KSB-111 PESTLE 2

Functional Areas of Business

The different departments within a business, including management, operations, marketing, accounting, and finance.

Stakeholders

Individuals or groups that have an interest in the success and performance of a business, including customers, owners, and employees.

Goods vs. Services

Goods are tangible items sold to consumers; services are activities performed for consumers.

Gross Domestic Product (GDP)

The total value of all goods and services produced within a country's borders in a given year.

Inflation

The rise in prices of goods and services over time, affecting consumers and businesses.

Monetary Policy

The management of the money supply and interest rates, controlled by the Federal Reserve.

Fiscal Policy

Government policies regarding taxation and spending to influence the economy.

Economic Recession

A significant decline in economic activity across the economy lasting more than a few months.

Oligopoly

A market structure with a few sellers offering similar products.

Monopoly

A market structure where a single seller controls the entire market for a product or service.

Capitalism

An economic system where the means of production are privately owned and operated for profit.

Socialism

An economic system where the means of production are owned and controlled by the government.

Consumer Price Index (CPI)

An index measuring the average change in prices over time that consumers pay for a basket of goods and services.

Entrepreneurship

The process of starting and running one's own business to generate profit.

Market Demand

The total quantity of a good or service that consumers are willing and able to purchase at various prices.

Supply and Demand

The relationship between the availability of a product and the desire for that product, which determines its price.

Labor Force

The total number of individuals available to work within a given economy.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good changes in response to a change in its price.

Balance of Trade

The difference between a country's exports and imports over a specific period.

Investment

The act of allocating resources, usually money, in order to generate income or profit.

Budget Deficit

A situation where government spending exceeds its revenue over a particular period.

Import

A product brought into one country from another for sale.

Export

A product sent from one country to another for sale.

Market Structure

The organization of a market, largely defined by the number of firms and the nature of competition.

Price Skimming

A pricing strategy where a business sets high prices initially and then lowers them over time.

Penetration Pricing

A pricing strategy where a business sets a low price to enter a competitive market and attract customers.

SWOT Analysis

A strategic planning tool that assesses the strengths, weaknesses, opportunities, and threats of a business.

Value Proposition

The promise of value to be delivered to the customer, explaining how a product or service meets their needs.

Brand Equity

The value added to a product or service based on the brand name and perception in the market.

Corporate Social Responsibility (CSR)

Business practices involving initiatives that benefit society, often focusing on sustainability and ethical behavior.

E-commerce

The buying and selling of goods and services over the internet.

Market Segmentation

The process of dividing a broader market into smaller, distinct groups of consumers with similar needs.

Competitive Advantage

Factors that allow a company to produce goods or services better or more cheaply than its competitors.

Operating Cost

The expenses associated with the maintenance and administration of a business on a daily basis.

Revenue

The total income generated from sales of goods or services before any expenses are deducted.

Net Profit

The actual profit after working expenses not included in the calculation of gross profit have been paid.

Cash Flow

The total amount of money being transferred into and out of a business, affecting its liquidity.

Key Performance Indicators (KPIs)

Measurable values that demonstrate how effectively a company is achieving its key business objectives.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio.

Lean Management

A production practice that considers the expenditure of resources in any aspect other than the direct creation of value for the end customer to be wasteful.