Year 11 Business Studies Flashcards
Advertising
A method of communicating information about the product; the business pays for advertising time/space.
Aim
The intention to reach a goal.
Air pollution
The presence or introduction of harmful substances into the air causing disease, allergies or damage to humans, animals, plants or the built environment.
Asset
Something the business owns; it has a value.
Average rate of return
The average profit for the year as a percentage of the original investment. Average rate or return = average return per annum / initial x 100
Boston matrix
A tool for analysing the contribution made by each product in a business’ product portfolio. It plots each product’s position according to its market share and the rate of growth of the market.
Brand image
The consumers’ perception of the brand; its character, qualities and shortcomings. It is developed over time and operates as a consistent theme through advertising campaigns.
Break even chart
A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross.
Break-even chart
A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross.
Buffer stock
A stock of raw materials held in reserve to protect the production process from unforeseen shortages.
Business plan
A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.
Cash
Money that the business has in cash or at the bank.
Cash flow forcast
A financial planning tool that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finance may be needed to maintain liquidity.
Cash inflow
Money paid out by the business to fund its operations or investment activities.
Cash outflow
Money paid out by the business to fund its operations or investment activities.
Centralisation
Maintaining control by keeping authority at the senior levels of the organisation.
Chain of command
The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.
Channels of distribution
The route the ownership of the product transfers from the seller to the buyer; it may be a single transaction or pass through others such as wholesalers, distributors, agents and retailers.
Closing balance
The amount that remains in the account at the end of an accounting period.
Commission
An amount of money paid to an employee that is based on a percentage of the sales he/she achieved; paid in addition to a basic salary.
Competition
The rivalry between businesses looking to sell their goods/services in the same market.
Competitive pricing
Setting the price of a product so that it is in line with competitors’ prices.
Consumer law
Laws designed to ensure that businesses make products that are safe and of good quality, and that they deal with customers honestly and fairly.
Consumer spending
The money spent by households on goods and services to satisfy their needs and wants.
Contracts of employment
A legal document that sets out the terms and conditions of the job for the employer and the employee.
Cost
The money spent by a business on goods and services.
Customer
Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.
Demand
The quantity of a particular product that will be bought at particular price over a specific time.
Directors
The people who are elected by the shareholders to run the business on their behalf.
Disposal of waste
The removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.
Dividend
A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.
E-commerce
Business transactions carried out electronically on the internet.
Employees
Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.
Enterprise
The ability to identify business ideas and opportunities to bring them to fruition and to take risks where appropriate.
Entrepeneur
A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.
Ethical objectives
A business’ goals that relate to fair business practice or moral guidelines and make a positive contributionf to the business’ reputation.
Ethics
The moral principles that guide how a business operates.
Exchange rates
The price of one currency based on another or the cost of buying one currency from another, for example £1 = $1.21.
Expansion
The process of increasing a business’ size.
Export
Good/service sold to a customer in another country.
External growth
The growth of a business by joining with another by merger or takeover.
Factors of production
The elements that combine in the production process: land, labour, capital and enterprise.
Fixed costs
The costs that stay largely the same, regardless of the business’ output.
Flat organisational structure
An organisational structure with a wide span of control and few levels of hierarchy (a short chain of command).
Flow production
Using a production line to make goods continuously and in large numbers.
Growth
A business’ increase in size. Methods include: asset value, employees, market share, markets, profits and sales.
Hierarchy
The management structure of a business/organisation showing the levels of responsibility. It is often shown as an organisation chart.
Import
Good/service bought from a supplier in another country.
Induction
Induction
Training given to a new employee when they start a new job; it provides information about the business, its operation and working practices.
Integration
Two or more businesses join together.
Interest rates
The rate charged for borrowing money over a period of time, or the reward for saving money.
Job analysis
The process of determining what the job entails, including responsibilities and tasks.
Job production
A method of creating a single product to meet an individual order.
