1. Business Revision Sections 1-7 AQA AS AND A2 Key terms
By ROSE

2. Businesses to have sound knowledge on
Sector
Businesses
Supermarkets
Lidl, Sainsbury’s, Tesco, Waitrose, M&S, Wholefoods
Retail
Primark, New Look, Zara, H&M, Jack Wills, Superdry
Consoles
Nintendo, PlayStation, Xbox
Social Media
Facebook, Bebo, Twitter, Tumblr, Snapchat
Mobile Phones
Apple, Samsung, Microsoft, HTC, Blackberry
E-Commerce
Amazon, eBay, ASOS
Automotive
Honda, Toyota, Aston Matin, McLaren, Ford, GM
Sports and Leisure
Nike, Adidas, Puma, Fitness First, Arsenal FC, Luton Town FC, Manchester United FC
Toys
Moshi Monsters, Barbie, Lego
Airlines
easyJet, Ryanair, Flybe,BA, Eithad, Emirates
Food Retail
Subway, McDonald’s, KFC, Pizza Hut, Pizza Express
Confectionary
Cadbury, Mars Nestlé, Lindt

3. Key terms: A Asset: Anything a business owns
Adding Value: The process of creating value by transforming the inputs into business activity so that the value of what is created is greater than the costs involved.
Authoritarian (or autocratic): The leader makes decisions on their own. They identify the objectives of the business or department and say exactly how they’re going to be achieved.

4. Key terms: B
Balance Sheet: A snapshot of a firm’s finances at a particular time.
Barrier to Entry: An obstacle that makes it harder for companies to enter the market.
Benchmarking: Identifying how to improve your business by comparing its performance, products and processes against those of another firm.
Breakeven Analysis: Identifies the point where a companies total revenues equal its total costs.
Budget: Forecasts future earnings and future spending.
Blake Mouton Grid: Assesses managers based on how much they care about their employees and how much they care about production.

5. Key Terms: C
Capacity Utilisation: How much of its maximum capacity a business is using.
Capital: A company’s wealth in the form of money or other assets.
Capital Expenditure: Money used to buy fixed assets (also called Fixed Capital).
Carroll’s Pyramid of CSR: This is a diagram showing four elements of CSR as layers in a pyramid.
Cash flow: Money that moves in and out of a business over a set period of time.
Centralisation: A way to structure a business where all decisions come from few key people.
Channel of Distribution: The route a product takes from the producer to the consumer.
Competitive Advantage: The way that a company offers customers better value than competitors do – generally either lower prices or more product features.
Confidence Interval: A range in which you can say, with a certain level of confidence, that a value lies.
Consumer Price Index: This measure changes in prices of a sample of consumer goods and services. It measures inflation.
Contingency Plan: A plan preparing for an event that’s unlikely to happen, just in case it does.
Contribution: The difference between the selling price and the variable costs of a product.
Core competence: A unique feature of a business that gives it a competitive advantage, and is hard to be replicated.
Corporate Objective: A goal of a business as a whole.
Corporate Social Responsibility: A company’s contribution to society.
Correlation: The relationship between two variables.
Cost-Push Inflation: When rising costs push up prices.
Creditor: Someone who the business owes money to.
Current Ratio: A liquidity ratio that compares current assets to current liabilities.

6. Key Terms: D
Debt Capital: The capital raised by borrowing (also called loan capital).
Debtor: Someone who owes money to a business.
Decentralisation: A way to structure a business where decisions are shared across the company.
Delayering: Reducing the number of levels in the hierarchy of an organisation.
Demand-Pull Inflation: When a rise in disposable income means there’s too much demand for too few goods, leading to businesses increasing prices.
Demographic Change: A change in the structure of the population.
Deprecation: Loss of value over time – fixed assets often depreciate.
Developed Country: A relatively rich country with high GDP.
Developing Country: A relatively poor country with a low GDP.
Democratic: The leader encourages the workforce to participate in the decision-making process. Leaders discuss issues and delegate responsibilities and listen to advise.
Director: A person responsible for the running of a country.
Discrimination: When one group of people is unfairly treated differently to others.
Diversification: Selling new products to new markets.
Divorce Between Ownership and Control: When the owners of a company no longer have total control.

7. kEY TERMS: e Embargo: A ban on trade with particular countries.
Economic Growth: The rate of increase in GDP.
Economies of Scale: When the cost of producing each item decreases as the scale of production increases.
Economies of Scope: When a single company can make two or more products more cheaply than they can be made by separate companies.
Elasticity of Demand: Shows the relationship between changes in demand for a product and the change in another variable (such as price or income).
Elkington’s Triple Bottom Line: A model that assesses performance by considering three overlapping areas: profit, people and planet.
Embargo: A ban on trade with particular countries.
Emergent Strategy: A form of strategy that develops over time, based on experience and changes in the environment.
Emerging Economy: A developing country with a fast growing, but not yet fully developed economy.
Employment Tribunal: A type of court which hears disputes between employers and employees.
Enterprise: A process whereby business opportunities are identified and exploited for commercial gain.
Ethical: Morally and professionally acceptable.
Exchange Rate: The value of one currency against another.
Expected Value: The financial value of an outcome calculated by multiplying the estimated financial effect by its probability.
External Environment: Features of the business environment that are outside the control of the business.

8. Key Terms: F
Fiscal Policy: The government’s method of adjusting tax rates and spending to control the economy.
Fixed Assets: An asset that a business keeps long-term or uses repeatedly.
Fixed Costs: A cost that stays the same – No matter much or how little a firm produces.
Flat Structure: An organisational structure that has few layers of management.
Forecasting: Trying to predict what will happen in the future.
Franchising: An agreement which allows one business to use the name, knowledge and processes of an established business.
Functional Objective: An objective of an individual department or business function.
Flotation: The admission of the shares of a public company to a stock exchange and subsequent trading of those shares.

