Studied by 14 people
competitive market
where there are many rivals selling similar products
direct competition
Businesses produce similar products that appeal the same group of customers
indirect competition
Different businesses make or sell products that are not in direct competition but compete for the same customer experience e.g. Netflix and the local cinema
Market growth
An increase in demand/sales for a particular product/service
Market share
The % of the total market a business has in terms of volume or value
Market Orientation
when a business products/ services are based around the needs and wants of the customer.
Market Segmentation
dividing a whole market into particular customer groups that have similar characteristics.
ie - demographic, behavioral, psychological
Primary market research
obtaining data first hand by the business to match the specific needs of the business. AKA - Field Research
Product Orientation
When a business prioritises a products design quality or performance rather than meeting customer preferences to guide production and marketing decisions
Qualitative Research
Market research collected relating to the opinions and beliefs of consumers . Data not presented numerically.
Quantitative research
Numerical information gathered and can be presented and analysed using graphs, charts, table.
secondary market research
Data collected by another business or organisation but used by the business in question. Also known as desk research
Trade publications
Specialist magazines that look at current trends in the business world
Added Value
The increase in value that a business creates when producing a product/service. The difference between the price the customer pays and the total cost of inputs needed to create a product
Competitive advantage
A feature of a business and/or its products that enable it to compete effectively with rival producers/products.
Demand
The quantity of goods/services that a consumer is willing to buy at a given price and at a given time
External shocks
Factors beyond the control of a business
Government subsidies
A payment given to producers, usually to encourage production of a certain good
Indirect Taxes
Taxes imposed by the government on spending e.g. VAT and Excise duties. Responsibility for payment lies with the business
Supply
The amount that producers are willing/able to produce at a given price/over a given period of time
Equilibrium price
The price where supply and demand are equal. Also known as market clearing price
Non price factors
Factors other than price e.g. Change in consumer incomes, advertising and seasonality
Shortage in markets
Where demand exceeds supply
Surplus in markets
Where supply exceeds demand
price elastic
demand is responsive to change in price
PED - Price Elasticity of Demand
% change in quantity demanded / % change in price x 100
Measures the responsiveness of demand to a change in price.
YED - Income elasticity of demand
% change in quantity demanded / % change in income x 100
measures the responsiveness of changes in demand to changes in consumer income
Cost (design mix)
when the business focusses on being economically viable therefore they aim to minimise costs.
design for recycling
Producing products using materials that have been discarded as waste and recycled
Design for reuse
When materials used in the initial product are utilised again in the future beyond their initial intended use.
design for waste minimsation
Reducing the quantity of resources that are discarded in the production process
design mix
The combination of factors needed in designing a product and include Aesthetics, Function, Economic Manufacture
emotional branding
The creation of brands that perhaps appeal to customers' emotional nature, rather than their logical side.
Manufacture/ corporate branding
Brands created by the producers of goods and services eg Kellogg's cornflakes (bear the producers name)
product branding / generic branding
Products that only contain the name of the product category rather than the company or product name e.g. Carrots
public relations
An organisations attempt to communicate with interested parties, usually through unpaid media such as press conferences
collective bargaining
Negotiation of wages/conditions of employment between employee representatives / trade unions and the employer
dismissal
Referred to informally as firing or sacking. It is the termination of employment by an employer against the will of the employee.
multiskilling
The process of increasing the skills of employees
staff as a cost
A cost to businesses in terms of recruitment, training, remuneration, welfare and even severance
staff as an asset
Employers recognise the input of employees as an important business resource. They contribute to the value of output, whether this is through providing added value to a product by supporting the manufacturing process or through effective customer service
trade unions
A workforce representative that act to protect and improve the economic and working conditions for their members.
External recruitment
When the business looks to fill the vacancy from outside of the business.
internal recruitment
Selecting employees who already work within the business to fill job vacancies
Off-the Job Training
When employees are given training away from their normal job environment, often in a classroom
On-the Job Training
Learning/gaining/developing skills whilst at work doing the job
Centralised structure
An organisational structure where business decisions are made at the top of the hierarchy by senior management/or at the headquarters of a business
Decentralised structure
When a business allows branches to take more control/make their own decisions
Matrix Organisational structure
Organises employees from different disciplines or divisions into projects/teams
Commission
A payment to a worker based on a percentage of the value of sales.
