Business Unit 2a Key terms

Everything you need to know for the Business Studies Unit 2a: all of the key terms and their definitions, very true and variefied with edexcel specification  

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Above the line promotion
Main media, paid for, advertising eg TV, Newspapers ads.
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Below the line promotion
All types of promotion apart from main media eg Public Relations, Sponsorship, Special offers, Direct Mail selling.
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Bonus
Extra salary paid to worker for meeting a target (individual or group)
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Boston Matrix
Method of analysing your product portfolio by plotting market growth against market size.
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Branding
Differentiating your make of a product so that people do not just ask for the product, but your brand of that product.Eg Heinz Tomato Sauce.
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Budget
Financial plan for the future, it involves estimating revenue for next month or year, and estimating or allocating amounts to be spent under different headings eg labour, materials. The forecast or estimate is normally then compared each month to
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Capacity utilisation
Measures what % of your maximum output is actually being produced.
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CApital intensive
Production method with large input of machinery ( capital) and less amount of labour eg Oil Refinery
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CAsh flow forecast
An attempt to forecast future inflows and outflows of cash – usually on a monrh by month basis – done partly to forecast any months where an overdraft may be needed.
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Centralisation
When decisions in a business are made mainly “in the centre” or at the top by senior managers.
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Chain of Command
The vertical links in a firm with several layers in the hierarchy. Communication or instructions are passed down (and maybe up) the chain of command.
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Consumer Protection Laws
Laws or legislation designed to protect consumers/customers from unfair actions by those selling them products. Eg a product must be “fit for the purpose” and “as desribed”.
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Contingency finance
Working capital in reserve ready to be used when a one off financial problem occurs (could be advanced permission to have or increase an aoverdraft).
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Consultation
When management asks subordinates for their opinons on an issue, problem, or decision. Then managers listen, but they still make the final decision.
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Credit terms
The length of time ( eg 60 days) that a seller gives a buyer before they have to pay. Applies especially when a business sells to another business and gives them “Trade Credit”
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Decentralisation
When the senior managers of a firm allow important decisions to be made at a lower level eg by their branch managers.
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Delegation
When senior managers pass the authority to make decisions or plan tasks, down to their subordinates.
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Design Mix
When the designer of a new product takes into consideration various factors such as – functionality - does it work; aesthetics - does it look good, and economy - can it be made and sold at a profit?
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Elastic Demand
When a given percentage change in price (eg 5%) leads to a larger percentage change in quantity demanded (eg 15%).
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Empowerment
Giving your staff the power to make decisions, or plan their work schedule – without checking every small detail with their line managers
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Environmental Factors
Those issues to do with protecting our planet, that a firm may well consider before making decisions eg possible pollution caused by their factory.
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Ethical Trading
Buying and or selling in a fair and moral manner
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Extension Strategies
Actions taken by a firm to revive sales of a product that is in the decline stage of its product life cycle, with falling sales.
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External Recruitment
Choosing someone from outside the firm, rather than promoting an insider to a vacant job position.
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Financial incentives
Ways of motivating workers through cash rewards, eg Piecework, Performance Related Pay, Bonuses.
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Fixed assets
Things owned by a firm and used over a long period to help produce the service or goods they sell. Eg Factory machinery, ovens in a restaurant, an Ethiopian Airlines Boeing 777.
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Flat / Tall organisations
Firms with many layers in their structural hierarchy. Thus the Chain of Command is long.
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Flexible workforce
A). When managers can increase/decrease numbers of staff easily as many are not “permanent”. b). Workforces are multi skilled so can be swopped around to different work tasks
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Food Miles Labelling
Putting a label on food in shops to show how far it has travelled from producer.
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Herzberg
Invented the Two Factor Theory of Motivation – Hygiene Factors and Motivators.
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Historical figures
Statistics from past years eg for revenue; used to compose budgets
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Internal recruitment
Promoting an insider into a vacant post.
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Job enrichment
Giving a worker higher level tasks to do, often with appropriate training
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Job rotation
Moving workers round to different tasks of same level to avoid boredom.
