Unit 1 - Keywords Flashcards
What is an Aim?
The overall long-term target or goal of the business.
What is an Objective?
The short-term steps a business needs to take to meet its overall aims.
What are Examples of Aims and Objectives?
Financial:
-Business survival
-Profit maximisation
-Growth
-Market Share
-Increasing Shareholder Value
Non-Financial:
-Social and Ethical Objectives
-Customer Satisfaction
What is Internal/Organic Growth?
Growth of a business internally by increasing sales. Sales can be increased in a number of different ways.
What is External Growth?
Growth of a business by takeover or merger.
What is Backwards Vertical Growth?
When a business merges with, or takes over a business that supplies it with goods or services.
What is Forward Vertical Growth?
When a business merges with, or takes over a business that it supplies good or services to.
What is Diversification?
When a business merges with or takes over another business with which there is no connection.
What is Horizontal Growth?
A merger or takeover where two businesses are involved in a similar operation, e.g. two electrical producers or two shops selling fashion clothing.
What is a Business Plan?
A simple plan which sets out details on the products or service being sold, where the finance is to come from to start the business, how the product or service is to be marketed, and the market research to show there is a need for what is being sold.
What is Capital?
Money raised to start or develop a business.
What is Dividend?
The money paid to a shareholder from the profits of a limited company. This is the reward for the shareholder taking a risk by investing money in the company.
What is an Entrepreneur?
A person who takes the risk of starting and running a business enterprise.
What are the Characteristic of an Entrepreneur?
-Creativity
-Risk-Taking
-Confidence
-Determination
What are Stakeholders?
Groups or individuals who have an interest in business.
