front 1 Business objectives | back 1 They are measurable targets set by the business, such as sales or profits that have to be achieved within a given time period. |
front 2 Factors of production / Resources | back 2 They are the inputs used to produce goods and services; namely land, labour, capital and enterprise. |
front 3 Transformation process | back 3 It involves converting inputs into outputs, which means converting the raw materials into goods and services. E.g. Taking wood from the trees and converting it to furniture. |
front 4 Primary sector | back 4 It is the first stage of production and includes extracting or growing natural resources which are then used by other firms. Farming, mining and fishing are all part of it. |
front 5 Secondary sector | back 5 Firms that manufacture goods by processing the natural resources. This includes factories manufacturing computers, brewing beverages, baking, clothes-making and construction. |
front 6 Tertiary sector | back 6 Firms that provide services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism and telecommunications. It also includes selling the goods to the final consumer such as shops. |
front 7 Quaternary sector | back 7 It is a subset of the tertiary sector which includes firms that are involved in the research and development process and are knowledge based. Universities, School and Technology based companies are a part of it. |
front 8 Added value | back 8 It is the difference between the selling price of the product and cost of producing the product. |
front 9 Adding value | back 9 It is the process of increasing the difference between the selling price of the product and the cost of producing the product. This is done either by increasing the selling price or decreasing the cost of production. |
front 10 Brand / Brand name | back 10 It is a name, design, logo, symbol that makes a product recognisable and distinguishes it from the competitors in the eyes of the customer. |
front 11 Market forces | back 11 They are the forces of supply and demand which determine the price of a product and the quantity bought and sold in a market. |
front 12 Scarcity / Economic Problem | back 12 It refers to the limited resources available in comparison to the unlimited wants of consumers. |
front 13 Opportunity cost | back 13 It measures the benefit lost (forgone) by not consuming or producing the next best alternative. Next best alternative sacrificed (forgone). |
front 14 Enterprise | back 14 It is the risk taking ability to start a new business and take important decisions. It is also the skill needed to make a new idea work. |
front 15 Entrepreneurs | back 15 They are individuals who take the risk to create or start a new business or project. |
front 16 Intrapreneurs | back 16 They are people within an established business who think and act like entrepreneurs. They have all the skills and knowledge of an entrepreneur but they don’t have the ability to take risks. |
front 17 Business plan | back 17 It is a written document that provides the details of the business objectives that a firm is expecting to achieve in the near future. This document also includes product details, marketing plan, industrial research, financial forecast and other important budgeted information. |
front 18 Nationalisation | back 18 occurs when a government takes ownership of a business from the private sector into the public sector. |
front 19 Privatisation | back 19 occurs when a government transfers ownership of a business from the public sector to the private sector. |
front 20 Merit goods | back 20 are goods or services, such as education and health, whose benefits individuals may not fully appreciate. These are goods and services that benefit the society hence it has substantial external benefits. |
front 21 Demerit goods | back 21 are goods or services such as cigarettes and alcohol, which harms the society and the individuals do not understand the harm fully. These are goods and services that harm the society hence it has substantial external costs. |
front 22 Limited liability | back 22 occurs when an individual or groups of individuals are not personally responsible for all the actions of their business. Limited companies have limited liability where shareholders are not personally liable for the company’s loans and their liability is limited to their investment in the company. |
front 23 Unlimited liability | back 23 occurs when an individual or groups of individuals are personally responsible for all the actions of their business. With sole traders, there is no distinction in law between the individuals and the business, and so they could lose their personal assets if the business has financial problems. |
front 24 A company | back 24 is a business organisation which has its own legal identity and which has limited liability. |
front 25 Shareholders | back 25 are persons or organisations that own a part of a company. |
front 26 A franchise | back 26 occurs when a franchisor sells the rights to use or sell their products to a franchisee. |
front 27 A niche | back 27 is a small segment of a market. |
front 28 An objective | back 28 is a target that is measurable and has a given timescale. |
front 29 Labour productivity | back 29 measures the output per time period of an employee. |
front 30 A corporate objective | back 30 is a target set for the business as a whole such as profit maximisation and increasing shareholder value. |
front 31 The market share | back 31 of a business measures its sales as a percentage of the total market sales. |
front 32 Cash flow | back 32 is the movement of cash into and out of a business over a time period. |
front 33 Ethics | back 33 are moral principles that can shape the way a business behaves. |
front 34 Social responsibility | back 34 is a philosophy under which businesses consider the interests of all groups in society as a central part of their decision-making. |
front 35 A mission statement | back 35 It is a statement that sets out the overall purpose of a business and what a business stands for. |
front 36 An aim | back 36 is a long-term goal that determines the objectives that an organisation sets itself. |
front 37 Strategy | back 37 is the long-term plan to achieve the objective of a business. |
front 38 Tactics | back 38 are the short-term actions needed to implement the strategy. |
front 39 A target | back 39 is a goal pursued by a business, such as achieving a particular market share or rate of growth of sales. |
front 40 Budgets | back 40 are financial plans setting out a business’ future revenues and expenditure. |
front 41 Ethical behaviour | back 41 is behaviour that is thought to be morally correct and not necessarily the most profitable. |
front 42 Stakeholders | back 42 are groups or individuals who have an interest in a business. |
front 43 Authority | back 43 is the power or ability to carry through a task or action. |
front 44 Internal stakeholders | back 44 are individuals and groups within a business; for example, employees. |
front 45 External stakeholders | back 45 are groups outside a business; for example, people who live near to the business’ premises. |
front 46 Dividends | back 46 are money that is paid out of profits to shareholders. It is a reward to the owners of the business. |