Business Studies Revision Flashcards

Vocabulary practice flashcards covering Business Studies topics including Operations, Finance, and Marketing concepts, ratios, and strategies.

Cost Leadership

A operational strategy where a business aims to achieve the lowest production costs in its industry.

Goods and Service Differentiation

The process of distinguishing a product or service from competitors by altering its features, quality, or appearance.

Corporate Social Responsibility (CSR)

When a business acts ethically and gives back to society beyond its legal requirements, rather than solely focusing on profit.

Inputs

The resources used in the transformation process to produce a final good or service.

Transformed Resources

Inputs that are changed or converted during the operations process, consisting of materials, information, and customers.

Transforming Resources

The inputs that act upon and change transformed resources, consisting of human resources and facilities.

Sequencing

The order in which operations activities are completed, often visualised using tools such as a Gantt Chart.

Scheduling

The length of time operational activities take, often planned using Critical Path Analysis (CPA).

CAD (Computer Aided Design)

Computer technology used to design and engineer products before production.

CAM (Computer Aided Manufacturing)

Computer software and robotics used to direct and control the manufacturing process.

Task Design

Deciding what specific jobs need to be done and determining whether humans or machines will perform them.

Process Layout

The physical arrangement of workstations, equipment, and machinery to ensure efficient workflow with minimal delays.

Monitoring (Operations)

The process of measuring actual performance by collecting data on production quality, speed, and costs.

Control (Operations)

Comparing actual operational performance against planned performance targets and taking corrective action to fix problems.

Outsourcing

When a business contracts external specialists to complete specific work or operational functions.

Global Sourcing

Acquiring supplies, component parts, or services from overseas suppliers to improve cost efficiency.

Economies of Scale

Cost advantages gained by a business when production volume increases, leading to lower per-unit costs.

Lead Time

The time it takes for a product to move through the supply chain from the business to the end consumer.

Inertia

A psychological barrier to change where managers or workers resist new ways of operating because they are comfortable with existing practices.

Quality Control

Inspecting products at various stages of production to detect and correct defects before reaching the consumer.

Quality Assurance

A proactive system that complies with predetermined standards (such as ISO 9001) to ensure consistent quality throughout production.

Total Quality Management (TQM)

A continuous, business-wide commitment to ongoing quality improvement across all operational steps.

FIFO (First-In, First-Out)

An inventory management strategy where the oldest stock acquired is sold first, best suited for perishable goods.

LIFO (Last-In, First-Out)

An inventory management strategy where the newest stock acquired is sold first, commonly used for non-perishable or fashion items.

JIT (Just-In-Time)

An inventory control approach where materials arrive only as needed in production, eliminating storage and holding costs.

Retained Profits

The portion of net profit retained inside the company for reinvestment rather than distributed to owners as dividends.

Factoring

A short-term financing strategy where a business sells its accounts receivable to a finance company at a discount for immediate cash.

Debentures

A long-term debt instrument issued by a company to investors, backed by specific assets of the firm as security.

Unsecured Notes

A long-term loan provided by investors that is not secured by any specific business assets.

Capitalising Expenses

Accounting for an expense as an asset on the balance sheet because it yields financial benefits beyond one financial year.

Normalised Earnings

Adjusting accounting profits by removing unusual or one-off financial occurrences to display standard recurring revenue.

Hedging

A strategy used to minimize financial risks associated with unpredictable changes in foreign exchange rates, interest rates, or commodity prices.

Derivatives

Financial contracts whose market value is derived from an underlying financial asset, benchmark, or index.

Gross Profit Margin Formula

$$\text{Gross Profit Margin} = \frac{\text{Gross profit}}{\text{Sales revenue}} \times 100$$

Net Profit Margin Formula

$$\text{Net Profit Margin} = \frac{\text{Net profit}}{\text{Sales revenue}} \times 100$$

Return on Owner's Equity (ROE) Formula

$$\text{Return on Owner's Equity (ROE)} = \frac{\text{Net profit}}{\text{Owners equity}} \times 100$$

Expense Ratio Formula

$$\text{Expense Ratio} = \frac{\text{Total expenses}}{\text{Sales revenue}} \times 100$$

Accounts Receivable Turnover Formula

$$\text{Accounts Receivable Turnover} = \frac{\text{Sales revenue}}{\text{Accounts receivables}}$$

Inventory Turnover Formula

$$\text{Inventory Turnover} = \frac{\text{Costs of goods sold}}{\text{Average inventory}}$$

Sale and Leaseback

A liquidity technique where a business sells an owned physical asset to raise cash, and then immediately rents it back from the buyer.

Resource Market

A market comprised of buyers engaged in primary production, acquiring raw materials and natural inputs.

Industrial Market

A market where businesses acquire capital equipment, machinery, and technology required to produce goods.

Intermediate Market

A market where intermediaries like wholesalers and retailers purchase finished products to resell to end consumers.

Deceptive and Misleading Advertising

Illegal marketing practices that present false or deceptive statements regarding product features, origins, or prices.

Bait and Switch Advertising

An illegal practice where a firm advertises a cheap product to lure customers, but sells them a more expensive item because stock is unavailable.

Sugging

An unethical marketing practice where a business sells products disguised as legitimate market research.

Price Skimming

Setting the highest possible price for a novel product upon release to recover research and development expenditure quickly.

Price Penetration

Setting a deliberately low initial price for a product to achieve high sales volume and rapid market share acquisition.

Loss Leader

A promotional item sold at or below cost to attract customers into a store, with the intention that they buy higher-margin items.

Price Points

Establishing distinct price tiers across a product line to cater to varied customer budget levels.

E-Marketing

Utilising internet-based tools, platforms, and digital channels to communicate with and sell to targeted consumers.

Global Customisation

Adapting product features and marketing campaigns to align with the unique cultural, economic, or legal conditions of specific countries.

Global Standardisation

Marketing an unchanged, uniform product internationally under a single global strategy.