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business a-level > unit 7 external environment > Flashcards

unit 7 external environment Flashcards

1
Q

average rate of return

A

average annual profit as a percentage of the initial investment

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2
Q

ARR

A

total net cash flow ÷ no of years / initial investment X100

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3
Q

barrier to entry

A

factors that make it difficult / impossible to enter an industry

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4
Q

boom

A

above trend growth of GDP

• characterised by high consumer / business confidence, high investment rising prices, low unemployment

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5
Q

BRIC economies

A 
four large emerging economies
Brazil
Russia
India
China
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6
Q

budget deficit

A

taxation receipts are less than government spending

boosts overall demand for firm’s products

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7
Q

budget surplus

A

taxation receipts greater than gov spending

reduces demand in economy

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8
Q

business (trade) cycle

A

regular fluctuation of income and output (GDP) within an economy over time
boom, recession, slump, recovery

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9
Q

carroll’s csr pyramid

A 
sets out priorities for business to become good corporate citizens
philanthropic
ethical
legal 
economic
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10
Q

cartel

A

formal / written agreement to restrict competition and boost profits

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11
Q

competitive advantage

A

distinctive feature that gives a firm an edge over rivals

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12
Q

competition and markets authority

A

main UK organisation set up by gov to enforce competition law / tackle constraints on competition
investigate mergers / monopolies / firms who abuse market power

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13
Q

competition policy

A

gov action to prevent abuse of monopoly power and restriction of competition
policy focused on monopoly / mergers/ restrictive practices

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14
Q

conflict of interest

A

diff individuals / stakeholders want diff outcomes / decisions to be made

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15
Q

contractionary policy

A

leads to reduction in demand within economy due to gov action
higher interest rates / taxation / lower gov spending

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16
Q

core competencies

A

key area of strength for the business

gives competitive advantage

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17
Q

corporate objectives

A

specific time based targets relating to the role business

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18
Q

cost push inflation

A

general rise in prices cause by an increase in costs

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19
Q

CSR

A

commitment to behave ethically and contribute to economic development
improve quality of life of workforce / wider community

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20
Q

CPI (consumer price index)

A

measures average change month to month in prices of consumer goods
using typical basket of items

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21
Q

customs union

A

group of countries that do not impose tariffs (taxes on imports) on each other’s goods
agree to impose common external tariffs on goods outside customs union

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22
Q

demand pull inflation

A

general rise in prices due to nationwide rise in demand for products

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23
Q

disposable income

A

the amount of income available to spend after taxes / benefits have been dealt with

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24
Q

disposable income =

A

gross income - direct tax + state benefits

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25
Q

disruptive technology / innovation

A

introduction of a new process / product that radically changes competitive advantage of an existing market

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26
Q

economic growth

A

rise in the real GDP meaning an increase in the amount of goods / services produced per head of population over a period of time

27
Q

Elkington’s triple bottom line

A

accounting framework in which businesses assed not only financial impact but social / environmental impacts
people, profit, planet

28
Q

emerging market

A

country whose GDP is growing faster than average and has potential for further growth

29
Q

enterprise finance guarantee scheme

A

gov loan guarantee scheme to help provide additional lending to viable small / medium sized enterprises that lack adequate security of track record for a commercial loan

30
Q

enterprise policy

A

gov action to encourage the start up of new businesses and health / growth of young businesses

31
Q

environmental audit

A

check up on the level of pollution emissions / wastage / energy consumptions / recycling levels and use of non renewable resources of a firm

32
Q

exchange rate appreciation

A

a rise in value of the currency compared to other currencies

33
Q

exchange rate depreciation

A

a fall in the value of the currency compared to other currencies

34
Q

expansionary economic policy

A

any gov action that stimulates the increase in GDP

35
Q

fiscal policy

A

government spending and taxation to influence the economy

36
Q

functional decision making

A

policies and tactic adopted by the individual business departments

37
Q

globalisation

A

growing trend towards worldwide markets in products / services / capital / labour unrestricted by barriers
increasing integration go worlds regional / local economies into single international market

38
Q

greenwash

A

broadcasting of misleading information by an organisation to conceal its abuse of the environmental order in order to present a positive public image

39
Q

GDP

A

total value of goods and services produced by a nation within a year

40
Q

hedging

A

any technique designed to reduce / eliminate financial risk

•insuring against future exchange rate changes

41
Q

income elasticity of demand

A

shows how income changes affect demand for certain goods

42
Q

YED

A

% change in q / %change in income

43
Q

inferior good

A

a good for which demand falls as income rises

negative YED value

44
Q

inflation

A

sustained increase in average prices of goods / services

represents a fall in the purchasing power of money

45
Q

inflation target

A

level of inflation that the gov expects bank of England’s monetary policy committee to achieve through ue of monetary policy

46
Q

infrastructure

A

physical organisation of structures / facilities needed for the operation of a society
social capital assets business operations

47
Q

investment appraisal

A

judging the attractiveness of a plan to generate future income

48
Q

Kaplan and Norton’s balanced scorecard

A 
strategy performance management tool that focuses on a broader range of KPIs
financial performance
customer perspective
internal business process performance
learning / growth perspective
49
Q

m commerce

A

buying and selling of goods and services through mobile devices

50
Q

mission statement

A

memorable sentences that encapsulate the key reason that the business exists
• for employees

51
Q

monetary policy

A

control of interest rates / money supply in order to influence level of spending in economy

52
Q

multi channel

A

marketing strategy that offers customers choice of ways to buy products

53
Q

new enterprise allowance

A

gov scheme to support new business
grant loan helps start up costs (repaid within 5 years)
offered a mentor

54
Q

normal good

A

a good for which demand rises as income increases

positive YED

55
Q

oligopoly

A

market wherein an industry is dominated by a small number of businesses who are inter-dependent
free trade

56
Q

open trade

A

no discrimination against imports from exports to foreign jurisdictions
free trade

57
Q

payback

A

time taken to recover cost of investment

58
Q

philanthropy

A

desire to promote the welfare of others
desire to promote ethical practice
donation

59
Q

porter’s generic strategies

A 
4 general ways to gain competitive advantage 
cost leadership
cost focus
differentiation
differentiation focus
60
Q

porter’s 5 forces

A 
framework for analysing level of competition and profitability within an industry
contestability
alternatives
buyer power
supplier power
61
Q

pressure group

A

an organisation whose members have a common cause, seek to influence political / corporate decision makers to achieve a declared objective

62
Q

prime mover advantage

A

benefit of being the first business to produce a product / enter a market

63
Q

protectionism

A

attempt by gov to impose restriction on trade in goods / services
tariffs / quotas

64
Q

quantitative easing

A

increasing of money supply by electronic money creation

gov use this money to buy bonds to reduce long term interest rates / encourage private banks to lend more

business a-level (10 decks)

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