Just in case
Organising procurement to ensure that the production process never runs out of stock, reducing the number of sales lost due to insufficient raw materials.
Just in time
Organising the ordering of raw materials and components to be delivered just before they will be used, reducing the need for storage.
Lean of production
Continually working to reduce the resources used to create products: raw materials, labour, machines and premises.
Level of employment
The percentage of the population of working age that are employed.
Liability
The extent of the owner’s/owners’ responsibility for the debts of the business.
Limited liability
owners are not responsible for the debts of the business. The limit of their liability for the business’ debts is the amount they invested.
Loans
A fixed sum of money borrowed for a specified period of time at an agreed rate of interest; repaid in instalments.
Location
The site of a business and the reasoning behind the choice of site.
Loss
Where expenditure is greater than income.
Management
Organising and coordinating business activities in order to fulfil production and meet the business’ objectives.
Market
Where those wishing to buy goods/services make contact with those who have them to sell.
Market share
The proportion of the whole market for a product that is held by the business.
Marketing
The coordination of activities that ensure that customers get what they want, in the amounts they want, when they want it and at a price that suits them.
M-commerce
Business transactions are carried out electronically by mobile phone.
Mortgage
A method of borrowing to purchase property, using the property as security.
National minmum wage/living wage
The lowest hourly rate that can legally be paid by an employer to an employee.
Net cash flow
The difference between cash inflows and cash outflows. Net cash flow = cash inflows – cash outflows
Not for profit organisations
Associations, charities, co-operatives or voluntary organisations set up to further non-monetary ideals such as cultural, educational, religious and public service. Profits/losses are retained/absorbed.
Objective
A specific statement that defines a precise goal that can be measured and delivered within a given time.
On the job training
Employees learn alongside experienced colleagues while they are doing the job.
Opening balance
The amount brought forward from the end of the preceding accounting period so that it is the starting figure for the new one.
Oppotunity cost
The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.
Organisational structures
The way in which the organisation is divided into levels of management, functions and responsibilities.
Overdraft
Borrowing from a bank by drawing from a current account so that the balance becomes less than zero.
Owners
Individuals who own the business or own a share(s) in it, in return for the rights to decision making and profits, balanced with the risks involved.
Part time
Working only a proportion of the full time hours.
Partnerships
A business that is owned and operated by a group of between 2 or more people.
Point of sale
Opportunities to communicate information about the product in the place where it is sold (retail outlet); window displays, hanging signs or shelf signs.
PR
Managing the relations with groups such as consumers, the media, pressure groups or investors to present a favourable impression and generate interest.
Price skimming
Setting a very high price when a product (often technology item) is first introduced to the market in relatively small numbers; only those who can afford to pay high prices to own the latest models will be able to purchase the product. The price is later reduced so that others can afford to buy.
Primary industry
A business that extracts the earth’s natural resources.
Primary research
Collecting information first-hand direct from the public; field research including surveys, questionnaires and testing designed specifically for the market/product.
PLC
A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability.
Procurement
The process of buying goods and services including dealing with:
demand
selection of suppliers
analysing and negotiating prices
making the purchase
managing payments.
Product diffierention
Developing the features that set a product apart from others in the market (such as benefits, style, price) and using that as part of advertising and promotion.
Product life cycle
The stages through which a product travels during its journey from being an idea to being old and dated: research and development, introduction, growth, maturity, decline.
Product portfo
Product portfolio
The range of products offered by one producer.
Productivity
The amount produced by a worker/machine/factory in a given time; the ability to produce more output with fewer resources.
Profit
The difference between the money received from the sale of a good/service and the amount it cost; the amount that remains after all the costs have been paid.
Profit = total revenue – total cost
Profit sharing
A scheme that pays employees an additional amount based on the year’s profits.
Promotion
Communicating information about the product to:
make consumers aware of a product
remind customers about a product
persuade customers to buy.
PLC
A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability.
Purchasing
The business buys the goods and services that it needs for producing the goods it sells or for delivering the services it sells.
