Business Studies Unit 2 Key Words

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Organic/Internal Growth
Occurs when a business sells more of its products.
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External Growth/Integration
Occurs when a business joins together with another business.
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Merger
Occurs Occurs when two or more businesses join together to form a new business.
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Takeover/Acquisition
Occurs when one business gains control of another.
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Franchise
Occurs when one business (a franchisor) sells the rights to its name and products to another (a franchisee).
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Economies Of Scale
When the cost per unit falls as a business expands.
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Diseconomies Of Scale
When the cost per unit increases as a business expands.
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Flotation
When a private limited company (ltd) becomes a public limited company (plc) and has its shares listed on the stock exchange.
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Stock Exchange
A market for shares of private limited companies. Large numbers of shares are being bought and sold at the same time.
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Business Ethics
Whether a business decision is seen as morally right or wrong. An ethical decision is made on the basis of what you think is right.
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Protectionist Measures
Policies that governments use to protect their own businesses against foreign competition.
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Import
Product bought from abroad.
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Quota
A limit on the number of foreign goods imported into a country.
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Tariff
A tax on foreign goods imported into a country.
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Product Portfolio
The collection of products that a firm produces.
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Dog
A product that has a low market share in a low-growth market.
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Cash Cow
A product that has a high market share in a low-growth market.
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Question Mark
A product that has a low market share in a fast-growth market.
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Star
A product thatbhas a high market share in a fast-growth market.
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Product Life Cycle
Shows how the sales of a product change over time.
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Extension Strategies
Attempts to maintain the sales of a produuct and prevent it from entering the decline stage of the product life cycle.
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Promotional Activites
The different ways in which a firm tries to communicate with its customers.
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Distribution Channel
Describes how the ownership of a product passes from the producer to the final customer.
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Wholesalers
They buy in large quantities (bulk) from a producer and sell to retailers.
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Retailers
Shops that sell direct to the customer.
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Direct Marketing
Occurs when there is a direct link from the producer to the customer with no intermediatries.
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Bank Loan
A sum of monet given by a bank to a business. The money is repaid in instalments each month over a period of several years.
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Mortgages
Loans from banks and building societies that are used to buy land and buildings such as offices and shops.
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Retained Profit
Profits made in earlier years and kept by the business and used for a variety of reasons including paying for growth.
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Asset
Something that is owned by a business. Examples include land, buildings, vehicles and machinery.
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Interest
A payment made in order to borrow money. It means a business pays back more than it borrows.
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Collateral
An asset that a bank holds as security for the repayment of a loan.
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Profit And Loss Account
A financial statement showing a business's revenues and costs and thus its profit and loss over a period of time.
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Balance Sheet
Sets out the assets and liabilities that a business has on a particular da.
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Market Leader
The biggest firm in a market i.e. it has the largest market share.
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Gross Profit
A business' sales revenue minus its cost of sales over a period of time normally a year.
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Net Profit
A business' sales revenue minus its cost of sales and overheads over a period of time usually a year.
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Revenue
The value of sales achieved by a business over a period of time normally a year.
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Liquidity
The amount of cash that a business has and shows whether the business can pay its debts over the coming months.
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Current Assets
Items that a business owns but is not expected to keep for more than one year, such as cash and stock.
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Current Liabilities
The debts that a business has that are due for payment within 1 year, such as payments to suppliers.
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Stock
Raw materials thhat have not yet been used or products that have been made but not sold.
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Organisational Chart
A plan showing the roles of, and relationships between, all the employees in a business.
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Line Manager
An employee's immediate superior or boss.
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Span Of Control
The number of employees managed directly by a manager.
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Levels of hierarchy
The layers of authority in a business.
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Centralisation
Occurs whena small number of senior managers in a business take all the important decisions.
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Decentralisation
Allows employees working in all areas of the business to take decisions.
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Authority
The power to control others.
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Delegation
The passing down of authority to more junior employees.
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Recruitment
The process of finding and appointing new employees.
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Selection
Picking the right employees from among those who have applied for a job.
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Job Description
A document stating information about the duties and tasks that make up a particular job.
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Person Specification
Sates the qualifications and skills required by an employee to fill a particular job.
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Curriculum Vitae
A document that sets out information about a person, including qualifications, employment history and interests.
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Training
A range of activities giving employees job-related skills and knowledge.
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Induction Training
The training given to an employee when he or she first starts a job.
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Appraisal
Making a judgement about an employee's performance within a business over a period of time.
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Motivation
The will or desire to do something.
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Piece-rate Pay
A system whereby employees are paid for each unit of output that they produce.
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Democratic Style Of Management
Where employees play a major part in decision making.
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Authoritarian Style Of Management
Where senior managers keep authority within a business and take most of the decisions.
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Flow Production
Where an item moves continuously from one stage of the process to another.
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Specialisation
Occurs when individuals focus on a limited number of tasks.
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Lean Production
An approach to production that aims to minimise waste whilst ensuring quality.
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Kaizen
'Continuous Improvement' An approach to production that aims to achieve change from a series of small steps.
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Market Capitalisation
Measures the value of all its shares, i.e. it is the market price of a share x the number of shares.
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Total Quality Management
Involves all employees in the process of preventing mistakes in order to achieve zero defects
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Other cards in this set

Card 2

Front

Occurs when a business joins together with another business.

Back

External Growth/Integration

Card 3

Front

Occurs Occurs when two or more businesses join together to form a new business.

Back

Preview of the back of card 3

Card 4

Front

Occurs when one business gains control of another.

Back

Preview of the back of card 4

Card 5

Front

Occurs when one business (a franchisor) sells the rights to its name and products to another (a franchisee).

Back

Preview of the back of card 5
View more cards

Comments

Sana11881

very very helpful and shortened to remember

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