Paper 1 - SVT

Above-the-line promotion (television, newspapers, magazines)

Above-the-line promotion (television, newspapers, magazines)

a paid form of promotion that is undertaken by a business by paying for communication with consumers, e.g. advertising

Acquisition

A takeover (or acquisition) occurs when a company buys a controlling interest in another firm, i.e.. it buys enough shares in the target business to hold a majority stake. (usually more than 50%) Acquisitions are hostile.

Below-the-line promotion (social media, sales promotions)

promotion that is not a directly paid-for means of communication but based on short-term incentives to purchase, e.g. sales promotion techniques

Brand Leader

To become the brand with the highest recognition and largest market share in the market. A brand leader is a product or brand that is recognized as the most popular or dominant within a specific market or industry. It is often the first brand that comes to mind when consumers think of a particular product category and has a strong reputation and customer loyalty. A brand leader typically has a large market share and is often imitated by competitors.

Business

An idea made to satisfy the wants and needs of customers. The 4 main types of businesses are sole traders, partnerships, private and public limited companies.

Primary Sector

Resource Extraction (Mining, Forging etc.) Gaining raw materials

Secondary Sector

Manufacturing products

Tertiary Sector

Service

Quaternary Sector

information technology, research, and development, as well as consulting services and education."

Capital Productivity/Productivity Rate

This measures how efficiently an organisation’s fixed assets are used to generate output for the business.

Charities

A charity is a non-profit organisation that uses donations and funding to support a specific cause or mission. Charities can take various forms, including foundations, religious organisations, and community organisations. The main purpose of a charity is to serve the public good and provide assistance to those in need, rather than to make a profit for shareholders or owners.

Public limited company (PLC)

It is an incorporated business with limited liability and is owned by shareholders, where shares are traded on the stock exchange.

Consumer

The end-users of a product. This contrasts with customers who are the buyers of the product.

Contribution

Contribution per Unit = Selling Price per Unit - Variable Cost per Unit

Corporate Social Responsibility (CSR)

It’s the conscientious consideration of ethical and environmental practices related to business activity. A business that adopts CSR acts morally towards its various stakeholder groups and the well-being of society as a whole.

Director

A person responsible for managing and leading a division or department.

Distribution Channel

The channel of distribution refers to the means used to get a product to the consumer.

Dividends

The distribution of a company's profit, to its shareholders, who get a certain percentage of the profit of the company, if the company allows this, according to their percentage ownership.

Economy of Scale

refer to lower average costs of production as a firm operates on a larger scale due to gains in productive efficiency. Essentially, the spreading of fixed costs across a large number of units.

Internal EOS

purchasing, operational, marketing, transportation, managerial, finance. Internal measures measure a company's efficiency of production and occur because of factors controlled by its management team.

External EOS

pool of skilled labour, good infrastructure, growing market no. of buyers), technological advancements. External happen because of larger changes within the industry, so when the industry grows, the average costs of business drop

External Growth

External growth (or inorganic growth) occurs when a business grows by collaborating with, buying up or merging with another firm. Main types include

Flexible-Working Contract

A flexible working contract is an employment agreement that allows for a more flexible arrangement of working hours and/or location, as opposed to a traditional 9-to-5, in-office setup.

Founding

This refers to the date of the official establishment or creation of a business organisation. The owners are called the founders or co-founders.

Horizontal Integration (line 32-33)

a business acquires another business in the same step in the chain of production (i.e. they have the same business activity). It increases market share and .

Human Resources Department

Department focused on dealing with issues regarding employees such as hiring and organisation. Their task is to work out business's needs for employees, given goals for strategic development.

Incentive Payment

A payment to the employees to stimulate greater output

Income Stream (3.7)

A source of revenue for a company.

Induction Training

Induction is training done to new recruits to familiarise them with the firm's policies as to decrease the time needed to be familiar, which impacts productivity

Internal Growth

Internal growth (also known as organic growth) occurs when a business grows using its own capabilities and resources to increase the scale of its operations and sales revenue.

Labour Turnover

Labour turnover measures the number of workers who leave a firm as a percentage of the workforce, per year. It is often used to gauge the level of motivation in an organisation.

Leadership

Leadership is the process of influencing and inspiring others to achieve organisational goals.

Situational Leadership

Situational leadership is a leadership style that is not based on any single dominant approach. In essence, it is about using the right leadership style for the right situation.

Autocratic Leadership

An autocratic leader is one who makes all the decisions and prefers not to delegate any responsibility. Instead, the autocratic leader (or the authoritarian) simply tells subordinates what to do."

Manufactures

This refers to the process of combining and transforming raw materials and/or components into final goods, ready for sale to customers. SVT's Engineering Division produces water treatment equipment and power turbines.

Market Research

Market Research is designed to discover and gather the opinions, beliefs and preferences of the thinking pattern and buying habits of customers. Market research can either be primary or secondary.

Market Share

measures the value of a firm's sales revenues as a percentage of the total sales revenue in the industry. Market share can be calculated in volume (quantity) or value (monetary value).

Market

A place or system where goods and services are bought and sold.

Marketing Budget

How much money a business allocates to spend on marketing purposes

Mission Statement

A declaration of the underlying purpose of an organisation’s existence and its core values. This statement is updated more frequently than a vision statement.

Monopoly

A market structure characterised by a single seller of a product that faces no competition from other firms and it has substantial market power and is the price maker of the product in that region.

Motivation

The managerial process/aspect where intrinsic and extrinsic factors are used to increase employees’ satisfaction as to reflect on improving their productivity.