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Just in Time
Stock control system where components or raw materials are not stocked in large quantities but delivered by suppliers “just in time” to be used.
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Inelastic Demand
When a given % price change (eg 10%) causes a smaller percentage change in quantity demanded (eg 2%)
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Kaizen
Continuous improvement, often using workers suggestions
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Labour intensive
Production method which needs a lot of labour and less capital or machinery – eg Shoe making.
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Labour Turnover
Percentage of staff who leave in a given year
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Lean Management
Production or stock control methods that minimise waste e.g. Just in time; Cell Production.
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Legislation
Laws that effect how a business behaves.
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Maslow
Inventor of Hierarchy of Needs motivation theory.
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Mass marketing
Aiming to sell your production to all consumers.
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Motivation Theories / Theorists
Ideas put forward by writers to motivate workers. (for this syllabus know Taylor, Maslow, Herzberg)
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Niche marketing
Aiming to sell your product only to a small group of consumers
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Online retailing
Selling products direct to customers via websites.
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Patent
Legal document to stop your invention or product being copied by a rival producer.
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Packaging
Using the wrapping or labels on a product to protect it in transit and/or to make it look attractive.
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Performance related pay
Paying staff according to their performancen which is often judged by appraisal
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Piecework
Paying workers according to how much they make
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Profit share
Allocating a small part of profits to staff bonuses to encourage them to work well.
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Price Elasticity of Demand
Measures the % change in quantity demanded , caused by any given percentage change in price.
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Product Life Cycle
Method of analysing your product range or portfolio according to its age.
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Quality Assurance
Making sure of high quality products by building quality checks into the process. Ie. Preventing defects.
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Quality Control
Inspecting products to spot defects at the end of the production process. Ie. Spotting defectS
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Recruitment
The process of finding and appointing new staff
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Redundancy
When a firm can prove a worker is no longer needed or can no longer be afforded.
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Sales forecasts
Estimating the future volume of sales of your product, and thus your future revenue
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Self checking
Teams or individuals checking the quality of their work before passing it on to internal customers or a buyer.
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Service Design
The design of a product that is a service rather than goodS
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New product lead times
Time between a product idea and its launch onto the market
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Span of command
Number of people a manager supervises.
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Staff dismissal
Ending a workers employment, usually for incompetence, gross misconduct or redundancy
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Stock Control System
A method used to ensure there is always sufficient stock
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Tall organisation
A firm with many layers of hierarchy in its structure
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Taylor
A motivation theorist who believed money was the main motivator.
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Teamwork
Organising production processes in teams.
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Total Quality Management (TQM)
A system of instilling a focus on quality in all staff and production systems.
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Trademarks
Usually a name or logo which you register to differentiate your product.
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Training
Programmes of activities designed to give staff more skills
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Variance analysis
Measuring and examining the difference between forecast figures or allocations in a budget and actual figures.
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Voluntary labour turnover
When staff volunteer to leave a firm.
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Zero Budgeting
When a spending budget (eg for materials) is zero, and managers must request and justify each item of spending.
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Other cards in this set

Card 2

Front

All types of promotion apart from main media eg Public Relations, Sponsorship, Special offers, Direct Mail selling.

Back

Below the line promotion

Card 3

Front

Extra salary paid to worker for meeting a target (individual or group)

Back

Preview of the back of card 3

Card 4

Front

Method of analysing your product portfolio by plotting market growth against market size.

Back

Preview of the back of card 4

Card 5

Front

Differentiating your make of a product so that people do not just ask for the product, but your brand of that product.Eg Heinz Tomato Sauce.

Back

Preview of the back of card 5
View more cards

Comments

davidsalter

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This is an excellent set of flash cards which asks for definitions of 35 key terms relating to the whole unit 2 syllabus. They can be used for individually or for joint revision.

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