Paper 1 Terms

✅ Business Organization and Environment

Multinational company (MNC):
A multinational company is a business that operates in multiple countries, often with a headquarters in one country and branches, factories, or subsidiaries in others. These organizations benefit from wider market access, global branding, and cost advantages through economies of scale.

Internal growth:
Internal, or organic, growth refers to a business expanding through its own operations rather than through mergers or acquisitions. This can include increasing sales, launching new products, investing in technology, or opening new branches to reach more customers.

External growth:
External growth involves expanding a business by merging with or acquiring other companies. This type of growth allows for faster access to new markets, customers, and products, often leading to greater market share and diversification.

Merger and acquisition:
A merger is when two companies agree to join together to form a new, combined entity. An acquisition occurs when one company buys another. Both are strategic tools for achieving external growth and can help firms quickly enter new industries or strengthen competitive positions.

Public limited company (PLC):
A public limited company is a business owned by shareholders, with its shares traded on a public stock exchange. PLCs can raise substantial capital from the public, but must comply with strict regulatory requirements and are accountable to shareholders and the public.

Mission statement:
A mission statement defines the core purpose and values of a business. It provides a guiding framework for decision-making and helps ensure alignment across departments and employees.

Vision statement:
A vision statement outlines what the company aspires to achieve in the long term. It is forward-looking and provides a sense of direction and inspiration for strategic planning and growth.

Objectives:
Objectives are specific, measurable goals that help a business achieve its broader mission and vision. These can be classified as strategic (long-term), tactical (medium-term), or operational (short-term), and they guide day-to-day operations and performance evaluation.

Stakeholders:
Stakeholders are individuals or groups affected by or capable of influencing a business’s activities. These include employees, customers, suppliers, investors, governments, and the community. Effective stakeholder management is vital for sustainable operations.

Corporate Social Responsibility (CSR):
CSR is a company’s voluntary commitment to ethical behavior and sustainable development. It involves initiatives that benefit society and the environment, such as community support, ethical labor practices, and reducing environmental impact.

Ethics:
Business ethics are the moral principles that guide corporate behavior and decision-making. Ethical conduct builds trust and can include transparency, environmental responsibility, fair treatment of workers, and ensuring product safety.

Pressure group:
A pressure group is an organized collective that seeks to influence business or government actions, typically to promote environmental protection, consumer rights, or social justice. These groups can affect public perception and business policy.

Change:
Change refers to how businesses adapt to evolving internal and external conditions, such as shifts in consumer preferences, technology, regulation, or competition. Successfully managing change is key to long-term success and resilience.

✅ Marketing

Marketing mix (4Ps):
The marketing mix is a combination of strategies used to bring a product to market effectively. It includes Product (design, features), Price (cost to the customer), Place (distribution channels), and Promotion (advertising and communication strategies).

Promotion:
Promotion is the activity of informing and persuading consumers to purchase a product. It includes advertising, digital marketing, public relations, and promotional campaigns, all aimed at building brand awareness and driving sales.

Product:
A product is a good or service that meets the needs and wants of consumers. Effective product strategy considers design, features, packaging, and quality to enhance customer satisfaction and brand reputation.

Place:
Place refers to the methods of distribution used to deliver a product to the customer. This can include retail stores, online platforms, direct sales, or vending machines, and affects how easily consumers can access the product.

Price:
Price is the amount charged to customers for a product. Pricing strategies vary depending on factors like competition, market demand, production costs, and business objectives, such as using premium pricing or penetration pricing.

Target market:
A target market is a defined group of consumers a business aims to reach. Segmentation can be based on demographic, geographic, psychographic, or behavioral factors to tailor marketing efforts effectively.

Market segmentation:
Market segmentation is the process of dividing a market into distinct groups of buyers with similar characteristics. This allows businesses to customize products and marketing strategies to suit each segment’s needs.

Branding:
Branding involves creating a unique image, name, or symbol that identifies and differentiates a product. Strong branding fosters customer loyalty, builds recognition, and enhances perceived value.

Product life cycle:
The product life cycle outlines the stages a product goes through: introduction, growth, maturity, and decline. Businesses use strategies like updates or rebranding to extend a product’s profitability during its lifecycle.

Social media marketing:
Social media marketing leverages platforms like Instagram, YouTube, and TikTok to promote products, interact with customers, and build community around a brand. It's cost-effective and allows for targeted outreach.

Social media influencer:
An influencer is a person with a significant online following who can sway purchasing decisions through endorsements. Brands collaborate with influencers to enhance reach and credibility, especially among specific demographics.

Unique selling point (USP):
A USP is a distinctive feature or benefit that sets a product apart from competitors. It could be superior quality, innovation, ethical sourcing, or environmental friendliness.

