Key Terminology

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Investment Apprasial
Evaluation of the attractivement of a possible investment, calculating whether the potential profits are high enough to justify the initial layout.
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Average Rate of Return
Method of investment apprasial which determines return on investment by totaling the cash flows (over the years for which the money was invested) and dividing that amount by the number of years
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Net Return
- Net income from an investment after deducting all expenses from the gross income generated by the investment.
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Payback
The amount of money a company will receive after a project has been completed over a certain amount of time.
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Net Present Value
The difference between the present value of the future cash flows from an investment and the amount of investment.
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Opportunity Costs
A benefit, profit, or value of something that must be given up to acquire or achieve something else.
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Criterion Level
A yeard stick set by directiors to enable managers to judge whether investment ideas are worth pursuing.
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Cumulative Cash
The build-up of cash over serveral time periods.
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Present Values
The discounting of future case flows to make them comparable to todays cash. this takes into account the oppotunity costs of waiting for the cash to arrive.
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Reward for Risk
Calculating the difference between the forcast average rate of return and the actual rate of interest, to help decide whetherthe average rate of return is high enough given the risks involved in the project.
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Short-Termism
Making decisions on the basis of the immediare future and therefore ignoring the long-term future of the business.
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Tatical Decisions
Are day-today events and therfore do not require a lengthy decision making process.
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Coporate Image
Mental picture that springs up at the mention of a firm's name, it is the public perception of the firm.
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Industrial Relations
Employer-employee relationships that are covered specifically under collective bargaining and industrial relation laws.
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Staff Morale
- Description of the emotions, attitude, satisfaction, and overall outlook of employees during their time in a workplace environment. Part of effective productivity is thought to be directly related to the morale of the staff.
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Productivity
A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.
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Exchange Rates
Price for which the currency of a country can be exchanged for another country's currency.
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Sensitivity Analysis
Evaluation of the overall risk or in identification of critical factors, it attempts to predict alternative outcomes of the same course of action
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Business to Consumer (B2C)
Selling individual products to individual buyers, usually on cash payment basis.
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Business to Business (B2B)
Trading between firms and not between businesses and consumers.
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Mass Market
Un-segmented market in which products with mass appeal are offered to every customer through mass retailers or independent stores, and promoted through mass media.
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Niche Market
Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all.
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Ansoff's matrix
Strategic marketing planning tool that links a firm's marketing strategy with its general strategic direction and presents four alternative growth strategies.
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Market penetration
pushing existing products in their current market segments.
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Market development
developing new markets for the existing products.
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Product development
developing new products for the existing markets.
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Diversification
developing new products for new markets which the business does not yet operate in.
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Positioning Strategy
A marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer
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Competitive Advantage
A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation.
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Costs Leadership
Strategy used by businesses to create a low cost of operation within their niche. The use of this strategy is primarily to gain an advantage over competitors by reducing operation costs below that of others in the same industry
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Cost Advantage
Superiority achieved through factors such as access to cheaper inputs, efficient processes, favorable location, skilled workforce, superior technology, and/or waste reduction or elimination.
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Differentiation
Result of efforts to make a product or brand stand out as a provider of unique value to customers in comparison with its competitors.
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Differentiation Advantage
Unique benefits or characteristics of a firm, product, or program that set it apart and above its competitors in the customers' viewpoint.
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Monopoly
Market situation where one producer controls supply of a good or service, and where the entry of new producers is prevented or highly restricted.
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Organic Growth
Expansion of a firm's operations from its own (internally generated) resources, without resorting to borrowing or acquisition of other firms.
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Other cards in this set

Card 2

Front

Method of investment apprasial which determines return on investment by totaling the cash flows (over the years for which the money was invested) and dividing that amount by the number of years

Back

Average Rate of Return

Card 3

Front

- Net income from an investment after deducting all expenses from the gross income generated by the investment.

Back

Preview of the back of card 3

Card 4

Front

The amount of money a company will receive after a project has been completed over a certain amount of time.

Back

Preview of the back of card 4

Card 5

Front

The difference between the present value of the future cash flows from an investment and the amount of investment.

Back

Preview of the back of card 5
View more cards

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