Business Studies O-Level Notes - Vocabulary Flashcards

Vocabulary flashcards covering core business concepts, definitions, formulas, structures, production methods, costs, marketing strategies, and market segmentation from the O-Level Business Studies notes.

Market share

A percentage of overall sales in an industry.

Repeat sales

Customers returning to buy the product from the same business.

Primary production

The stage of industry involving the acquisition of raw materials, such as mining metals and coal, drilling oil, tapping rubber, farming foodstuffs, and trawling fish.

Secondary production

The manufacturing and assembly process that converts raw materials into components and assembles them into finished products.

Tertiary production

Commercial services that support the production and distribution process, such as insurance, transport, advertising, warehousing, retail, teaching, and health care.

Chain of production

The stages of production—primary, secondary, and tertiary—that work together to provide consumers with finished goods.

Incorporated

A firm with a separate legal existence that can sue or own assets in its own right.

Limited liability

A condition where business owners are not personally liable for the firm's debts, and their losses are limited to the amount invested in the business.

Shareholder

An individual or institution that owns one or more equal parts (shares) of a limited company.

Audit

An independent check on the accounts of a company.

Private Limited Company (Ltd) advantages and disadvantages

A business structure that is easy and inexpensive to set up with closely connected control, but lacks capital due to no share issue and gets no benefit from economies of scale.

Public Limited Company (PLC) advantages and disadvantages

A business structure capable of raising large amounts of capital from share issues and lowering unit costs, but faces risks of poor labor relations, internal conflicts, and takeovers.

Sole trader

Any business that is owned and controlled by one person, lacking a separate legal existence from its owner.

Unlimited liability

A situation where owners are personally liable for the firm's debts and may be forced to pay them out of their personal funds or sell personal assets.

Deed of partnership

A contract drawn up for a partnership stating the type of partnership, capital contributed by each party, and how profits and losses will be shared.

Sleeping partner

A partner who invests capital in a business but does not take part in its day-to-day running.

Public ownership

Services or industries owned by the state and controlled by central or local government to provide essential services for the general public, funded through taxation.

Public Sector Borrowing Requirement

The cost of funding public services, which is financed by taxation either directly through income tax or indirectly through National Insurance.

Diversify

The strategy of moving into another area of business.

Takeover

When a company buys a majority of shares (at least $51\%$) in another company, taking control without the smaller firm's board of directors being able to prevent it.

Merger

An agreement between two companies to join together, usually involving a complete restructuring of the combined business entities.

Chain of command

The formal line of communication starting from the Board of Directors and Managing Director down through managers and section heads to shop floor staff.

Span of control

The number of workers directly under the supervision of a specific manager in a hierarchy.

Line manager

A person directly responsible for managing a group of workers within a specific span of control.

Breakeven point in units formula

$$\text{Breakeven point in units} = \frac{\text{Fixed Cost}}{\text{Sales Price} - \text{Variable Cost}}$$

External economies of scale

Cost reductions that occur when an entire industry concentrates in one location, allowing firms to share expertise, training, research, and lower component delivery costs.

Economic development areas

Regions where the government attempts to attract firms by offering incentives, usually to stimulate the local economy or reduce high unemployment.

Footloose industries

Industries, such as IT companies and call centers, that can locate anywhere in the world because they rely on telecommunication lines rather than specific raw materials or location factors.

Channel of distribution

The route a product takes from its beginning with the manufacturer to the final consumer.

Job production

A production method used when a product is individually designed to a customer's specific orders, requiring labor-intensive, skilled specialist work at a high cost.

Batch production

A production method where a set number of identical items are made in a single run or batch before switching to another product line variation.

Mass or flow production

A capital-intensive production method used for high volumes of identical products moving continuously down a production line, benefiting from low unit costs.

Automation

The use of computer-controlled machinery to perform specific tasks in mass production, which improves quality and output but can lead to worker redundancies.

Computer-Aided Design (CAD)

Technology allowing designers, engineers, and architects to manipulate 3D images on-screen, saving time and costs by making real-time alterations without building physical prototypes.

Computer-Aided Manufacture (CAM)

The application of computer technology and robotics in production to execute physical movements, particularly useful for repetitive or hazardous tasks.

Fixed costs

Expenses that do not change regardless of how many units of a product are made, such as factory rent, insurance premiums, and administration salaries.

Variable costs

Expenses that alter directly as output level changes, such as raw material costs and piece-work wages.

Marginal cost

The additional cost incurred by producing one additional unit of an item.

Production cost behavior chart

A chart illustrating how fixed costs remain constant across output levels while variable costs and total costs increase proportionally with output.

Average cost of production formula

$$\text{Average cost of production} = \frac{\text{Total costs}}{\text{Total output}}$$

Unique selling point

A unique look, design, or brand identity that differentiates a product from its competitors.

Impulse buy

A spontaneous decision to purchase a product.

The 4Ps

The key elements of the marketing mix: Product, Price, Promotion, and Place.

Target market

The end-user or consumer group whom a producer aims to sell its products or services to.

Skim pricing

Setting a high initial price for luxury or medical products to maximize profits and quickly recover research and development costs.

Penetration pricing

Setting a low initial price for fast moving consumable goods to gain a large market share and achieve high long-term turnover.

Cost plus pricing

A pricing method where a firm adds a profit mark-up to the unit cost of a product.

Field research

The collection of primary or new data directly through face-to-face interviews, phone calls, postal/internet surveys, and product testing.

Desk research

The gathering and analysis of existing secondary data from internal sales statistics, government statistics, company reports, and journals.

Disposable income

The money remaining after essential expenditures and living costs have been covered.

Market segmentation categories

The five main categories used to divide the general population into distinct market groups: Culture, Lifestyle, Gender, Income, and Age.

Saturation point

The stage where a market is full of competing products, making it difficult for a product to achieve additional sales profits.

Obsolete

When a product becomes outdated due to new models, technological advancements, or changes in consumer fashion.

Product life-cycle

The timeline of sales and profit stages that a product passes through: Introduction, Growth, Maturity, and Decline.

Job Enrichment: involves adding tasks that require more skill and responsibility to a job. This gives employees a sense of trust from senior management and motivate them to carry out the extra tasks effectively. Some additional training may also be given to the employee to do so. E.g.: a receptionist employed to welcome customers will now, as a result of job enrichment, deal with telephone enquiries, word-process letters etc.

Team-working: a group of workers is given responsibility for a particular process, product or development. They can decide as a team how to organize and carry out the tasks. The workers take part in decision making and take responsibility for the process. It gives them more control over their work and thus a sense of commitment, increasing job satisfaction. Working as a group will also add to morale, fulfill social needs and lead to job satisfaction.

Opportunities for training: providing training will make workers feel that their work is being valued. Training also provides them opportunities for personal growth and development, thereby attaining job satisfaction

Opportunities of promotion: providing opportunities for promotion will get workers to work more efficiently and fill them with a sense of self-actualisation and job satisfaction