unit 1 definition

Consumer goods

The physical and tangible goods sold to the general public.

Durable consumer goods

Goods that can be used for a long time, like cars and washing machines.

Non-durable goods

Goods that can be used only once, like food and drinks.

Consumer services

Non-tangible products sold to the public, such as hotel stays and insurance.

Consumer

An individual who buys goods and services for their own use.

Customer

An individual or organization that purchases goods and services from a business.

Factor of Production

Resources required by a business to commence production of goods and services.

Capital goods

Physical goods used in the production of other goods and services, such as machines.

Adding value

Increasing the difference between the cost of materials and the selling price of finished goods.

Added value

The difference between the cost of purchased materials and the selling price of finished goods.

Opportunity cost

The benefit of the next most desired option that is given up.

Entrepreneur

Someone who takes the financial risk of starting and managing a new venture.

Enterprise

The action of taking initiative and risk to start a business.

Branding

The process of differentiating a product with a unique symbol or image.

Multinational Business (MNC)

A firm with its head office in one country but operating in others.

Intrapreneur

An employee who takes responsibility for turning an innovative idea into a profitable product.

Business Plan

A document outlining a business's objectives, strategies, and market context.

Primary Sector Business Activity

Firms engaged in farming, fishing, and extracting natural resources.

Secondary Sector Business Activity

Firms that manufacture products from natural resources.

Tertiary Sector Business Activity

Firms that provide services to consumers and businesses.

Quaternary Sector Business Activity

Firms that provide information-related services, such as R&D and consultancy.

Public Sector

Organizations accountable to the government.

Private Sector

Businesses owned by individuals or groups.

Mixed Economy

Economic resources owned and controlled by both private and public sectors.

Free-Market Economy

An economy where resources are primarily privately owned with minimal state intervention.

Command Economy

An economy where resources are owned and controlled by the state.

Sole Trader

A business owned and operated by one person.

Partnership

A business formed between two or more individuals sharing responsibilities and profits.

Limited Liability

Shareholders are only liable for the amount they invested in the company.

Unlimited Liability

Owners are fully responsible for the debts of the business, risking personal assets.

Private Limited Company

A business owned by shareholders who cannot sell shares to the public.

Share

A certificate of ownership in a company entitling the owner to dividends.

Shareholder

An individual or institution owning shares in a limited company.

Public Limited Company

A company with the right to sell shares to the public, traded on the stock exchange.

Public Corporation

A business enterprise owned and controlled by the state.

Memorandum of Association

Document stating the company's name, address, maximum share capital, and aims.

Articles of Association

Document covering the internal workings and control of a business.

Cooperative

A jointly owned business operating for mutual benefit of its members.

Franchise

A business that uses the name and systems of an existing successful business.

Franchiser

The person or business selling the rights to their brand to others.

Franchisee

The person or business purchasing the license to operate under an established brand.

Joint Venture

An agreement between two or more businesses to collaborate on a project.

Social Enterprise

A business mainly focused on social objectives rather than profit.

Triple Bottom Line

The three objectives of social enterprises: economic, social, and environmental.

Revenue

Total value of sales made during a specific time period.

Capital Employed

Total value of long-term finance invested into a business.

Market Capitalization

Total value of a company's issued shares.

Market Share

Sales of a business as a proportion of total market sales.

Small Business

A business with limited scale, usually privately owned and operated.

Family Business

A business managed by family members across generations.

Organic Growth

Expansion through establishing new facilities, stores, or factories.

External Growth

Expansion through the integration or takeover of another business.

Merger

Agreement to unite two businesses into a new entity.

Takeover

Acquisition of more than 50% of shares in another company.

Horizontal Merger

Integration with a business in the same industry at the same production stage.

Vertical Integration

Integration with a business at a different stage of production in the same industry.

Backward Vertical Integration

Integration with businesses earlier in the production process.

Forward Vertical Integration

Integration with businesses later in the production process.

Conglomerate Integration

Integration with a business in a different industry.

Synergy

The combined effectiveness of two organizations is greater than their separate effects.

Strategic Alliance

An agreement between firms to share resources for a common goal while remaining independent.

Business Objectives

A measurable target the business aims to achieve.

Corporate Social Responsibility (CSR)

Businesses considering societal impact in their decisions.

Pressure Group

An association created to influence policy for societal improvement.

SMART Objectives

Objectives that are specific, measurable, achievable, realistic, and time-limited.

Annual (Company) Report

Document detailing a firm's yearly activities and financial accounts.

Business Strategy

A long-term plan consisting of actions to achieve specific objectives.

Tactic

A short-term plan of action within the overall strategy.

Target

A short-term objective necessary to achieve the overall aim.

Ethical Code (Code of Conduct)

Document outlining rules for employee behavior.