Business Paper 1 Mock Case Study Key Terms (2 mark definitions)

Location: the geographical position of a business. The location decision of a business is crucial and will depend on both quantitative and qualitative factors. It can have profound implications on the profitability and survival of an organization. (5.4)

Company: a business owned by shareholders who have limited liability. The business has a separate legal entity to its shareholders. (1.2)

Privately held company: an incorporated business owned by shareholders who have limited liability. The shares of a privately held company cannot be bought by or sold to the general public. (1.2)

Publicly held company: an incorporated business owned by shareholders who have limited liability but with the shares being openly traded on a public stock exchange. (1.2)

Finance:

Finance refers to the money required for business activities, such as funding the day-to-day running of the business throughout the year, and to fund its expansion. Finance for a business can come from internal sources (such as retained profit)or external sources (such as share capital and bank loans). (3.1 - 3.2)

Expansion:

The process of growing a company's operations, revenue, market share, and profitability.

Bamboo plates & cutlery: These  are  eco-friendly  dishware,  tableware,  and  utensils  made  from  sustainable  bamboo.  This reduces the environmental impact of using plates and cutlery at BON’s music festivals compared to traditional materials like plastic or other non-biodegradable compounds

Contracts: legally binding agreements between two parties, such as an employer and employee. The legal agreements set out specific terms and conditions established for work-related matters. 

Covid-19 Pandemic: The  worst  global  health  crisis  in  living  memory  caused  by  the  novel  coronavirus  in  late  2019, impacting economies, healthcare systems, and people’s daily lives across the world. The pandemic had devastating impacts on the whole music industry, and in particular music concerts and musical festivals, due to lockdown and social distancing measures.

Credit Card: This  is  a card  payment  system  that  allows  qualifying  customers to  borrow funds  from  a  financial services provider (such as banks or credit card companies) for making purchases. The credit card users  repay  the financiers  at  a  later  date,  often  with  interest  charges  if  there  are  late  payments. Credit card payment allows attendees at BON’s events to pay without using cash.

Freelancer: A freelancer is a self-employed individual who provides services to their clients, rather than working for  an  employer.  Freelancers  work  on  specific  projects  instead  of  long-term  employment commitments.  Examples  of  freelancers  in  the  music  festivals  industry  include  music  performers, music composers, choreographers, videographers, marketers, and publicists.

Solar Power: Solar power works by converting energy from the sun into power. There are two forms of energy generated from the sun for our use – electricity and heat. Both are generated through the use of solar panels.

Music Genre: A music genre is a conventional category that identifies some pieces of music as belonging to a shared tradition or set of conventions. Genre is to be distinguished from musical form and musical style, although in practice these terms are sometimes used interchangeably, some examples of music genres are jazz, RnB, Pop, classical etc.

Employees: A  type  of  internal  stakeholder,  employees  are  the  people  who  work  for  a  business.  They  are employed to carry out specific tasks or roles. They can have significant influence on the organization, such as their level of loyalty, motivation, and productivity. BON hires both permanent and temporary employees (1.4)

Fee: These are payments made to a professional body in exchange for advice or services. Essentially, this refers to the price a customer pays for receiving advisory services.

Average cost:

This refers to the cost per unit of production. The average cost is derived from dividing the total cost of output by the number of units produced. As a business grows, the average cost will tend to fall due to economies of scale. (1.5)

Directors: senior executives in an organization who hold autonomous decision-making responsibility and power. They are appointed to manage and oversee the operations of a company. (2.2)

Challenge(s):

A challenge refers to any internal or external factor that hinders the operations and profitability of an organization. 

Environmental sustainability: This  is  one of  the three  pillars  in  John  Elkington’s  triple  bottom  line  (TBL),  along  with  social  and economic sustainability. Environmental sustainability (or ecological sustainability) is the ability of a business to maintain the use of its renewable and non-renewable resources for future generations. This means production does not jeopardize the resources for successive generations. Depletion of the earth’s scarce resources is not sustainable as they cannot be used indefinitely. (1.3)

Greenwashing: This  refers  to  misleading  marketing  tactics  that  falsely  portray  sustainable  practices  or  describe products to be more environmentally friendly than they actually are. Negative environmental impacts from music festivals are mainly related to transportation, energy usage, littering, and waste.

Interest rate: This refers to the  cost  of borrowing money or  the  return  on savings, expressed  as a  percentage figure. The higher the interest rate, the higher the cost of borrowing, including those with credit card debts, and the greater the incentive for saving money. 

Landfill site: A landfill site is a designated area for the disposal of waste materials, which is compacted and buried in order to minimize the environmental impacts of waste and litter.

Line Manager: the person directly above an employee on the next hierarchical levl in an organizational structure. Line managers supervise and manage their subordinates on a day-to-day basis. (2.2)

Reservoir: a facility for storing large volumes of water, used for different reasons like drinking water, generating hydroelectric power, and irrigation (agricultural purposes). 

Temporary workers: In Charles Handy’s Shamrock Organization model, temporary workers are employees hired for a limited period of time or until the completion of a project. (2.2)

Break-even: Break-even occurs when a business is neither profitable nor making a loss, their total revenue is equal to their total costs, both fixed and variable. Reaching break-even is a common objective for startup businesses. (5.5)

BTL promotion: Below-the-line promotion refers to the use of non-mass media promotional activities including direct marketing, direct selling, sales promotion, sponsorships, trade shows and word-of-mouth marketing. BTL promotion allows businesses to have direct control in targeting individual market segments and is much cheaper compared to ATL promotion. (4.5(c))

Capital expenditure: Capital  expenditure  is  a  use  of  finance,  referring  to  the  spending  of  a  business  on  acquiring, maintaining,  and/or  upgrading  its  non-current  assets.  Capital  expenditure  represents  a  financial investment in the business, e.g., the purchase of capital equipment for BON’s head office (3.1)

Communication: refers to the transfer or exchange of information, ideas or messages from one party to another. (2.6)

Ethical objectives: the moral principles that guide business decision-making. Ethics are the beliefs of what society considers to be morally right or wrong. Ethical objectives are shaped by societal norms and expectations of business practices that are deemed to be fair to society as a whole. (1.3)

Job production: Job production refers to a particular production method where the goods and services produced by a company are customized and manufactured to meet specific customer expectations and requirements. In job production, products tend to be charged for higher prices as they withhold a unique selling point. (5.2)

Leadership: the process of influencing, invigorating and inspiring others to achieve organisational goals. Leaders tend to focus on achieving broader goals or visions with no definite time frame in mind. (2.3)

Management: the practice of achieving an organisation’s objectives by using and controlling the available human and non-human resources of the business in an effective way. Managers tend to focus on specific organizational goals within a definite time frame. (2.3)

Sales revenue: refers to the income of a business received from customer purchases of

its goods and/or services. It is calculated by multiplying the selling price of the product by the quantity sold. (3.3)

Salaries: A salary is a fixed amount of money paid on a periodic basis, usually per month, to full-time or permanent staff. Hence, salaries represent a fixed cost to an organization. Salaries create a sense of security as employees know how much they will be paid each month. (2.2)

Triple Bottom Line: a sustainability framework that revolves around maximizing the three P's: people, planet and profit. This framework is most commonly seen in social enterprises, focusing not only on their financial gain, but also benefit society and the environment. (1.3)

Sources of finance: Sources of finance refers to the various methods by which an organization obtains its money. These sources can be split into internal sources (such as retained profit) and external sources (such as bank loans, leasing, and share capital raised on the stock exchange from the general public). (3.2)