Business - Intro to Business

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Fixed Costs
Costs that don't change with output
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Variable Costs
Costs that change with output
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Opportunity Costs
The cost of the next best alternative that has to be given up when a decision is made
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Added Value
The increase in worth that a business creates for a product / the difference between what a business pays its suppliers and the price that it is able to charge for that service or product
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Primary Sector Business
Extract raw materials from natural resources e.g Fishing
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Secondary Sector Business
Take the raw materials and turn them into finished products
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Tertiary Sector Business
These provide the product through service/retail
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Public Sector Organisations
These organisations are owned and controlled by local/national government. They usually don't aim for profit
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Private Sector Organisations
These are businesses that are owned and controlled by private individuals. They usually aim for profit
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Unincorporated Business (Soletraders/Partnerships)
These are businesses where there is no legal difference between the owners and the business. (owners have unlimited liability)
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Incorporated Companies (LTD's/PLC)
These are businesses that have separate legal identity from its owner (they have limited liability)
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Soletrader
Owned and controlled by one person. E.g Window cleaner
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Partnerships
Between 2-20 people owning and running a business in order to make a profit E.g Accountants/Estate Agents
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Private Limited Company (LTD)
A company owned by at least 2 shareholders. E.g Walkers Snack Foods LTD / Eddie Stobart LTD
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Public Limited Company (PLC)
A company that sells shares to the public on the London Stock Exchange
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Franchise
The right to trade using a successful company's product and image
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Franchisee
The business that agrees to manufacture, distribute or provide a branded product under license by a franchisor
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Franchisor
The business that gives franchisees the right to sell its products, in return for a fixed sum of money and royalty payment
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Economies of Scale
A reduction in unit cost as the scale of production increases
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Diseconomies of Scale
When cost per unit increases when scales of production increases as a result of the business being large
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Stakeholder
People who have an interest in the activities of the business
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Internal Stakeholder
These are people who work for the business, they are INSIDE the business and involved in the day to day running of the business
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External Stakeholder
These are people who do not work for the business and are NOT involved in the day to day running of the business
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S.M.A.R.T Objectives
Specific, Measurable, Agreed, Realistic, Time-related
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Aims
The businesses purpose and what they are striving for
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Objectives
A goal that the business is looking to achieve to enable them to achieve their ultimate aim
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Strategical Objective
The concern the overall policy of the business. Long term (3-5 years) and comes with a degree of risk
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Tactical Objective
Medium Term. Usually within a year.
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Operational Objectives
Short Term (weekly/monthly) carry little risk and little amount of planning - day to day running of the business.
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The Market
The place where buyers and sellers come together to exchange goods and services (usually for money)
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Demand
The quantity of good or service that buyers/consumers wish to purchase at a given price
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Supply
The amount of a product or service that the suppliers (sellers) offer for sale at a given price
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Market Equilibrium
When quantity demanded is equal to the amount supplied
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Competitive Market
Many small firms competing providing very similar products. Usually compete on price and advertising
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Oligopoly
A few firms competing providing different products in terms of design and quality. DON'T compete on price
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Monopoly
One producer sells at least 25% of total market shares, one main product and they don't really compete
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Demography
The main social factor affecting businesses. Involving the study of the population
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Business Ethics
The influence of values and beliefs upon the conduct and operation of the business
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Accountability
The extent to which a named individual is held responsible for the success or failure of a policy
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Market Research
The process of gaining information about customers, competitors and market trends through collecting primary and secondary data.
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Primary Research
Information that does not already exist. Examples include: consumer panels, observation, test marketing, focus groups
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Secondary Research
This information already exists in some form. Examples include: sales figures, annual reports, stock records
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Cluster Sampling
Units of population found in certain geographic groups e.g Primary school children in Lichfield. A random sample of this cluster is taken then all units within the cluster are examined
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Convenience Sampling
Uses those who are willing to volunteer
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Judgement Sampling
A deliberate choice of sample
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Quota Sampling
Obtaining a sample that is "representative" of the overall population
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Simply Random Sampling
Ensures that every member of the population has an equal chance of selection
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Stratified Random Sampling
This involves dividing the sample into segments based on existing knowledge
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Centralised
This means that all of the important decisions are made at the head-office
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Decentralised
This means that some important decisions are made by managers not based at head office
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Other cards in this set

Card 2

Front

Costs that change with output

Back

Variable Costs

Card 3

Front

The cost of the next best alternative that has to be given up when a decision is made

Back

Preview of the back of card 3

Card 4

Front

The increase in worth that a business creates for a product / the difference between what a business pays its suppliers and the price that it is able to charge for that service or product

Back

Preview of the back of card 4

Card 5

Front

Extract raw materials from natural resources e.g Fishing

Back

Preview of the back of card 5
View more cards

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