Business - Paper 2

Flashcards covering key business studies concepts.

Organic Growth

Growth from within, through new products or shops.

Inorganic Growth

Growth from outside, such as joining with another business through merger or acquisition.

Merger

When similar size businesses join together.

Takeover

When a larger business acquires a smaller one.

Retained Profit

Profit from the previous year kept for investment instead of being distributed to shareholders as a dividend.

Private Limited Company (Ltd)

Smaller company owned by family or friends; shares cannot be bought or sold without permission from other shareholders.

Public Limited Company (PLC)

Large company with thousands of shareholders; anyone can buy and sell shares.

Globalisation

Countries trading more closely with each other.

Trade Bloc

A free trade area such as the EU.

Free Trade

Trade without tariffs or other restrictions.

Ethics

Morally right principles.

Pressure Group

A group that seeks to change opinions of governments or consumers.

Trade-off

Less of one thing for more of something else, such as profits versus ethics.

Sustainability

Not using up resources completely.

Design Mix

Aesthetics, cost, and function.

Product Life Cycle Stages

Introduction, growth, maturity, decline.

Pricing Strategies

Penetration, psychological, cost-based, competitive, loss leader, skimming.

Mass Market

A market that is not seasonal or regional, and products are bought regularly.

Differentiation

Features or benefits that make a product stand out as unique.

Niche Market

Opposite of a mass market; caters to a specific segment.

Sponsorship

When a company gives a sports club money to display its logo.

Endorsement

When someone famous uses and advertises a company’s product.

Brand

Personality to gain an emotional response.

Viral Advertising

When people spread a promotional message via social media.

Distribution

The process of getting the product from the manufacturer to the consumer.

Budget

Planned spending limit.

Productivity

Output per employee.

Job Production

Producing 'one-offs'.

Flow Production

A production line where everything is the same.

Buffer Stock

The minimum stock holding.

Operations

The core business activity.

Just in Time

When orders from suppliers arrive right when you need them.

Procurement

The buying of equipment and materials.

Quality Control

Preventing products of a poor standard from leaving the production process.

Logistics

Organisation of transporting goods through the supply chain.

Quality Assurance

When all parts of a business take responsibility for the standards of the goods produced.

Gross Profit

Revenue - variable costs

Net Profit

Gross profit - expenses (fixed costs)

Gross Profit Margin

Gross profit / revenue x 100

Net Profit Margin

Net profit / revenue x 100

Average Rate of Return

Average yearly profit / initial investment

Organisation Chart

To show the structure and reporting relationships in a business

Hierarchical Structure

Tall, more than three levels

Flat Structure

three levels or less, smaller

Centralised Structure

Head office v branch decision making

Decentralised structure

More delegation, higher job satisfaction, more dynamic

Flexible Working Hours

Not 9 to 5, allows employee to choose

Permanent Contract

No end date, job for life

Temporary Contract

Fixed term job

Remote Working

Working from home

Job Description

Describes the duties of the job, the pay and location

Personal Specification

Describes the qualities, skills and qualifications of the ideal candidate

References

People who will recommend a person for a job (not related)

On the job training

At the workplace

Off the job training

At college

Remuneration

Financial reward

Motivation

Wanting to work

Incentive

Persuasion to work

Fringe Benefit

Car, computer, phone, health insurance

Bonus

Fixed payment

Commission

% of a sale

Job Rotation

Swapping roles whilst at work

Job Enrichment

More responsibility, decision making

Autonomy

More independence, less supervision