theme 2 key words

organic growth

internal growth coming from opening stores or making new products

inorganic growth

external growth coming from takeovers or mergers

merger

when 2 business of similar sizes join to become one big one

takeover

obtaining control of a business by gaining over 50% share capital

aims and objectives change due to

new legislations, new technology, change in performance or to enter new markets

globalisation

process by which business trade around the world making it more interconnected

trade bloc

a group of countries who agree not to place tariffs on imports

tariff

a tax paid on an import to persuade customers to by uk goods

ethics

the understanding of what is morally right and wrong

trade off

a compromise between ethics and profit

sustainability

avoiding the depletion if natural resources to maintain an ecological balance

pressure group

organisation set up to influence customers to think about a business’ ethical decisions

design mix

function, aesthetics, cost

product life cycle

research and development- introduction- growth- maturity- decline- (extension)

differentiation

making their product different from competition

price skimming

start high and reduced later on

price penetration

start low then increased later on

competition pricing

pricing similar products at similar prices

cost- plus pricing

priced by calculating total cost to produce and adding a profit

percentage decrease=

change / original x 100

advertising

a form of promotion, it aims to inform and raise awareness about their product

print media

national and local newspapers, magazines

promotion

methods used to create interest

viral marketing disadvantage

it is in the hands of the public so things can go wrong

retailer

a business that sells goods directly to the customer through a bricks and mortar shop

e-tailer

a business that sells to the customer via the internet

distribution stages

producer- wholesaler- retailer

disadvantage of direct distrubution

large costs of warehousing and transportation

job production

a single product made on a one- off

batch production

1 set all the same and then the next is slightly different

flow production

continuous, on mass like a typical factory

lead time

delivery time

buffer stock

minimum stock kept in case of emergency

just- in- time

supplies arrive for when they are needed

just- in- case

warehouse full of parts and products

quality control

inspecting and checking products **at the end** of production to find faults, **no prevention**

quality assurance

measures taken during the design and production where faults are detected and **avoided**

sales process

product knowledge- speed- engagement with customers- response to feedback - post-sales service- customer loyalty

gross profit=

sales revenue- cost of sales

cost of sales

variable costs

gross profit margin=

gross profit/ sales revenue x 100

net profit=

sales revenue- total costs OR gross profit- other costs

net profit margin=

net profit/ sales revenue x100

average rate of return=

average annual profit/ cost of investment x100

span of control

number of people you are managing

delegation

giving someone below you a task

subordinates

the people the level below you, who you manage

hierarchical structure

lots of opportunity for promotion however they are inflexible and have slow communication

flat structure

wide span of control so fast communication however staff are less motivated as overstretched

centralised structure

head office makes all decisions about stock, finances and marketing employees

decentralised structure

decisions made at branch level

stages of recruitment

identify vacancies- job description- person specification- write advert- accept applications- interviews- make offers

formal training

done by outside experts

informal training

on- the- job training, cheap

self- learning

studying in an informal setting with guidance

ongoing training

to keep up with trends and new technology

smaRtER targets

R- relevant E- extending capabilities R-rewarding

fringe benefits

perks such as free meals

commission

employee receives a % or each sale they make

remuneration

money given to employees for work as salary or wage

job rotation

rotating employees between jobs to avoid boredom but there is high training costs

job enrichment

redesigned jobs with challenge to reduce repetitiveness but there is high training costs

autonomy

allowing employees to make their own decisions, meaning they can control the speed that they work at but some people need the control