Business unit 2 Definitions

economies of scale
reasons why average costs of each item fall as a firm expands
1 of 63
organic growth
expansion from within the business - branches and franchises
2 of 63
Inorganic growth
expansion by merging or taking over another business
3 of 63
internet selling
marketing products through the businesses website
4 of 63
the firm that buys the franchise rights from the existing business
5 of 63
the existing firm that sells the franchise rights to another business
6 of 63
an agreement between business owners to combine two businesses and operate as a larger one
7 of 63
purchasing another business from its owners
8 of 63
horizontal integration
same industry and stage of production
9 of 63
Vertical backward integration
two businesses in same industry but diff sated of production towards the supplier
10 of 63
vertical forward integration
same industry diff stage of production towards the customer
11 of 63
joining two businesses in different industries
12 of 63
any business with 25 per cent market share
13 of 63
limited company
a business recognised as a legal unit that offers shareholders
14 of 63
private limited company
company that cannot sell shares to the general public. not listed on stock exchange
15 of 63
Company that can sell shares to the general public by being listed on the stock exchange
16 of 63
payment made to shareholders from company profits - made annually
17 of 63
divorce between ownership and control
when directors control aPLC and thousands of shareholders own it but the two groups have different objectives
18 of 63
Ethical objective
a business aim of doing the right thing according to the values and beliefs of managers even f this isn't the most profitable way
19 of 63
Environmental objective
a business aim to protect the environment during its operations. this reduces social costs
20 of 63
Social costs
the costs of business activity including both financial costs paid by the firm and the costs on society
21 of 63
social benefits
the benefits of a business activity nit just to the firm but to society
22 of 63
increasing trend for goods to be traded internationally and for companies to locate abroad
23 of 63
Off - shoring
making products or parts of products in other countries, services can also be off shored like call centres moving to india
24 of 63
a business with operations in more than one country
25 of 63
spreading risk by selling in different markets
26 of 63
product life cycle
the lifespan of a product recorded in sales from launch to being taken off the market
27 of 63
extension strategies
steps taken to extend the life cycle of a product
28 of 63
Competitive pricing
setting a price based on prices charged by competitors
29 of 63
Price skimming
setting a high price to create high quality snd exclusive image
30 of 63
penetration pricing
setting a price at a low level to gain greater market share
31 of 63
cost plus pricing
setting the price by adding a profit mark up to the total cost of producing s product
32 of 63
loss leader pricing
setting a price below cost hoping to gain other profitable sales
33 of 63
Direct marketing
using direct means to contact consumers to increase sales (e-mail, telemarketing)
34 of 63
a business pays for an activity or an event to gain publicity
35 of 63
middleman or distributer that buys in bulk, holds stock and sells mainly to retailers not consumers
36 of 63
selling to the customer through telephone contact alone
37 of 63
Retained profit
profit kept in the business after tax and dividends have been paid
38 of 63
sale and leaseback
selling an asset, such as building to a leasing company and paying an annual leasing chase so that the asset can still be used.
39 of 63
gross profit
the difference between sales revenue and cost of making the PRODUCTS SOLD
40 of 63
expenses of the business that are not directly part of the production process
41 of 63
net profit
the difference between sales revenue and TOTAL COSTS of the BUSINESS
42 of 63
Gross profit margin
percentage of sales revenue that is gross profit 2
43 of 63
balance sheet
lists the value of a company's assets and liabilities
44 of 63
item of value owned by the business
45 of 63
debts owed by a business
46 of 63
how easy it s for a business to pay off its short term debts
47 of 63
organisational structure
the internal links between managers and workers showing lines of authority
48 of 63
layers of management
the number of different levels of management and responsibly in a structure
49 of 63
span of control
the number of junior employees each manager is directly responsible for
50 of 63
senior managers take all important decisions
51 of 63
decision making over is spread to mangers in branches and divisions of the business
52 of 63
job analysis
identifying the tasks and skills needed to perform a job well
53 of 63
job description
a detailed seamen of the nature of the job and the tasks involved
54 of 63
person specification
a profile of the type of person likely to make a good applicant
55 of 63
induction training
initial training to familiarise new recruits wit the systems of a business
56 of 63
on the job training
takes place when employees receive training as they are working at the place of work
57 of 63
off the job training
takes lace away from the job at another place
58 of 63
assessing how effectively an employee is working
59 of 63
the will to do work due to the enjoyment of the work itself
60 of 63
retaining staff
keeping existing staff in the business which cuts down the cost of recruitment selection and training
61 of 63
autocratic management
managers who believe in taking all decisions and just passing instructions on to workers
62 of 63
democratic management
managers who involve workers and less senior managers in decision making
63 of 63

Other cards in this set

Card 2


expansion from within the business - branches and franchises


organic growth

Card 3


expansion by merging or taking over another business


Preview of the back of card 3

Card 4


marketing products through the businesses website


Preview of the back of card 4

Card 5


the firm that buys the franchise rights from the existing business


Preview of the back of card 5
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