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Input
factors of production
output
goods and services
consumer goods
The physical and tangible goods sold to the general public
Consumer Services
The non-tangible products sold to the general public
capital goods
The physical goods used by industry to aid in the production of other goods and services
factors of production
land, labor, capital, enterprise
Entrepreneur
Someone who takes the financial risk of starting and managing a new venture
Intrapreneur
someone within a large corporation who takes direct responsibility for turning an idea into a profitable finished product
private sector
Businesses owned and controlled by individuals or groups of individuals
public sector
organisations controlled by the government
mixed economy
Economic resources are owned and controlled by both private and public sectors
free market economy
Economic resources are owned largely by the private sector with very little state intervention
command economy
Economic resources are owned, planned and controlled by the state
Privatization
the sale of public sector organizations to the private sector
sole trader
A business in which one person provides the permanent finance and has full control of the business
Partnership
a business formed by two or more people
share holder
individuals that buy/own shares in a limited company
Private limited company
A small to medium sized business that is owned by shareholders. This company cannot sell shares to the general public.
public limited company
A large business with legal right to sell shares to public.
Social enterprise
A business with mainly social objectives that reinvests most of its profits into benefiting society
microfinance
very small loans by specialist finance businesses
public-private partnership
non-profit organization
any organization that has aims other than making profit
non-governmental organization
an organization with no representation of any government which has a specific aim or purpose
Mission Statement
A statement of the business's core aims used to motivate employees
vision statement
A statement of what the organisation would like to achieve or accomplish in the long term
Corporate Social Responsibility
business taking responsibility for the impact their decisions and activities
stakeholders
people or groups affected or have an interest in any action a business takes.
social audit
An independent report on the impact a business has on society.
Scale of Operation
maximum output that can be achieved using the available inputs
economies of scale
reduction in a firm's average costs of production that result from an increase in the scale of operations.
diseconomies of scale
factors that cause average costs of production to rise when the scale of operation is increased
join venture
two or more businesses agree to work together on a particular project and create a separate business division to do so.
strategic alliance
agreement between firms to cooperate in pursuit of a joint goal
Franchise
A business that uses the name, logo and trading systems of an existing successful business
globalisation
the growing integration of countries through increased freedom of global movement of goods, capital and people
free trade
the lack of trade restrictions among countries
Protectionism
using barriers to free trade to protect a country's own domestic industries
multinational business
business with headquarters in one country, but with operating branches and franchises around the world
start-up capital
Capital needed by an entrepreneur to set up a business
Working Capital
The finance needed by a business to pay its day-to-day costs.
Retained profit
profit left after all deductions and is given back to the company as a source of finance
Liquidity
ability of a firm to pay its short-term debts
overdraft
bank agrees to a business borrowing up to an agreed limit as and when required
Debt factoring
selling of claims over debtors in exchange for immediate liquidity
Leasing
obtaining the use of equipment and paying a rental charge over a fixed period
equity finance
permanent finance raised by the sale of shares
long-term loans
loans that don't have to be repaid for at least one year
fixed costs
costs that do not vary with output
variable costs
costs that vary with output
marginal costs
the extra cost of producing one more unit of output
revenue
income received from the sale of a product
total revenue
total income from the sales of all units of the product
break-even point
the level of output at which total costs equal total revenue
Dividends
share of profits paid to shareholders as a return for investing in the company
Marketing
responsible for identifying and meeting the needs
Marketing size
the total level of sales of all producers within a market
Market growth
The percentage change in the total size of a market over a period of time.
ease of entry
the lack of barriers for the establishment of new competitors in a market
homogeneous products
goods that are physically identical
Segmentation
dividing the market into distinct groups of consumers who share common tastes and requirements
Target Marketing
focusing marketing activity on particular segments of the market
Mass Marketing
selling to the whole market using a standardized product and the same marketing activity
Market Orientation
basing product decisions on consumer demand as established by market research
Product Orientation
making products that have been made for a long time and then trying to sell them
social marketing
considers the demands of consumers and the effect on all members of public society involved
market share
the percentage of sales in the total market sold by one business
Market leadership
when a business has the highest market share of all firms that operate in that market
marketing objectives
the goals set for the marketing departme nt to help the business achieve its overall objectives
consumer profile
a quantified picture of consumers of a firm's products
niche market
a small and specific part of a larger market
Niche Marketing
identifying and exploiting a small segment of a larger market by developing products to suit it
Unique selling point
differentiating factor that makes a company's product unique, designed to motivate customers to buy
branding
the name, symbol, or design used to identify firm's product
overheads
indirect expenses that are not chargeable to a particular part of work or production.
penetration pricing
Setting a low price when launching a new product in order to get established in the market
market skimming
setting a high price for a new product when a firm has a unique product
psychological pricing
setting prices that have special appeal to target customers
price discrimination
when a business sells the same product to different consumers at different prices
predatory pricing
selling a product below cost to drive competitors out of the market
promotion
any form of communication used to inform, persuade, or remind
above-the-line promotion
a form of promotion that is undertaken by a business by paying for communication with consumers
below-the-line promotion
Promotion that is not a directly paid-for means of communication but based on short-term incentives to purchase
Abraham Maslow
A theorist who classified the needs of employees of a firm into a series of levels - a hierarchy of needs.
Assets
resources owned by a business or person
Auditing
The process of checking the financial statements of a firm
autocratic leadership
A form of leadership where the leader makes decisions and sets objectives independently of the others in the firm without involving them in the decision making process.
Batch production
method of production where a limited number of identical goods are produced, often for a specific order.
Capital employed
The total amount of capital that the firm has and is using to produce their goods and services.
Cash Flow
The movement of cash in an out of the business.
Cash flow forecast
A projection of what a company expects its cash inflows and cash outflows to be over a period of time.
chain of command
The way in which orders are passed down through the business
channels of communication
The methods or routes used to convey information from one person or area of the firm to others.
competitive based pricing
A pricing method where the price charged by competitors is the main determinant of an individual firm's own decision on price.
capital expenditures
purchase of assets that are expected to last for more than one year
Contract of employment
A written legal document setting out the terms and conditions of employment.
Contribution pricing
A method of pricing where the price charged is based on the variable costs of production.
cost-based pricing
A method of pricing where the firm adds a percentage mark-up to its costs to determine the price they are going to charge for their products.
De-layering
reducing the number of layers of management.
demand-based pricing
A method of pricing where an organisation decides the price to charge based as far as possible on what consumers are prepared to pay.
Note 
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