y5 BM: definitions

Public Limited Company (PLC)

An incorporated business owned by shareholders that offers its shares to the general public on a stock exchange, featuring limited liability for its owners.

Social Enterprise

A revenue-generating business operated with primary social or environmental objectives, reinvesting its surpluses back into the business or community rather than maximizing profit for shareholders.

Internal Growth (Organic Growth)

The expansion of a business achieved through its own operations and resources, such as developing new products or opening new locations, without merging with or acquiring other firms.

Joint Venture

A strategic growth arrangement where two or more independent businesses form a separate corporate entity, sharing capital, risks, responsibilities, and profits for a specific project or objective.

STEEPLE Analysis

A analytical framework used to evaluate the external macro-environment affecting a business by assessing Social, Technological, Economic, Environmental, Political, Legal, and Ethical factors.

Capital Expenditure

Funds spent by a business to purchase, upgrade, or maintain long-term physical assets (such as machinery, buildings, or equipment) expected to generate revenue over multiple years.

Debt Factoring

A financial service where a business sells its trade receivables (unpaid customer invoices) to a third party at a discount to obtain immediate cash liquidity.

ROCE (Return on Capital Employed)

A profitability ratio measuring how efficiently a firm uses its total capital investment to generate net operating profit

ROCE=(Capital EmployedNet Profit Before Interest & Tax​)×100

Gearing Ratio

A solvency ratio measuring the proportion of a business's capital structure financed through long-term debt relative to total capital employed

Gearing Ratio=(Capital EmployedNon-Current Liabilities​)×100

Contribution per Unit

The portion of sales revenue from each individual unit sold that remains after covering variable costs, contributing directly toward paying fixed costs and generating profit (Contribution per Unit=P−VC).

Market Orientation

An outward-looking approach to business strategy that focuses on researching and identifying customer needs and market demand before developing and selling products.

Stratified Sampling

A probability sampling method where a target population is segmented into distinct sub-groups (strata) sharing common characteristics, and random samples are drawn proportionally from each stratum.

Price Skimming

A pricing strategy where a business sets a high initial price for a new, innovative, or highly differentiated product to maximize short-term revenue from early adopters before competitors enter the market.

Above-the-Line (ATL) Promotion

Mass-market promotional activities directed at a broad audience using independent media channels such as television, radio, print newspapers, and broad digital advertising.

Boston Consulting Group (BCG) Matrix

A 2×2 strategic planning tool that categorizes a firm's product portfolio based on its relative market share and market growth rate into Stars, Cash Cows, Problem Children, and Dogs.

Just-in-Time (JIT)

An inventory management strategy where raw materials and components are received from suppliers only as they are needed in the production process, minimizing holding costs and waste.

Just-in-Case (JIC)

A traditional inventory management strategy where reserve (buffer) stock is maintained at every stage of production to protect against sudden demand surges or supply chain disruptions.

Lead Time

The total time elapsed between placing an order for supplies or inventory with a supplier and receiving the delivery.

Buffer Stock (Safety Stock)

The minimum level of extra inventory held by an organization as a contingency against delayed deliveries or unexpected spikes in customer demand.

Capacity Utilization Rate

An efficiency metric measuring the proportion of maximum potential output that a business actually produces over a given period