Unit 1- Nature of Business Activity
An analytical tool that helps managers to choose and devise various product and market growth strategies
Ansoff's Matrix
The number of people who are directly accountable to a manager.
Span of control
It is when a company reaches a point of production where they are not making any profit or loss
Break-even
The company that has the highest sales revenue of the whole market.
Market leader
Refer to an increase in the average costs of production as a firm grows due to factors beyond its control.
External dis-economies of scale
The official administrative and formal rules of an organisation that govern business activity. It involves prescribed rules and policies, standardised procedures and formal hierarchical structures.
Bureaucracy
An annual financial statement that contains information on the value of an organisation’s assets, liabilities, and the capital invested by the owners.
Balance sheet
The act of distinguishing a business or its products from rivals in the industry.
Differentiation
The growing integration and interdependence of the world's economies, causing consumers around the globe to have increasingly similar habits and tastes.
Globalisation
Culture, attitudes, traits, subordinates, task and time constraints
Factors influencing management and leadership style
Refers to the cash or liquid assets available for the daily running of a business. It shows the funds that are available for a business to pay its immediate costs and expenditure eg raw materials, wages and paying suppliers.
Working capital
Activities designed to discover the opinions, beliefs, preferences of potential and existing customers.
Market research
Tariffs (customs duties), quotas, subsidies, embargo's, technological and safety standards
Protectionist measures that governments can use to safeguard domestic businesses from foreign competitors
Non-physical fixed assets that have the ability to earn revenue for a business, eg, brand names, goodwill, trademarks, copyright and patents.
Intangible assets
This refers to organisations being able to take advantage of another channel of distribution as well as another source of revenue, greater flexibility for organisations to be able to respond more quickly to competitors, reduced packaging, fewer overheads, reduced overheads and increased choice and convenience for customers.
The benefits of e-commerce
Communication problems, added complexities, compliance costs, disclosure of information, bureaucracy and loss of control.
The disadvantages of being a public limited company
Job enrichment, job enlargement, job enlargement, empowerment, purpose, the opportunity to make a difference and teamwork.
Non financial motivators
It is the sales revenue minus the cost of good sold
Gross profit
involves temporarily reducing price in an attempt to force rivals out of the industry as they cannot compete profitably. The strategy often stems from a price war, whereby firms compete by a series of intensive price cuts.
Predatory pricing or destroyer pricing