resulting in a narrow span of control.

96
Q

What is a flat structure?

A

A business that has few levels in its hierarchy, resulting in a wide span of control.

97
Q

What is a matrix structure?

A

A business structure where teams are formed from different functional areas to work on specific projects, ensuring communication across areas.

98
Q

What is motivation?

A

The reasons why people behave in a certain manner, which can be financial (e.g., bonuses) or non-financial (e.g., increased responsibility).

99
Q

What are financial incentives?

A

Methods used to reward the workforce with money, including piece rate, commission, bonus, and profit share.

100
Q

What are non-financial incentives?

A

Methods used to reward the workforce without money, including delegation, consultation, empowerment, and team working.

101
Q

delegation

A

passing authority down the hierarchy

102
Q

flexible working

A

gives employees greater control over their own work routines

103
Q

job rotation

A

varying tasks that an employee does to reduce boredom

104
Q

job enlargement

A

increasing the number of responsibilities an employee has

105
Q

job enrichment

A

increase in the level of responsibility an employee has

106
Q

leadership

A

the ability to influence and direct people to meet goals of a group

107
Q

management

A

these people set objectives and decide how to go about achieving them in a business

108
Q

autocratic leadership

A

a leadership style where all decisions are made by the top without consultation

109
Q

paternalistic leadership

A

a leadership style where the leader acts in a fatherly way towards the workforce

110
Q

democratic leadership

A

a leadership style where the leader consults the team but makes the final decision themselves

111
Q

laissez-faire

A

a leadership style where the leader allows the team to make decisions without supervision. the term means ‘to leave alone’

112
Q

entrepreneur

A

a person who spots an opportunity and takes risks to start a new business. characteristics include being risk takers or opportunity spotters

113
Q

intrapreneur

A

when employees within an organisation act in the same way as entrepreneurs. an employee as resources at their disposal and is encouraged to take risks

114
Q

business objectives

A

the targets to be achieved by a business in a given time frame. should be SMART; specific, measurable, achievable, realistic, timed.

115
Q

survival

A

an example of a business objective. to continue to exist as a business.

116
Q

profit maximisation

A

an example of a business objective. to produce enough where the surplus of revenue over total costs is at its highest.

117
Q

sales maximisation

A

an example of a business objective. to achieve the highest achievable amount of sales.

118
Q

sole trader

A

a form of business. an individual who runs their own business. is unincorporated and therefore has unlimited liability.

119
Q

partnership

A

a form of business. when two or more people join together to set up a business. they share costs, risks and responsibilities.

120
Q

private limited company

A

a business owned by shareholders who are family and friends of the entrepreneur. this business must have ltd. after its name.

121
Q

franchise

A

the process where a franchisor gives a franchisee permission to trade using the franchisors name and selling its goods and services.

122
Q

franchisor

A

a business that sells a license to allow another person to trade using its name and goods.

123
Q

franchisee

A

a business that is given permission from another business to use their name and goods to trade.

124
Q

public limited company

A

a business that sells shares on a stock exchange. it must have a minimum of £50,000 in share capital and have plc. after it’s name.

125
Q

opportunity cost

A

the cost of one action in terms of the next best alternative forgone.

126
Q

government subsidies

A

finance provided by the government to encourage suppliers to produce certain goods and service.

127
Q

indirect taxes

A

charges that are placed on goods and services produces by individuals and firms (e.g. VAT)

128
Q

social trends

A

changes to the characteristics of society over time

129
Q

ethical sourcing

A

morality in decision making, doing what is ‘right’ when choosing suppliers

130
Q

market penetration

A

a part of ansoff’s matrix. when a business focuses on selling existing products in existing markets.

131
Q

market development

A

a part of ansoff’s matrix. when a business focuses on selling existing products in new markets.

132
Q

product development

A

a part of ansoff’s matrix. when a business focuses on selling new products in existing markets.

133
Q

diversification

A

a part of ansoff’s matrix. when a business focuses on selling new products in new markets.

Business Definitions (4 decks)

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