Unit 1
a decision-making organization established to produce goods and/or provide services
What is a business?
This means the owner(s) of a business (such as a sole trader or partner) is personally liable for any business debts, even if this requires the debts to be settled by selling off personal assets.
What is unlimited liability?
Refers to the business with the largest market share in a given industry.
What is a market leader?
A strategy that involves charging a low price, sometimes even below the cost, so as to damage the sales of rivals.
What is predatory pricing?
Finance that come from within the organization, from its own resources and assets without the help of a third-party provider.
What are internal sources of finance?
A short-term liquidity ratio used to calculate the ability of an organization to meet its short-term debts (within the next twelve months of the balance sheet date).
What is the current ratio?
Land, Labor, Capital and Entreprenurship
What are the factors of production?
A succinct and motivating declaration of an organization’s purpose of existence, who they are, and what they do.
What is a mission statement?
The group of customers that an organization focuses on selling its products to.
What is a target market?
A pricing method that involves a firm charging significantly higher prices than similar or competing products in the market. This is usually due to the prestige or quality associated with the product or brand.
What is premium pricing?
A banking service that enables customers (personal and business customers) to withdraw more money from their account than exists in the account.
What is leasing?
A profitability ratio that measures a firm’s efficiency and profitability in relation to its size (as measured by the value of the organization’s capital employed).
What is return of capital employed (ROCE)?
Human resources, finance, marketing and operations management
What are business functions?
An inspiring declaration of what an organization ultimately strives to be, or to achieve, in the distant future.
What is a vision statement?
involves getting non-numerical responses from research participants in order to understand their behaviour, attitudes, and opinions.
What is qualitiative research?
Marketing theory/tool showing the different stages that most products go through from their research and development (R&D) stage to their final removal from the market.
What is product life cycle (PLC)
finance raised through the issuing of shares via a stock exchange (or stock market).
What is share capital?
A quantitative technique used to predict how cash is likely to flow into and out of the business for a particular period of time.
What is cash flow forecasting?
This legal status of a business enables its shareholders (business owners) not to be liable for more than the original amount of money invested in the business.
What is limited liability?
Growth that is excessive results in inefficiencies and higher average costs of production, perhaps due to problems such as miscommunication, misunderstandings, and poor management of resources.
What is diseconomies of scale?
Form of promotion that refers to any form of paid-for promotional technique through independent consumer media, often mass media.
What is above the line promotion?
The range and mix of products sold by a business, including the various brands of all the products it owns.
What is product portfolio?
set of final accounts shows the value of a firm’s assets, liabilities, and the owners’ investment (or equity) in the business, at a particular point in time.
What is a balance sheet?
Refers to the financial guarantee, using a firm’s fixed assets, for the purpose of securing loan capital.
What is collatoral?
Businesses in this section of the economy are run and owned by the government in order to provide essential services for society as a whole, e.g., education and healthcare services.
What is the public sector?
Also known as organic growth, this takes place when an organization expands without the help of an external partner firm.
What is internal growth?
A pricing method that involves a firm setting low prices so as to gain entry in a new market. The firm will then raise the price once the product or brand has established itself in the industry.
What is penetration pricing?
The use of online content that users can upload and share to a website using a suitable medium platform, e.g., Facebook, Google. Instagram, Twitter, and YouTube.
What is social media marketing?
The money available for the day-to-day running of a business. It is calculated by subtracting current liabilities from current assets.
What is working capital?
The investment appraisal method that considers the time it takes for the amount of money invested in a project to be repaid using the proceeds generated from the investment.
What is the payback period?