Customer profile:
A customer profile describes a typical customer, including demographic data (e.g., age, income) and psychographic traits (e.g., lifestyle, values). These profiles guide marketing and product development decisions.

Consumer trends:
Consumer trends reflect shifts in buyer preferences and behaviors over time, influenced by social, technological, and environmental factors. Recognizing trends like health-consciousness or sustainability helps businesses stay competitive.

Digital marketing:
Digital marketing involves promoting products or services through digital channels such as websites, email, social media, and search engines. It offers real-time analytics and cost-efficient targeting.

Avatar (in marketing):
An avatar is a digital persona, often animated or computer-generated, used to engage consumers in campaigns. Avatars can embody brand values or interact with users in immersive digital experiences.

✅ Human Resource Management

Recruitment:
Recruitment is the process of attracting, evaluating, and hiring qualified candidates for jobs. It involves identifying staffing needs, advertising vacancies, reviewing applications, and conducting interviews.

Training:
Training develops employees’ skills and knowledge to improve job performance and adapt to evolving demands. It can be on-the-job, off-the-job, or through continuous learning initiatives.

Organizational structure:
An organizational structure defines how tasks, responsibilities, and communication flow within a business. It can be hierarchical, flat, matrix-based, or team-oriented, depending on the company's size and strategy.

Motivation (Maslow, Herzberg, Taylor):
Motivation theories explain what drives employee performance. Maslow’s hierarchy focuses on fulfilling needs, Herzberg distinguishes between motivators and hygiene factors, and Taylor emphasizes financial incentives.

Communication:
Communication in a business context involves the exchange of information to ensure coordination, clarity, and effective decision-making. It includes verbal, written, digital, and non-verbal channels.

Workforce planning:
Workforce planning ensures that a business has the right number of people with the right skills at the right time. It involves forecasting staffing needs, succession planning, and adapting to labor market trends.

✅ Finance and Accounts

Costs (fixed and variable):
Fixed costs remain constant regardless of output (e.g., rent), while variable costs fluctuate with production levels (e.g., raw materials). Understanding these helps manage budgets and pricing strategies.

Revenue:
Revenue is the total amount earned from sales before expenses are deducted. It’s a fundamental indicator of business performance and market demand.

Profit:
Profit is the financial gain made after subtracting all costs from revenue. It's essential for sustainability, reinvestment, and satisfying stakeholders.

Sources of finance:
Businesses can fund operations through internal sources (e.g., retained earnings) or external sources (e.g., bank loans, share issuance). Each source varies in cost, risk, and control implications.

Investment:
Investment involves allocating resources—usually money—into projects expected to generate future returns, such as equipment, research, or new product development.

Profit and loss account:
This financial statement summarizes income, expenses, and profit or loss over a given period. It helps assess financial health and guide strategic decisions.

Cash flow forecast:
A cash flow forecast predicts the timing and amount of cash inflows and outflows. It helps ensure liquidity and avoid cash shortages.

Budgeting:
Budgeting sets financial targets for income and expenditure over a specific period. It aids in financial planning, cost control, and measuring performance against goals.

✅ Operations Management

Production methods (job, batch, flow):
Job production is for customized items, batch production handles groups of similar items, and flow production is continuous for large-scale output. Each suits different product types and demand levels.

Quality assurance:
Quality assurance is a proactive approach to maintaining standards throughout the production process. It ensures consistent quality, reduces defects, and improves customer satisfaction.

Lean production:
Lean production focuses on eliminating waste and inefficiency while maximizing value. Techniques include just-in-time inventory, continuous improvement, and employee empowerment.

Sustainability:
Sustainability in operations means meeting current production needs without compromising future resources. It includes practices like reducing emissions, conserving water, and using renewable materials.

Green production:
Green production emphasizes environmentally responsible manufacturing. It minimizes energy use, waste, and pollution, aligning business goals with environmental stewardship.

Supply chain:
The supply chain includes all steps from sourcing raw materials to delivering finished products to customers. Efficient supply chains reduce costs and ensure timely delivery.

Recycling:
Recycling converts used materials into new products, reducing waste and resource consumption. It supports environmental goals and can enhance brand reputation.

Biodegradable:
Biodegradable materials break down naturally without harming the environment. Using such materials helps businesses meet sustainability targets and appeal to eco-conscious consumers.

Innovation:
Innovation involves creating new or improved products, processes, or business models. It drives competitiveness, growth, and adaptation in dynamic markets.

Economies of scale:
Economies of scale occur when increasing production leads to lower average costs per unit. These savings come from factors like bulk purchasing, specialized labor, and efficient use of resources.