Business Yr12 (AQA A Level)

Hello, I have another set if you don’t have the right terms

Adverse varience

When actual costs are smaller than budget costs

Bank overdraft

The amount that can be overspent on a bank account (be overdrawn)

Boston matrix

Product portfolio analysis of a business into 4 categories

Branding

how consumers recognise and identify with a product

Break-Even

The point when total sales is equal to total costs

Budget

Income and costs predicted over a period of time

Buffer inventory

Minimum amount of stock a business requires to operate

Capacity utilisation

The amount of total capacity is being used

Cash flow

Cash moving into and out of a business

Cash flow forecast

The projection of likely cash inflows and outflows

Competition

Other businesses that compete for a share in the same market

Competitiveness

The business' ability to offer a better product than its competitors (measured in customers)

Correlation

Relationship between two variables

Total Contribution

The difference between the total sales and total variable costs

Delegation

Where a responsibility or task is passed onto another employee in the business

Demand

Amount of a good or service that customers desire

Distribution channel

How the business gets its products to the end consumer

Dividend

The portion of corporate profits paid out to share holders

Elasticity of demand

Responsiveness of demand towards the change of price

Extrapolation

Using previous data to predict future data

Favourable variance

When the actual is higher than budgeted results

Fixed costs

Costs that do not vary with the level of output

Hierarchy

The structures and levels of management and supervision within a business

Income elasticity of demand

The responsiveness of demand to a change of income

Inventory control

Process that ensures that the business has sufficient but not too much stock

Job design

The way which tasks are combined to form a job

Labour productivity

Output produced per employee over a given time

Lean production

Methods of production where a business can reduce waste

Limited liability

Owners are only liable for the money they have invested

Margin of safety

Difference between actual level of output and break even

Market capitalisation

Margin of outstanding shares in a plc

Market growth

The percentage growth of a market over a period of time

Market research

planning, collecting and analysing data to make a market decision

Market segmentation

dividing a market into smaller segments according to e.g. needs so that a business can target specific customers.

Market share

a share of the total market that is owned by a particular business, product or brand

Marketing mix

Use of strategies to help a business reach its objectives, also known as the 7'ps (Place, people, process, product, price, physical and promotion)

Mass customisation

The ability to customise products for individuals on a large scale

Mass market

Targeting a product or service at all customers within a market, e.g. Coca-cola

A niche market

Aiming a product at a small segment of a larger market

Multiple segmentation

Dividing a market into segments then developing diff products for each segment

Market mapping

Analyses market conditions to identify the position of one product or brand relative to others in the market in terms of given criteria

Opportunity costs

The costs of making a decision that is measured by the benefits foregone of the next best alternative

Organisational structure

The way jobs and roles are organised within a business are structured

Penetration pricing

Strategy that lowers the price in order to gain a large market share

Price Elasticity of demand

The response of demand towards a change of the price of a product

Price skimming

Price strategy that involves setting a high price for a new product to take advantage of the customers that are prepared to pay

Primary research

Market research that involves collecting data that does not yet exist

Private limited company

A business owned and controlled by stakeholders whose shares CANNOT be publicly traded

Product life cycle

A common pattern of sales over time into the product's stages from its introduction to withdrawal

Product portfolio

Products and brands owned and operated by a business

Profit for the year

income and expenditure that is taken into account

Profitability

The generation of profit from activities

Public limited company

A business whose shares can be traded publicly on the stock exchange

Qualitative research

Research that concerns the collection of beliefs, intentions, opinions and research

Quality

When a product receives satisfaction from its customers

Quality assurance

the prevention of mistakes in order to get the production of a product right the first time

Quantitive research

Collecting data through statistics that can be research quantified

Sample

A subset of a certain amount

Sole trader

A one-man business with unlimited liability

Spare capacity

How much a business can produce more with existing resources

Stakeholder

An individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project.

Stakeholder mapping

provides a systematic way to identify the expectations, needs, importance, and relative power of various stakeholders

Total costs

Total variable - fixed costs

Trade union

An organisation set up by employees to improve the working conditions

Unit costs

Average production costs per unit

Unlimited liability

Debt incurred by a business is not limited to the business. A sole trader risks losing personal assets

Variable costs

Costs directly in proportion to the business' output

Variance

The difference between the budget and the actual (could be favourable or adverse)

Venture capital

Specialists who invest to finance a launch, development, or expansion of a business

Waste

Cost of production section made of completed products or raw materials that could not be retained in production

Works council

Employees and managers who meet up and discuss work related issues

Share capital

The total value of capital raised from shareholders by the issue of shares.

Balance Sheet

Financial statement of assets, liabilities and equity

Capital

Money invested into the business

Income Statement

a financial statement showing the revenue and expenses for a fiscal period

Innovation

New ideas to extend the life-cycle of a product or brand

Merger

Two or more firms agree to come together into one firm under one board of directors

Takeover

an act of taking control of a company by buying most of its shares

differentiation strategy

Offering more benefits than rivals in the same industry

Competitive Advantage

an aspect that provides greater value for customers than competitors can in the market

economies of scale

Lower production costs as a result of larger volume of production

Vertical Integration

When a business joins another at different stages of production

Kaizen

Continuous improvement that involves all participants.

Disadvantages of kaizen

- Meeting in groups takes workers away from their usual work

- The workforce may not like the continuous changes

- There may be problems with suggestions that cannot be taken on board.

Advantages of Kaizen

- Improves quality and efficiency

- Can improve motivation

- Easier to implement

- Reinforces teamwork/ motivation

- unit costs r lower

E-commerce

Buying or selling over the internet, usually from a website.

Just-in-time (JIT)

An inventory-management approach in which supplies arrive just when needed for production or resale

Advantages of JIT

- Allows production to be lean (all stock is used in production)

- No money is tied up in stock, improving cash flow and working capital

- No warehouse is required, saving on storage costs

- The business is more responsive to changing external factors

- improves cash flow

Disadvantage of JIT

- Relies on suppliers being on time

- May find out that JIT is too stressful for workers

- more danger of failing to meet customers order In time

Time-based management

involves setting strict time limits in which tasks must be completed

Total Quality Management

a comprehensive approach - led by top management and supported throughout the organization - dedicated to continuous quality improvement, training, and customer satisfaction

ISO 9000

the common name given to quality management and assurance standards

What do managers do?

1. set objectives

2. Analysing data or info

3. Leading staff

4. Making decisions

5. Reviewing

Authoritarian

like a dictator. Theory X, Hard HR

democratic

powers are not kept at the top of an organisation. Theory Y, soft HR

Laissez-faire

means that the leader has minimal input in the decision making process and leaves the running of the organisation to the employees.

Tannenbaum Schmidt Continuum

shows the relationship between the level of freedom given to employees in relation to decision making, and the level of authority retained by the manager.

Blake Mouton Grid

plots the leader's concern for production against the leader's concern for the people working for an organisation.

Centralistaion

Decision making powers r kept at top of hierarchy u

Decentralisation

Decision-making powers are passed down the organisation to empower subordinates and regional/product managers