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GCSE AQA Business Studies Unit 1 and Unit 2 > Unit 2: Growing as a Business > Flashcards

Unit 2: Growing as a Business Flashcards

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1
Q

Merger

A

An agreement between business owners to combine two businesses owners and operate as a larger one

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2
Q

Takeover

A

Purchasing another business from it’s owner

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3
Q

Horizontal integration

A

Joining two businesses in the same industry and stage of production (e.g two hairdressing business)

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4
Q

Vertical backward integration

A

Joining two businesses in the same industry but a different stage or production, towards the supplier (e.g a computer manufacturers takeover of a ‘chip’ maker)

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5
Q

Diversification

A

Joining two businesses in different industries (e.g an insurance company merges with a publishing business)

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6
Q

Vertical forward integration

A

Joining two businesses in the same industry but a different stage of production, towards the customer (e.g a farmer’s takeover a butcher’s shop)

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7
Q

Limited company

A

A business recognised as a legal unit that offers investors (shareholders) limited liability

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8
Q

Private limited company (ltd)

A

A company that cannot sell shares to the general public. It is not listed on the Stock Exchange

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9
Q

Public limited company (PLC)

A

A company able to sell shares to the general public by being listed on the Stock Exchange

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10
Q

Limited liability

A

Investors (shareholders) in a limited company can only lose their investment in the business if it fails; they cannot be forced to sell assets to pay off firm’s debts

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11
Q

Shareholders

A

Part owners of a limited company - they own shares in it

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12
Q

Dividend

A

Payment made to shareholders from company profits - usually made annually

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13
Q

Divorce between ownership and control

A

When directors control public limited company and thousands of shareholders own it, but the two groups may have different objectives

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14
Q

Ethical objective

A

A business aim to ‘do the right thing’ according to the values and beliefs of managers, even if this is not the most profitable way (e.g. pay workers in low-wage countries above average rates)

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15
Q

Environmental objective

A

A business aim to protect the environment during its operations (e.g. to recycle waste water). This will reduce social costs

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16
Q

Social costs

A

The costs of business activity, including both financial and costs paid by the firm and the costs on society (e.g. factory pollution)

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17
Q

Social benefits

A

The benefits of a business activity, not just to the firm but to society (e.g. new jobs created by business expansion)

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18
Q

Globalisation

A

Increasing trend for goods to be traded internationally and or companies to locate abroad

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19
Q

Offshoring

A

Making products or parts of products in other countries. Services can be offshored too, as with telephone call centres moving to India

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20
Q

Multinational

A

A business with operations in more than one country

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21
Q

Product portfolio

A

The range of products sold by a business

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22
Q

Target Market

A

The group of consumers aimed at by the business

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23
Q

Diversify

A

Spreading risk by selling in different markets

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24
Q

Product Life Cycle

A

The lifespan of a product, recorded in sales from launch to being taken off the market

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25
Q

Extension Strategies

A

Steps taken to extend the life cycle or the product

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26
Q

Competitive Pricing

A

Setting a price for a product based on prices charged by competitors

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27
Q

Price Skimming

A

Setting a price at a high level to create a high-quality and exclusive image

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28
Q

Cost Plus Pricing

A

Setting a price by adding a profit mark up

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29
Q

Loss Leader Pricing

A

Setting a price below cost hoping to gain other profitable sales

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30
Q

Promotion

A

All the ways a business communicates to consumers with the aim of selling products

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31
Q

Advertising

A

Communication to consumers using a television and other media encouraging them to buy a product

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32
Q

Sales Promotion

A

Activities to attract consumer to a product to increase sales

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33
Q

Sponsorship

A

A business pays for an activity or an event to gain publicity

34
Q

Wholesaler

A

Middleman or distributor that buys in a bulk

35
Q

Telesales

A

Selling through a telephone contact alone

36
Q

Mail Order

A

Direct marketing through mail shots

37
Q

Retained profit

A

Profit kept in the business after tax and dividends have been paid.

