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