Business chapter 1 terms

Primary Sector

The part of the economy engaged in extraction or production of raw materials.

Secondary Sector

The part of the economy engaged in the production of finished goods.

Tertiary Sector

The part of the economy engaged in the delivery of services.

Quaternary Sector

The part of the economy engaged in the production, processing, and transmission of information.

Business Plan

A roadmap providing a detailed account of a business’s goals and how it plans to achieve them.

Private Sector

The portion of an economy not controlled or owned by the government.

Public Sector

Portions of the economy owned or controlled by the government.

Sole Trader

A business owned and operated by one person, with no legal distinction between the owner and the business.

Partnership

A business owned and operated by two or more people, with no legal distinction between the partners and the business.

For-Profit Social Enterprise

An organization similar to a social enterprise that often earns a profit to fund social services.

Cooperative

Business organization owned and operated by its members, who share any profits.

Non-Profit Social Enterprise

An organization focused on providing social services rather than earning profit.

Vision Statement

An inspirational statement encapsulating the philosophy or principles steering an organization.

Mission Statement

States a company’s purpose and explains why the business exists.

Business Objectives

Articulated, measurable targets that must be met to achieve a business’s aims.

Strategic Objectives

Long-term goals indicating how a business intends to fulfill its mission.

Tactical Objectives

Short- to medium-term targets that help a business achieve its strategic objectives.

Corporate Social Responsibility (CSR)

The view that businesses should contribute to societal well-being beyond just shareholder value.

SWOT Analysis

A tool that identifies Strengths, Weaknesses, Opportunities, and Threats facing an organization.

Ansoff Matrix

A tool for analyzing and planning business growth strategies.

Circular Business Models

Models exploring how organizations create and deliver value while reducing environmental impact.

Stakeholder

A person or organization that affects or is affected by a business.

Internal Stakeholder

A stakeholder who is internal to the business, such as an employee or shareholder.

External Stakeholder

A stakeholder who is external to the business, such as suppliers or customers.

STEEPLE Analysis

A tool for studying the external environment, focusing on Social, Technological, Economic, Environmental, Political, Legal, and Ethical factors.

Economy of Scale

The decrease in per unit production cost as output increases.

Diseconomy of Scale

The increase in per unit production cost as output increases.

Fixed Costs

Costs that do not change according to the amount of goods or services produced.

Variable Costs

Costs that increase or decrease according to the amount of goods or services produced.

Internal Growth

Growth that relies on a business's own resources and capabilities.

External Growth

Growth that occurs through resources and capabilities obtained from outside the company.

Merger

The legal combination of two companies that are theoretically equal.

Acquisition

When one company purchases a majority or all of another company's shares.

Takeover

When one company acquires a majority or all shares in another company, typically against the will of the acquired company.

Globalization

The process by which the world's regional economies become one integrated global unit.