Salaries

annual income that is usually paid on a monthly basis

Pros of salaries

security of income, more status, doesn’t vary

Cons of salaries

not related to productivity/effort levels, may lead to complacency, regular appraisal to see if salary should increase

Hourly Wages

payment to a worker made for each hour worked

Commissions

Getting a certain percentage of what YOU as the employee sold

Performance related pay

a bonus scheme to reward staff for above-average performance

Piece-rate pay

payment to a worker for each unit produced

Pros of piece-rate

encourages faster working, labor cost is determined which helps determine price for product

Cons of piece-rate

requires output to be standard/measurable, less quality/safety cause product is rushed, may settle on a pay level and not work above it, little security

Fringe payments

bonus payments

Employee Share-ownership schemes

Gives employees a share or sells shares at a lower price for them

Pros Non-financial method of motivation

designed to lead to higher effort levels, may attract better recruits, does not add to business costs

Cons of non-financial motivation

not related to individual effort, costly to set up and operate

Job Enrichment

Employees have full control over their jobs with little supervision

Job Empowerment

when an employee performs well they get recognition and can have more say in decisions etc, may also get promotions

Job Rotations

Employers work in different divisions of the business

Job Enlargement

Employees have more tasks to do

Teamwork

everyone working together allows for encouragement

Pros of teamwork

fuller use of all talents in workforce, can delayer organization, complete units of work can be given to teams

Cons of teamwork

some are more effective working alone, may develop attitudes that conflict w company, introduction of teams incur training costs

Narrow Span of Control

A narrow span of control means that there are fewer subordinates who are accountable to a manager. It is therefore easier to communicate and the decision making process doesn't take time.

Non-governmental organisations (NGOs)

type of non-profit organisation that operates independently from any government. NGOs are established to serve a specific social cause or address a particular issue, and they may focus on areas such as human rights, poverty alleviation, environmental protection, or disaster relief. They are funded through donations, grants, and other forms of support, rather than by government agencies.

One-Time Incentive Pay

A bonus or a form of compensation for employees in exchange for going above and beyond their normal duties

Order Book (Line 80)

An order book shows the buy and sell prices in real-time (constantly being updated)

Organization by product

refers to structuring a workforce according to the goods or services produced or sold. Each department focuses on a different product within the organisation's overall product portfolio

Cost-plus pricing

Adding a fixed mark-up for profit to the unit price of a product

Pros of cost-plus pricing

Price set will cover all costs of production, Easy to calculate for single-product firms where there is no doubt about fixed cost allocation, Suitable for firms that are ‘price makers’ due to market dominance

Cons of cost-plus pricing

Doesn’t take market/competitive conditions into account, Tends to be inflexible, If sales fall, average total costs rise – this could lead to the price being raised using this method

Price discrimination

Setting a low price for a product to attract consumers to buy other high priced products

Skimming pricing

​​setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand

Eval of market skimming

) High profit margins help to pay for development costs of new product, ( High prices might discourage consumers, ( High prices might encourage more competitors to enter the market

Penetration pricing

Setting a low initial price for a product

Eval of penetration pricing

) Low prices should lead to high demand ( Profit margins might be very low

Loss leading pricing

Setting a different price to different groups of consumers for the same product

Eval. Price discrimination

) increase total revenue, ( high administrative costs, ( Customers may switch to lower-priced market

Predatory pricing (illegal do not use)

Undercutting precis to force competitors out of the market

Eval of predatory pricing

) benefits consumers and increases demand,

Psychological pricing

Setting prices that take account of customers perception of value of the product

Eval of psychological pricing

) price is likely to be consistent with other aspects of other marketing mix ( Price level and demand for the products need to be constantly reviewed

Product

A broad term that refers to any physical or non physical item that is purchased by either commercial or private customers.

Product Portfolio

all products produced by the firm with different product lines and ranges.

Product Line

Group of connected products marketed under a single brand name by the same company.

Product Range

Refers to the different models of the product line."

Productivity per Employee

The output of a company divided by the number of employees.

Productivity

Refers to the level of efficiency in the production process. The more productive resources are, the more output they generate.

Capital Productivity

This measures how efficiently an organisation’s fixed assets are used to generate output for the business."

Recruitment

is the process by which the HR department identifies its needs and vacancies to be filled, and begins the processes of finding most suitable candidates until the contract has been signed.

Redundancy

when a job is no longer required so the employee doing this job becomes redundant through no fault of their own.

Regional Monopoly

Where a business controls 80% or more of market share and has barriers of entry (such as special licensing from the government, or a high startup cost).

Sales revenue

refers to the income of a business derived from the purchase of its goods and/or services from customers. It is calculated by multiplying the selling price of the product by the quantity sold.

Secondary data

Involves the collection of second hand data and information that already exists. Secondary research is a cheaper and faster method of data collection.

Share Price

The value of the share of a company.

Stakeholders are

individuals, groups or organizations that have an interest or are affected by the operations and decisions of a business.

Subsidise -

Governmental grants given to businesses which allows them to purchase raw materials at a cheaper rate. Expects a low price for products

Takeover

When a company buys a controlling interest in another firm, i.e.. it buys enough shares in the target business to hold a majority stake.

Unit costs

refers to cost incurred by a company to produce/ acquire one unit of a product/ service. It is calculated by dividing total cost of production by total number of units produced.

Vertical Integration (line 8-9)

occurs when a business grows by acquiring other businesses in earlier or later stages in the chain of production. It is divided into backwards vertical integration and forward vertical integration.

Vision Statement (1.3)

A statement that defines an organisation's goals and aspirations. Outlines the long term aspirations of a business and what it aims to achieve, usually vague , qualitative and inspiring; forms the foundation for the objectives of a business, including its core values and sense of direction, essentially guiding decision-making and setting the tone of how managers and employees behave