Paper 1 Terminology Key Terms IB Business

Public Limited Company

Limited liability company where shares can be bought and sold on stock market by general public without prior approval of existing owners. All financial information is open to public for inspection.

Multinational Company (MNC)

Corporation that owns and controls produciton of goods or services in at least one country other than its home country (i.e. has satellite offices in 1 country or more).

Diversification

Strategic expansion of company into new products, services, or markets. It’s done to capture new opportunities, and enhance overall business resilience. It’s high risk expansion strategy.

Corporate Social Responsibility (CSR)

Practice of companies taking responsibility for their impact on society and environment, balancing profit-making activities with social good. They integrate social and environmental concerns into their operations, in order to attract stakeholders such as ethical investors.

Avatar

Computer-generated characters used to create engaging and visually appealing content that resonates with digital audiences, particularly on social media.

Internal Growth

Expansion of a company through its own resources, such as using retained profits, increasing production capacity or enhancing sales efforts, rather than through external influences like mergers or acquisitions.

External Growth

Expansion of a company through mergers, acquisitions, or partnerships with other businesses, enabling faster growth, option to diversify their product/service offerings, and access to new markets or resources.

Promotional Strategies

Methods used by businesses to promote their products or services, including advertising, sales promotions, public relations, and personal selling. Business uses promotional activities to communicate its value proposition to potential customers and differentiate itself from competitors.

Taking Over/Acquisition

When one company successfully bids to control or acquire another. Takeovers can be done by purchasing a majority stake in the target firm, gaining control over its assets, operations, and resources. This strategy is often used to achieve rapid growth, expand market reach, or eliminate competition.

Product Portfolio

collection of all the products or services offered by a company. This could lead to customer satisfaction as this gives them a diverse/wide range of products to choose from, satisfying their wants and needs.

Sustainability

The ability to meet present needs without compromising the ability of future generations to meet their own needs. In business, this often involves practices that promote environmental stewardship, social responsibility, and economic viability.

Manufacturer

Person or company that produces finished goods from raw materials using various tools, equipment, and processes, and then sells the goods to consumers, wholesalers, distributors, retailers, or to other manufacturers for the production of more complex goods.

Branding

Process of creating a unique identity and image for a product or company in the minds of consumers often through logos, slogans design and advertising to differentiate it from competitors and build customer loyalty.

Advertising

Paid promotion of products services, or brands to consumers through various media channels, with the goal of increasing awareness, sales, and brand loyalty.