Cambridge IGCSE and O Level Business Studies: Business Activity, Enterprise, and Growth

Comprehensive vocabulary flashcards defining foundational business concepts, economic sectors, entrepreneurship, and methods of business growth based on the Cambridge IGCSE and O Level Business Coursebook.

Business

An organisation set up by a person or people to satisfy the needs and wants of consumers or customers.

Business Activity

The process of providing products (goods and services) that meet the needs and wants of consumers.

Need

Any good or service that people must have to be able to live.

Want

Any good or service that people would like to have to make their lives more enjoyable, but which is not essential for living.

Customer

A person or entity that buys goods or services from a business.

Consumer

A person who uses or consumes goods and services.

Factors of Production

The resources needed by a business to produce goods and services, consisting of land, labour, capital, and enterprise.

Land

All the natural resources, including renewable and non-renewable resources, that can be obtained from the land or sea.

Labour

The skills and number of people who help provide and make goods and services.

Capital

The human-made resources and finance that are used to produce goods and services.

Enterprise

The ability and willingness to take risks to bring together and organise the other three factors of production to produce goods and services.

Entrepreneur

A person who takes the risk of bringing together resources and setting up a new business.

Added Value

The difference between the selling price of a product and the cost of the bought-in materials used to make it.

Opportunity Cost

The next best alternative given up by choosing a different option.

Scarcity

The basic economic problem arising because there are not enough resources to make all the goods and services necessary to satisfy everyone's needs and unlimited wants.

Economy

A measure of all the activities taking place within a country that involve the production, buying, and selling of goods and services.

Economic Sectors

Groups that classify different types of businesses in an economy together based on their common features and activities.

Primary Sector

Business activity that involves the extraction or harvesting of natural resources directly from the land or sea.

Secondary Sector

Businesses that take raw materials provided by the primary sector and turn them into manufactured goods or construction projects.

Tertiary Sector

Business activity that involves providing services to consumers or to other businesses.

Mixed Economy

An economy comprising both a private sector and a public sector.

Private Sector

The part of the economy that is owned and controlled by individuals or groups of individuals for profit.

Public Sector

The part of the economy owned by the country as a whole and controlled by the state or central government on behalf of the people.

Business Plan

A detailed written document outlining the aims and objectives of a business and what it intends to do to achieve them.

Grant

A financial sum provided to a business (often by a government) that may not need to be repaid.

Capital Employed

The total value of all long-term finance invested in a business to purchase assets such as factory/office buildings, machinery, and inventory.

Internal Growth

Business expansion that occurs from within, such as by purchasing more machinery, developing new products, or entering new markets.

External Growth

Business expansion that takes place when a business merges with or takes over another business; also known as integration.

Merger

An agreement between two businesses to join together to become a single, larger business.

Takeover

When one business buys a controlling interest in another business.

Horizontal Integration

When two businesses at the same stage of production within the same industry join to become a single, larger business.

Vertical Integration

When two businesses at different stages of production within the same industry join to become a single, larger business.

Forward Vertical Integration

A form of vertical integration where a business merges with or takes over another business that is closer to the final consumer (a customer business).

Backward Vertical Integration

A form of vertical integration where a business merges with or takes over another business that is closer to the source of raw materials (a supplier business).