AICE Business Chapter 3 Vocab

Revenue

The total value of sales made during the trading period

Capital Employed

The total value of all long-term finance invested in the business

Market Capitalisation

The total value of a company’s issued shares

Market Share

Sales of the business as a proportion of total market share

Internal (Organic) Growth

Expansion of a business by means of opening new branches, shops, or factories

External Growth

Business expansion achieved by integrating with another business by either merger or takeover

Merger

An agreement by owners and managers of two businesses to bring them together in a combined business

Takeover

When a company buys more than 50% of the shares of another company and becomes its controlling owner

Horizontal Integration

Integration with a business in the same industry and same stage of production

Vertical Integration

Integration with a business in the same industry

Forward Vertical Integration

Vertical integration with a customer business

Backward Vertical Integration

Vertical integration with a supplier business

Conglomerate Integration

Integration with a business in a different industry

Synergy

The new business will be more successful than the original separated ones

Strategic Alliance

Agreement between two organisations to commit resources to achieving a specific objective while remaining independent.