Business Studies Review Flashcards

These flashcards cover key vocabulary and concepts from lectures on Business Studies, including Resource-Based Analysis, Types of Insurance, Marketing Mix, JSE SRI Index, Types of Goods, Product Life Cycle, The Basic Conditions of Employment Act (BCEA), Change Management, Acid Test Ratio, Buyer’s Response Stimulus, Unit Trusts, Equities, Debentures, Smoothing, Three Elements of Sustainable Reporting, Market Environment, Micro Environment, Corporate Social Responsibility (CSR), Internal Stakeholders, External Stakeholders, Ethical vs Unethical Business Practices, Code of Ethics, Management Styles, Entrepreneur Characteristics, Business Studies Techniques Used in the Macro Environment and others.

Resource-Based Analysis (RBA)

Looks inside the business to determine what resources the business has and how valuable they are.

Resources

The assets a business owns or controls.

Tangible resources

Physical things like equipment, buildings, and money.

Intangible resources

Non-physical things like brand reputation, patents, company culture, and skills.

Capabilities

How well the business uses its resources.

Competitive Advantage

A business uses its unique resources and capabilities to stand out and succeed in the market.

UIF (Unemployment Insurance Fund)

Provides temporary income to workers who are unemployed, on maternity leave, or on sick leave. Both the employer and employee contribute 1% of the worker’s salary.

COIDA (Compensation for Occupational Injuries and Diseases Act)

Covers employees who are injured or become ill while on duty. It ensures that medical bills, lost income, and rehabilitation costs are covered.

Fidelity insurance

Protects a business against financial loss due to theft or fraud by its employees.

Money-in-transit insurance

Covers money stolen while it is being transported from the business premises to the bank.

Vehicle insurance

Covers damage to or theft of company vehicles.

Fire insurance

Protects buildings and stock from damage caused by fire.

Theft insurance

Covers losses due to burglary or shoplifting.

Insurance for bad debts

Protects businesses from financial loss when customers fail to pay their accounts or instalments.

Life assurance

Provides a lump sum payout to a person’s beneficiaries upon their death.

Disability cover

Pays a benefit if the policyholder becomes permanently disabled and can no longer work.

Funeral cover

Pays for funeral-related expenses when a policyholder or their family member dies.

Insurable interest

Means the insured must stand to suffer a financial loss if the item or person being insured is lost, damaged, or dies.

Utmost good faith

Requires both the insurer and the insured to be completely honest and disclose all relevant facts when taking out the policy.

Indemnity

Means you cannot profit from insurance; it only compensates you for the actual loss suffered.

Subrogation

Means that once a claim is paid, the insurer has the right to recover the amount from a third party responsible for the loss.

Contribution/Excess

Applies when the same item is insured with more than one insurer; each insurer contributes proportionally to the claim.

Average clause

Comes into play if the item was under-insured; the payout will be proportional to the amount insured.

Product

The goods or services that a business offers to satisfy the needs and wants of customers, including design, features, quality, packaging, brand name, and product life cycle.

Price

The amount of money a customer pays for a product or service, influenced by strategies like penetration, skimming, competitive, psychological, cost-based, and value-based pricing.

Place

How the product gets from the business to the final consumer, involving distribution channels like direct, indirect, retail outlets, and online platforms.

Promotion

All activities used to inform, persuade, and remind customers about a product, including advertising, sales promotions, public relations, personal selling, and social media marketing.

JSE (Johannesburg Stock Exchange)

South Africa’s primary securities exchange, where shares of public companies are traded, enabling businesses to raise capital and investors to grow wealth.

JSE SRI Index

A pioneering initiative by the JSE in 2004 to highlight companies meeting standards for ethical, social, environmental, and economic responsibility, encouraging sustainable and responsible business practices.

Environmental Responsibility (SRI Index)

Reducing pollution, efficient energy use, waste management, and climate change awareness.

Social Responsibility (SRI Index)

Respecting human rights, fair labor practices, community development, and diversity and inclusion.

Corporate Governance (SRI Index)

Ethical leadership, transparency, accountability to shareholders and stakeholders, and anti-corruption measures.

Economic Sustainability (SRI Index)

Sound financial performance, risk management, and long-term strategic planning.

Consumer Goods

Goods bought by individuals for personal use, divided into durable, non-durable, and perishable categories.

Durable Goods

Goods with a long lifespan used repeatedly, like cars, furniture, and electronics.

Non-Durable Goods

Goods used up quickly with a short lifespan, like food, beverages, and toiletries.

Perishable Goods

Goods with a very short shelf life requiring quick consumption, like fresh fruits, vegetables, and dairy products.

Capital Goods

Goods used to produce other goods or services, like machinery, tools, buildings, and vehicles.

Intermediate Goods

Goods used in the production of other goods or services, not final goods but part of the supply chain, like steel, wood, and plastic.

Industrial Goods

Goods used by businesses for manufacturing, production, or operations, similar to capital goods but not directly in the production process, like office supplies and raw materials.

Convenience Goods

Goods purchased frequently with minimal effort, low-cost, easily accessible items like snacks, soft drinks, and newspapers.

Shopping Goods

Goods that consumers compare carefully before buying based on price, quality, and style, like clothing, electronics, and furniture.

Specialty Goods

High-end, unique goods purchased based on brand, reputation, or specific characteristics, like luxury cars and designer clothing.

Unsought Goods

Goods consumers do not think about or want until needed, like life insurance and emergency medical supplies.

Product Life Cycle (PLC)

The stages a product goes through from introduction to decline, helping businesses plan marketing strategies and manage costs.

Introduction Stage (PLC)

The launch phase where a product is first introduced, with low sales and high marketing costs focused on creating awareness.

