Unit 2- Business Studies

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What is Economies Of Scale?
When it becomes cheaper for a business to produce their products as they expand in size.
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What is Organic Growth?
By increeasing the sales of the businesses own products. (eg. by opening more branches)
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What is Inorganic Growth?
By increasing sales by joining with another business.
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What is a Merger?
An agreement between two businesses to combine and operate as one company.
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What is a Takeover?
When one business pirchases another businesses from its owners.
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What is Vertical-Backwards Integration?
When a business merges/takes over a company in the same industry but from earlier on in the supplu chain. (eg. cadburys and cocoa beans)
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What is Horizontal Integration?
When a business merges/takes over a company in the same industry and at the same stage of production. (eg. Cadburys and Kraft)
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What is Vertical-Forwards Integration?
When a business merges/takes over a company in the same industry but from later on in the supply chain. (eg. Cadburys and Tesco)
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What is Diversification?
When a business merges/takes over from a completely different industry. (eg, Cadburys and Thomas Cook)
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What is a Monopoly?
When a business establishes a market share of 25% or higher.
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What is a Limited Company?
A business that has gone through the legal process of incorporation.
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What is a Private Limited Company (Ltd)?
A compant ownes by chareholders. Shares in a Ltd cannot be advertised to the general public, only traded privately.
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What is a Public Limited Company (Plc)?
A business owned by shareholders. Shares can be advertised to the general public.
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What is a Dividend?
A payment made to shareholders from the companies profits- usually made annually.
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What is Divorce betweed Ownership and Control?
When the shareholders and managers have different visions and objectives.
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What are Ethical Objectives?
When a business aims to do the right thing according to the values and beliefs of its managers, even if this isnt the most profitable way.
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What are Environmental Objectives?
When a business aims to protect the environment during its operations, reducing social costs of the business.
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What are Social Costs?
The negative costs to society of businesses, such as pollution, noise, conjestion or job losses.
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What are Social Benefits?
The benefits created by businesses for society. Such as creation of jobs of rejuvenation of a run-down society.
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What is Globaliation?
The increasing trend for goods to be traded interantionally and for companies to have locations abroad.
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What is Off-Shoring?
Making products in another country. Services can be off-shored too, such as telephone call centres in India.
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What is Multinational?
A business with operations in more than one country.
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Card 2

Front

By increeasing the sales of the businesses own products. (eg. by opening more branches)

Back

What is Organic Growth?

Card 3

Front

By increasing sales by joining with another business.

Back

Preview of the back of card 3

Card 4

Front

An agreement between two businesses to combine and operate as one company.

Back

Preview of the back of card 4

Card 5

Front

When one business pirchases another businesses from its owners.

Back

Preview of the back of card 5
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