Unit 2 Flashcards
What is Organic growth
It occurs when a business sells more of its products.
What is External growth
It occurs when a business joins together with another business
What is a merger
It occurs when two or more businesses join together to form a new business
A takeover occurs when …
One business gains control of another
A franchise occurs when …
One business (a franchisor) sells the rights to its name and products to another (a franchisee)
Economies of scale occurs when…
The cost per unit falls as a business expands
Diseconomies of scale occurs when
The cost per unit increases as a business expands
A flotation occurs when…
A private limited company (ltd) becomes a public limited company (plc) and has its shares listed on the stock exchange
The stock exchange is …
A market for shares of public limited companies. Large number of shares are being bought and sold all the time
A market leader is
the biggest firm in a market, eg it had the largest market share
Business ethics refers to …
Whether a business decision is seen as morally right or wrong. An ethical decision is made if what you think is right
Protectionist measures are
Policies that governments use to protect their own businesses against foreign competition
An import is
A product bought from abroad
A quota is
A limit on the number of foreign goods imported into a country
A tariff is
A tax on foreign goods imported into a company
A product portfolio is…
the collection of products that a firm produces
A dog product has…
A low market share in a low market growth
A cash cow product has…
A high market share in a low growth market
A question mark product has
a low market share in a fast growth market
A star product has
A high market share in a fast growth market
The distribution channel describe (how…)
The ownership of a product passes from the producer to the finak customer
What is a wholesaler
Someone who buys in large quantities from a producer and sells to retailers
Retailers are …
Shops that sell direct to the customer
Direct marketing occurs when…
There is a direct link from the producer to the customers with no imtermediaries
A bank loan is
A sum of money given by a bank to a business. The money is repaid in instalments each month over a period of several years
Mortgages are…
Loans from banks and buildings society that are used to buy land and buildings such as offices and shops
Retained profits are…
Profits made in earlier years and kept by the business and used for a variety of reasons including payment for growth