38
Q

Sale and Leaseback

A

Selling an asset, such as a building, to a leasing company and paying an annual leasing charge so that the asset can still be used.

39
Q

Profit and Loss Account

A

This shows whether the business made a profit or loss over the last period. It is also known as the income statement.

40
Q

Sales Revenue

A

The value of goods sold.

41
Q

Cost of Sales

A

The cost to the business of the goods sold.

42
Q

Gross Profit

A

The difference between sales revenue and cost of making the products sold.

43
Q

Overheads

A

Expenses of the business that are not directly part of the production process.

44
Q

Net profit

A

The difference between sales revenue and the total costs of the business.

45
Q

Gross Profit Margin

A

The percentage of sales revenue that is gross profit.

46
Q

Net Profit Margin

A

The percentage of sales revenue that is net profit.

47
Q

Balance Sheet

A

This lists the value of a company’s assets and liabilities.

48
Q

Assets

A

Item of value owned by a business.

49
Q

Liabilities

A

Debts owned by a business.

50
Q

Liquidity

A

How easy it is for a business to pay it’s short-term debts.

51
Q

Organisational structure

A

The internal links between managers and workers showing lines of authority

52
Q

Layers of management

A

The number of different levels of management and responsibility in a structure

53
Q

Span of control

A

The number of junior employees each manager is directly responsible for

54
Q

Centralisation

A

Senior managers take all important decisions

55
Q

Decentralisation

A

Decision-making power is spread to managers in branches and divisions of the business

56
Q

Recruitment

A

Attracting people to apply for job vacancy

57
Q

Job analysis

A

Identifying the tasks and skills needed to perform a job well

58
Q

Person specification

A

A profile of the type of person likely to make a good applicant

59
Q

Internal recruitment

A

Appointing an existing employee of the business to fill a vacancy

60
Q

External recruitment

A

Appointing an employee of another business to fill a vacancy

61
Q

Induction training

A

Initial training to familiarise new recruits with the systems of a new business

62
Q

On-the-job-training

A

Takes place when an employees receive training as they are working at the place of work

63
Q

Off-the-job-training

A

Takes place away from the job at another place (e.g. the business’s training centre or college)

64
Q

Appraisal

A

Assessing how effectively an employee is working

65
Q

Motivated

A

The will to work due to the enjoyment of the work itself

66
Q

Retaining staff

A

Keeping existing staff in business, which cuts down the cost of recruitment, selection and training

67
Q

Autocratic management

A

Managers who believe in taking all decisions and just passing instructions to workers

68
Q

Democratic management

A

Managers who involve the workers and less senior managers in decision-making

69
Q

Flow Production

A

Large-scale production where each stage of production is carried out one after the other, continuously, on a production line

70
Q

Specialisation

A

Work is divided into separate tasks or jobs that allow workers to become skilled at one of them

71
Q

Division of Labour

A

Breaking a job down into small, repetitive tasks that can be done quickly by workers or machines specialised in this one task

72
Q

Lean production

A

A production approach that aims to use fewer resources by using them more efficiently

73
Q

Kaizen

A

Continuous improvement

74
Q

Just-in-time manufacturing (JIT)

A

Ordering supplies so that they arrive just when they are needed and making goods only when ordered by customers

75
Q

Lean design

A

Producing new designs as quickly as possible

76
Q

Economies of Scale

A

The reasons why production costs of each item fall as a firm expands

77
Q

Diseconomies of Scale

A

The reasons why production costs of each item rises as a firm expands

78
Q

Quality Product

A

Goods or service that meets customers’ expectations and is there ‘fit for purpose’

79
Q

Outsourcing

A

Using the businesses to make all or part of a product or provide an aspect of the customer care

80
Q

Quality Standards

A

The expectations of customers expressed in terms of the minimum acceptable production or service standards

81
Q

Quality Assurance

A

Setting and trying to meet quality standards throughout the business

82
Q

Total Quality Management (TQM)

A

An approach to quality that aims to involve all employees in the quality improvement process

GCSE AQA Business Studies Unit 1 and Unit 2 (12 decks)

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