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
2 of 50
Opportunity Costs
The cost of the next best alternative that has to be given up when a decision is made
3 of 50
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
22 of 50
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
49 of 50
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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