Delegation
Authority to pass down from superior to subordinate
Empowerment
Giving official authority to employees to make decisions and to control their own work activities
Hertzberg's Two-Factor Theory
theory of motivation that is split into two categories: Motivators and Hygiene factors
Job Enlargement
Giving an employee more work to do of a similar nature, horizontally extending their work role
Job Enrichment
Giving employees greater responsibility and recognition by vertically extending their work role
Job Rotation
The changing of jobs or tasks
Maslow's Hierarchy of needs
The order of people's needs, starting with basic human needs
Mayo's Human Relations Theory
Emphasises the importance of the ways in which people interact and how they are treated. Motivation can improve when employees feel more involved
Taylor's Scientific Management
Suggested a job could be broken down into constituent parts, so that the most efficient way of working could be calculated. He believes workers are motivated by money
Non-financial techniques
Ways of encouraging employees without the use of monetary rewards e.g Delegation, consultation, empowerment, team working, flexible working, job enrichment, job rotation and job enlargement
Autocratic leadership
A leadership style where the decision-making is best kept with managers, who will direct subordinates with little consultation
democratic leadership
A type of leadership style in which members of the group take a participative role in the decision-making process. Group members are encouraged to share ideas and communication is two ways
Laissez-faire
A leadership style where employees are encouraged to make their own decisions within certain limits
Paternalistic leaders
Leaders that are in control, but take the welfare of employees into account when making decisions
Entrepreneur
Someone who organises a business venture by combining the other factors of production, namely land, labour and capital. They task risks to set up a business in hope of profit/reward
Profit satisficing
Making enough profit to satisfy the needs of the business owner
Social Entrepreneurship
Setting up a business and showing concern for the local area
Social enterprise
A business created to advocate for a social change ie - a business who sells sustainable clothes for those in protest for sustainability
Cost efficiency
Minimising costs/expenses/waste when producing a product or service
Profit Maximisation
When the difference between sales revenue and cost is at its greatest
Sales Maximisation
An attempt to sell as much as possible in a given time period (or to generate as much sales revenue as possible)
Lifestyle business
A business set up with the aim of making no more than a set level of income from which to enjoy a particular lifestyle
stock market floatation
When a business sell shares publicly on the stock exchange for the first time
Globalisation
A process by which economies and cultures have been drawn deeper together and have become more interconnected through networks of trade and the rapid spread of technology
Trade Barriers
Measures designed to restrict trade
Trading Bloc
A group of countries that trade freely with reduced or no tariffs and quotas on trade between businesses in these countries
International Trade Barriers
A regulation or policy that restricts international trade, for example: tariffs, quotas, customs duties, rules and regulations
BRICS
economies are considered to be: Brail, Russia, India, China and South Africa
ASEAN
The Association of Southeast Asian Nations
NAFTA
The North American Free Trade Area. Replaced by the USMCA.
EU
The European Union, the most powerful trading bloc in the world. A single market that guarantees the free movement of people, goods, services and capital through member states
MINTS
Economies are considered to be Mexico, Indonesia, Nigeria and Turkey
Economic growth
An increase in the GDP - value of output of goods and services produced in an economy over time
Economy
An area/country where goods and services are produced, sold and bought
Emerging economy
The economies of developing countries where there is rapid growth, but also significant risk
Employment patterns
A key indicator of growth looking at unemployment rates, trends, labour costs and productivity as well as education qualifications and potential employees
GDP
Gross Domestic Product. Measures the output of goods and services in an economy over a period of time
HDI
Is a composite index focusing on three basic measures of human development: Life expectancy at birth, mean years of schooling and expected years of schooling and standard of living, measured by gross national income per capita
Exports
Goods or services that a firm produces in its home market, but sells in a foreign market
FDI
Foreign Direct Investment, when a business invests by setting up operations or buying assets in businesses in another country
FDI flows
The transfer of funds by an MNC to purchase and acquire physical assets such as factories or machines
Mitigation
The movement of people from one country to another to seek employment or a better life
Imports
Goods and service that are bought into one country from another
Structural change
Where some businesses grow while others will shrink or close down e.g. those in primary, secondary and tertiary sectors
Trade Liberalisation
The reduction, and sometimes removal, of trade barriers between countries
Transnational companies
Companies that own or control production or service facilities outside the country in which they are based
Domestic subsidies
Financial support given to a domestic producer to help compete with overseas firms
Protectionism
Policies used by a government to protect domestic businesses by making foreign owned products less attractive. Examples include tariffs, quotas, subsidies and regulation
Tariffs
A tax on imports to make them more expensive
Import Quotas
physical limit on the quantity of imports allowed into a country
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Flashcard (54)