Paper 1 Terms

Multinational company (MNC)

A business that operates in multiple countries, with a headquarters in one country and branches in others.

Internal growth

Expansion through a company's own operations, including increasing sales or opening new branches.

External growth

Expansion by merging with or acquiring other companies for faster market access.

Merger and acquisition

A merger is two companies joining to form a new entity, while an acquisition is one company buying another.

Public limited company (PLC)

A business owned by shareholders with shares traded on a stock exchange, accountable to the public.

Mission statement

Defines the core purpose and values of a business, guiding decision-making.

Vision statement

Outlines what the company aspires to achieve in the long term, providing direction.

Objectives

Specific, measurable goals that help a business achieve its mission and vision.

Stakeholders

Individuals or groups affected by or influencing a business's activities.

Corporate Social Responsibility (CSR)

A voluntary commitment by a company to ethical behavior and sustainable development.

Ethics

Moral principles guiding corporate behavior and decision-making.

Pressure group

An organized collective seeking to influence business or government actions.

Change

Adaptation of businesses to evolving internal and external conditions.

Marketing mix (4Ps)

The combination of strategies including Product, Price, Place, and Promotion to bring a product to market.

Promotion

Activities to inform and persuade consumers to purchase a product.

Product

A good or service that meets the needs and wants of consumers.

Place

Methods of distribution used to deliver a product to customers.

Price

The amount charged to customers for a product.

Target market

A defined group of consumers a business aims to reach.

Market segmentation

Dividing a market into distinct groups of buyers with similar characteristics.

Branding

Creating a unique image or symbol that differentiates a product.

Product life cycle

Stages a product goes through: introduction, growth, maturity, and decline.

Social media marketing

Promoting products through platforms like Instagram and TikTok.

Social media influencer

A person with significant online following who influences purchasing decisions.

Unique selling point (USP)

A feature that sets a product apart from competitors.

Customer profile

A description of a typical customer based on demographic and psychographic data.

Consumer trends

Shifts in buyer preferences and behaviors over time.

Digital marketing

Promoting products through digital channels like websites and social media.

Avatar (in marketing)

A digital persona used to engage consumers in marketing campaigns.

Recruitment

The process of attracting and hiring qualified candidates for jobs.

Training

Developing employees’ skills and knowledge for improved performance.

Organizational structure

Defines how tasks, responsibilities, and communication flow within a business.

Motivation (Maslow, Herzberg, Taylor)

Theories explaining what drives employee performance.

Communication

Exchange of information to ensure coordination and effective decision-making.

Workforce planning

Ensuring a business has the right number of people with the right skills at the right time.

Costs (fixed and variable)

Fixed costs remain constant, while variable costs fluctuate with production levels.

Revenue

Total amount earned from sales before expenses are deducted.

Profit

Financial gain made after subtracting costs from revenue.

Sources of finance

Ways businesses can fund operations, through internal or external sources.

Investment

Allocating resources into projects expected to generate future returns.

Profit and loss account

Financial statement summarizing income, expenses, and profit or loss.

Cash flow forecast

Predicting the timing and amount of cash inflows and outflows.

Budgeting

Setting financial targets for income and expenditure over a specific period.

Production methods (job, batch, flow)

Job production is for customized items; batch handles groups; flow is continuous for large-scale output.

Quality management

Proactive approach to maintaining standards and ensuring consistent quality.

Sustainability

Meeting current production needs without compromising future resources.

Green production

Environmentally responsible manufacturing minimizing waste and pollution.

Supply chain

All steps from sourcing raw materials to delivering finished products.

Recycling

Converting used materials into new products to reduce waste.

Biodegradable

Materials that break down naturally without harming the environment.

Innovation

Creating new or improved products, processes, or business models.

Economies of scale

Lower average costs per unit from increased production.