Qualitative market research
Collecting information about potential customers’ opinions and preferences about the attributes/characteristics/properties of a product; open questions allow respondents to express their own views by not limiting their responses.
Quantative market research
Using sampling techniques such as surveys where the findings are expressed numerically; closed questions allow a limited choice of responses and are easy to turn into statistics for analysis.
Raising finance
Getting the money to pay for starting the business or for developing it.
Raw materials
Businesses that use raw materials that are heavy and/or bulky choose to locate close to their suppliers to reduce the cost of transport or storage.
Recruitment
The process of hiring a new employee.
Recycling
The conversion of waste into reusable material.
Retailers
A business or person that sells goods to the consumer.
Retained profit
An internal source of finance; a portion of the year’s profit is kept back to fund projects.
Revenue
The income generated from the sale of goods/services.
Risk
The possibility that the return on investment will be lower than expected.
Salary
A method of paying employees for their work; based on a fixed annual amount, normally paid monthly.
Scarce resources
When the raw materials that are available are not sufficient to meet needs.
Secondry research
Examining information from published sources; desk research using information that has been collected for other purposes.
Selection
The process of choosing which applicant to employ.
Service
An action that is carried out to fulfil a need or demand in return for payment.
Share issue
New shares in a business made available for the public to buy.
Share holder value
The value that a shareholder is able to get for the money invested in the business: capital gains, dividend payments, pay-outs to shareholders or proceeds from buyback programmes.
SociaL objectives
A business’ goals that relate to fair treatment of the people concerned: customers, investors, suppliers or workers.
Sole traders
A business that is owned and operated by one person.
Sources of finance
Ways of obtaining the funds the business needs; money may be needed to meet short or long term needs.
Span of control
The number of people for whom a manager is directly responsible.
Stake holders
Those with an interest in the way that a business operates.
Styles of managments
The methods used by those in leadership roles to achieve the most effective outcomes from the employees for whom they are responsible.
Supplier
A business that provides goods/services.
Supply chain
The network of organisations, people, activities, information and resources that take the product/service from supplier to customer.
Sustainability
The process of operating without damaging the environment or depleting natural resources.
Takeover
One business takes control of another.
Target market
The particular group of customers to which a business aims to sell its product; a particular market segment.
Technical economies of scale
The benefits that large businesses gain from having the funds to invest in expensive machinery that brings cost savings.
Telesales
Attempting to sell a good/service by making the initial contact by telephone.
Total costs
All the costs involved in producing goods/services. Total costs = fixed costs + variable costs
Trade credit
The process of buying items from a supplier and paying for them later; for example, 30 days after invoice date.
Trade descriptions
Protecting customers from false or misleading descriptions about products or their prices.
Traffic congestions
The effects of overuse of transport networks, for example slower speeds, traffic queues and longer journey times.
Training
Employees learn the skills and techniques needed to do the job or to prepare for a new role.
USP
The key benefit of a good/service; it differentiates the product from others and will be the focus of advertising and promotion.
Unit cost
The average cost of each unit. Unit cost = total cost ÷ quantity
Unlimited liability
When the owner(s) are responsible for all the debts of the business. Their personal funds would be used to settle the business’ debts if the business’ funds were insufficient.
Variable costs
The costs that change as the business’ output changes.
Wage
A method of paying employees for their work based on an hourly, weekly or piece of work basis, usually paid weekly or monthly.
Wants
Things that people would like to have; not limited to the things they need to survive.
Waste
The unwanted material left over from the production process; it may have little or no value and the business may have to pay for its disposal.
Wholesaler
A business or person that buys goods in large quantities from producers, stores them in warehouses and sells them on to retailers.
Word of mouth
A business or person that buys goods in large quantities from producers, stores them in warehouses and sells them on to retailers.
Zero-hour contract
A contract of employment where the employer is not obliged to provide any minimum hours of work; the employee is not obliged to accept any work that is offered.