Growth Stage (PLC)

The stage where a product gains acceptance and sales rise rapidly, shifting the marketing focus to differentiation from competitors.

Maturity Stage (PLC)

The stage where a product reaches peak market penetration and sales growth slows, with a focus on maintaining market share.

Decline Stage (PLC)

The stage where sales decline due to changes in consumer preferences or new products, focusing on minimizing costs and managing the product’s remaining life.

Extension Stage (PLC)

A strategy to prolong the maturity or slow the decline of a product by repositioning it, introducing new features, or entering new markets.

Basic Conditions of Employment Act (BCEA)

Sets the minimum standards for employment conditions, ensuring fair treatment of workers and providing guidelines for working hours, rest periods, overtime, and other essential aspects of the employment relationship.

Working Hours - BCEA

Focuses on setting the maximum number of working hours for employees, typically 45 hours a week, with guidelines for daily working hours, breaks, and overtime.

Rest Periods and Leave - BCEA

Stipulates minimum periods for rest between shifts, daily and weekly rest periods, and various types of leave (annual leave, sick leave, family responsibility leave, etc.).

Overtime and Pay - BCEA

Regulates overtime work and the additional pay that employees are entitled to when they work beyond the standard hours.

Termination and Severance Pay - BCEA

Outlines the procedures and rights regarding dismissal, severance pay, and retrenchments.

Employment Contracts and Job Security - BCEA

Emphasizes the need for written contracts that specify the terms and conditions of employment, including wages, duties, and responsibilities.

Change Management

Refers to the structured approach and processes used to manage the transition or transformation of an organization’s goals, processes, or technologies.

Preparation (Change Management)

Assess the need for change and prepare the organization by creating awareness and addressing potential resistance.

Planning (Change Management)

Develop a clear vision and strategic plan for the change, detailing objectives, timelines, and resources.

Implementation (Change Management)

Execute the plan by introducing new processes, systems, or structures, while providing necessary training and support.

Sustaining Change (Change Management)

Reinforce the change through continuous support, monitoring, and adjustments to ensure long-term adoption.

Evaluation (Change Management)

Assess the effectiveness of the change by measuring outcomes against objectives and gathering feedback for future improvements.

Resistance to Change

Employees may fear the unknown or feel threatened by changes, hindering the adoption process.

Poor Communication

Inadequate communication can lead to misunderstandings and lack of engagement.

Lack of Leadership Support

Without strong leadership commitment, change initiatives may lack direction and momentum.

Insufficient Training

Employees may struggle to adapt if they are not properly trained on new systems or processes.

Acid Test Ratio

A financial metric that measures a company's ability to cover its short-term liabilities using its most liquid assets.

Quick Ratio Formula

(Cash + Marketable Securities + Accounts Receivable) / Current Liabilities

Buyer’s Response Stimulus

Refers to the strategies businesses use to influence the decisions of potential buyers, focusing on what catches a buyer’s attention and prompts them to act.

Product Stimuli

Quality, design, and packaging of a product.

Price Stimuli

Discounts, bundles, or special offers.

Advertising & Promotion Stimuli

Advertisements, promotions, and marketing communications.

Personal Selling Stimuli

Direct interaction with salespeople influencing the buyer’s decision.

Place/Distribution Stimuli

Availability and location of the product, both in-store and online.

Social & Cultural Stimuli

Influences from friends, family, or broader cultural trends.

Problem Recognition

Identify a need or problem.

Information Search

Look for information to solve the problem.

Evaluation of Alternatives

Compare different options based on features, price, and benefits.

Purchase Decision

Make the final decision to buy.

Post-Purchase Behaviour

Reflect on the decision after the purchase is made.

Unit Trusts

An investment fund that pools money from multiple investors to collectively invest in a diversified portfolio of assets, managed by professional fund managers.

Equity Unit Trusts

Focused on investing in stocks (equities) of companies.

Income Unit Trusts

Invest in income-generating assets like bonds, property, or cash.

Balanced Unit Trusts

A mix of both equities and income-generating assets.

Specialist Unit Trusts

Focus on specific sectors, regions, or themes, such as technology or emerging markets.

Equities

Represent ownership in a company, giving investors the right to a share of the company’s profits, also known as stocks.

Ordinary Shares

Represents ownership and voting rights in a company with variable dividends depending on the company's profits.

Preference Shares

A hybrid of debt and equity giving shareholders priority over ordinary shareholders for dividends, with fixed dividends regardless of company profits.

Debentures

A type of debt instrument issued by companies or governments to raise capital, where investors lend money to the issuer in exchange for interest payments.

Convertible Debentures

Can be converted into company shares at a later date, typically with lower interest rates.

Non-Convertible Debentures

Cannot be converted into shares, providing investors with regular interest payments.

Smoothing

A technique used in data analysis and statistics to reduce fluctuations or noise in data, making trends and patterns easier to identify.

Moving Average

Averages data points over a specified period (window) to create a smoothed line.

Exponential Smoothing

A weighted version of the moving average, where more recent data points are given greater importance.

Polynomial Smoothing

Uses polynomial equations to smooth data, creating a curve that smooths out the fluctuations.

Sustainable Reporting

When a business discloses its impact not just in terms of profit, but also its effect on people and the planet.

Economic Sustainability (Reporting)

Refers to the business’s ability to remain profitable and financially stable over time, measuring how the company creates value, manages risks, and ensures long-term growth.

Social Responsibility (Reporting)

Focuses on the business's impact on employees, communities, and society, measuring how fairly and ethically the company treats people.

Environmental Sustainability (Reporting)

Assesses the business’s impact on the natural environment, measuring how the company reduces harm and promotes sustainability in its operations.

Market Environment

One of the external environments that directly influences a business, but over which the business has limited control.