Business A-Level Definitions

Product

Good or service that a business sells

Market

Any place that buyers and sellers exchange products

Mass Market

Market targeted at a wide range of people

Niche Market

Smaller segment of a larger market

Market Size

Volume of sales in the market

Market Share

Proportion of total market sales a firm has

Brand

Feature that distinguishes one seller’s product from others

Dynamic

Constantly moving

E-commerce

Process of buying and selling products over the internet

Competition

Rivalry between 2 or more businesses striving for the same market

Monopoly

When a business dominates a market

Duopoly

When 2 companies dominate a market

Oligopoly

When a few companies dominate a market

Monopolistic Competition

When many producers sell the same product and differentiate using things like branding and quality

Market Research

Collection and analysis of information to inform the business about its market

Primary Market Research

Collection of first-hand data

Secondary Market Research

Market research which has already been undertaken by another business

Qualitative Data

Gathering of non-numerical information

Quantitative Data

Gathering of numerical data

Open Question

Question asking for a detailed opinion

Closed Question

Question asking you to choose between a limited amount of options

Sample

Group of respondents that have been chosen from a larger group for an investigation

Product Orientation

Product is made the focus of a business

Market Orientation

Consumer is made the focus of the business

Market Segmentation

When the market is split into groups that have similar buying characteristics

Demographic

Breakdown of population

Geographic

Segmented by location

Market Positioning

How the product is viewed by the market

Market Mapping

Diagram showing the position of the product in the market relative to its competitors

Product Differentiation

USP that makes a product stand out

Demand

Relationship between price and quantity

Advertising

Communicating with customers to generate awareness and desire

External Shocks

Unexpected events outside business control that have a direct impact on demand

Seasonality

Fluctuations in demand depending on the time of year

Supply

Amount of a product that producers are willing to sell

Subsides

Encouraging/discouraging suppliers to produce products

Equillibrium

Where demand and supply meet

Price Elasticity of Demand (PED)

How responsive demand is to a change in price

Income Elasticity of Demand (YED)

How responsive demand is to a change in income

Bespoke Product

Made specifically for you

Ethical Sourcing

Buying materials from suppliers that are behaving in a morally correct manner

Promotion

Activities designed to communicate with the customer to increase awareness of a product

Cost-plus Pricing

Where a mark-up is added to the cost of a product to give you the selling price

Price Skimming

Setting a high initial price for a new product

Price Penetration

Setting a low initial price to gain a foothold in the market

Predatory Pricing

When the prices are set low for a short period to force out competitors

Competitive Pricing

Charging a similar price to competitors

Price Leader

A firms market share is so strong that when they change the price and others are forced to follow

Price Taker

Following the price strategy of the price leader

Place

Getting the product from the manufacturer to the consumer

Product Mix

Different products that a company provides

Product Range

Different types of a similar product

Hard HR

Staff are treated as a resource

Soft HR

Staff are treated as a valuable asset

Flexible Workforce

Workers being able to take on as many jobs as possible to meet the business needs

Multiskilling

Training an employee in multiple skill sets

Job Sharing

2 part time worker sharing 1 full time job

Complementary Goods

Good whose appeal increases with the popularity of its complement

Inferior Good

Goods whose demand decreases when consumer income rises

Luxury Good

Good whose demand increases when consumer income rises higher than usual

Normal Good

Good which experiences a rise in demand due to an increase in income

Substitutes

Thing that can serve in the place of another

Outsourcing

Tasks are completed by a 3rd party organisation

Homeworking

Staff can work remotely from home

Redundant

The job no longer exists

Dismissal

When an employee’s contract is terminated due to a breach of terms

Internal Recruitment

Recruiting someone within the organisation

External Recruitment

Candidates are recruited from outside of the organisation

Levels of Hierarchy

Number of levels of management within the business

Span of control

Number of subordinates that someone has to directly manage

Chain of command

Lines of authority within a business

Centralised structure

One or a few people make decisions in the business

Decentralised structure

Decision making is spread across the whole business

Motivation

Factors that influence the way someone behaves

Piece rate

You are paid for every thing you make

Job enrichment

An increase in the level of responsibility an employee has

Job enlargement

An increase in the number of responsibilities an employee has

Job rotation

Varying the tasks that an employee does to reduce boredom and increase skillsets

Intrapreneur

An employee with the characteristic of an entrepreneur

Objective

A quantifiable target

Cost efficiency

Achieving maximum output from minimum input

Unincorporated

Entrepreneur and business are the same legal entity

Incorporated

Entrepreneur and business are a separate legal entity

Franchise

Granting a business to use an established business’ branding in return for a fee

Franchisee

Person or business that buys the franchise

Franchisor

Person or business that sells the franchise

Social enterprise

Business where society benefits

Opportunity cost

Next best alternative that is lost from making a decision

Trade off

Alternatives sacrificed to chose the best opportunity

Crowd funding

Large number of people giving a small amount of money

Business angels

Wealthy people make personal investments into start up businesses in return for a share of the business

Overdraft

Short term facility to overspend on a current account up to an agreed sum

Trade credit

Paying suppliers a period of time after the goods or services have been recieved

Leasing

Allows a business to use an asset without buying or owning it

Venture capital

Investment from an established business in return for a percentage of the business

Share capital

Finance raise from the sale of shares

Grant

Fixed amount given by the government for a specific project

Cash flow

The money that flows in and out of the business

Sales forecasting

Identifying potential future sales volume and trends

Break even

When total revenue is equal to total costs