9. kEY TERMS: g
Gearing: The proportion of a business financed through debt rather than equity or reserves.
Globalisation: The increase in how interconnected the world is.
Gross Domestic Product (GDP): The total market value of goods and services produced within a nation over a period of time (usually a year).

10. Key Terms: I
Income Statement: Statement showing how much money’s gone into and out of a company over a period of time.
Inflation: An increase in the price of goods and services.
Infrastructure: The basic facilities such as roads, railways, power lines, water pipes and communication networks that allow society to function.
Innovation: Coming up with new ideas, processes and products.
Insolvent: Unable to pay debts.
Interest Rates: The fee paid for borrowing.
Inventory: A business’ entire stock.
Inventory Turnover Ratio: How many times a year a business sells and replaces all its stock.
Intangible: A product that cannot be seen or touched.

11. Key Terms: J
Just In Time (JIT) Production: Manufacturing process that operates with very small amounts of stock.

12. Key Terms: K
Kaizen: A lean production method that involves encouraging everyone to constantly improve quality.
Kaplan and Norton’s Balanced Scorecard model: A model that assesses performance using four different perspectives: financial, internal business process, learning and growth, and customers.

13. Key Terms: L
Labour Retention: The proportion of staff that stay at a company for a given period.
Labour Turnover: The proportion of staff that leave a company in a given period.
Limited Liability: Where shareholders in a company are only liable for the amount they have invested in the share capital.
Liability: A debt a business owes.
Liquidity Ratio: A ratio that shows whether a business has enough liquid assets (eg money) to pay its short term liabilities.
Living Wage: The amount of money thought to be enough to allow an acceptable standard of livng.
Leadership Styles: The manner and approach of providing direction, implementing plans, and motivating people.
Laissez Faire: Offer employees coaching and support, but they rarely interfere in the running of the business. This approach lets the workers make all decisions.

14. Key Terms: M
Market Development (or Extension): Selling existing products to new markets.
Management: Management is the art of getting things done through people.
Market Capitalisation: The total market value of the issued share capital of a company based on its share price.
Marketing Mix: The seven P’s firms use to market their products – the four traditional Ps (Price, Product, Promotion, Place) and the three extra Ps (People, Physical Environment, Process).
Market Penetration: Trying to increase market share in your existing market.
Market Share: The percentage of sales in a market made by one firm or brand.
Mass Customisation: This combines aspects of bespoke production with the low costs of mass production.
Merger: Where two companies agree to join together in one business.
Migration: The movement of people from one place to another.
Minimum Wage: The lowest amount that someone can legally be paid.
Monetary Policy: The governments method of controlling inflation, exchange rates and the economy by adjusting interest rates.
Monopoly: When one business has complete control over the market. Lack of competition can lead to high prices and low quality.
Monopolistic Competition: An industry with many firms, easy to enter, but differentiated.
Multinational: A business with its headquarters in one country and bases in other countries.

15. Key Terms: N
Net Realisable Value: The amount a company could get by selling its stock in its current state.
Net Gain: The value being gained from taking a decision calculated by adding together the expected value of each outcome and deducting the cost associated with the decision.
New Product Development: Selling new products to existing markets.

16. Key Terms: O Objective: A medium-long term target.
Offshoring: When a firm has one or several of its activities carried out abroad.
Opportunity Cost: The idea that money or time spent doing one thing means missing out on doing something else.
Organisational Culture: The way things are done within a business, in relation to expectations, attitudes and how the staff make decisions.
Organisational Design: The structure or hierarchy of a company.
Outsourcing: When a firm has one or several of its activities carried out by another specialist business.
Oligopoly: Industry with competition between relatively few businesses.

17. Key Terms: P Payable: Money that a business owes.
Partnership: When two or people own a business.
Paternalistic: The leader consults the workers before making a decision, then explains the decisions to them to persuade them that the decisions are in their interest.
Payables Days Ratio: The number of days it takes a firm to pay for goods bought on credit.
Planned Strategy: A form of strategy that involves all strategic planning being done before it is implemented.
Porter’s Five Forces Model: A framework for analysing competition within an industry and judging how attractive the market is.
Primary Sector: Extraction of natural resources.
Privatisation: When state-owned firms are sold to private companies.
Product: A good or service.
Productivity: The output per worker in a given time period.
Profit: The difference between total revenue and total costs.
Protected Characteristic: The Equality Act (2010) makes it illegal to discriminate against people based on a protected characteristic, such as, age, disability, pregnancy or religion.
Protectionist Policy: A policy designed to protect domestic businesses from foreign competition (eg by using subsidies, tariffs, or quotas).
Private Limited Company: A company that sells shares privately to friends and family and has its own legal identity.
Public Limited Company: A limited company that can sell shares on the stock market.
Perfect Competition: Many firms that are identical.

18. Key Terms: Q
Quota: A limit on the quantity of a product that can be imported or produced.
Quaternary: Providing information & ICT.

19. Key Terms: r
Re-Shoring: When a firm brings activities back to the country it is based in.
Receivable: Money owed to a business.
Receivables Days Ratio: The number of days a business has to wait to be paid for goods it supplies on credit.
Recession: A temporary decline in a countries economic activity.
Regional Structure: A way of organising a business based on geographical location.
Regulation: Government rules that apply to all firms in a particular industry.
Retrenchment: When a business decreases in size.
Return on Capital Employed (ROCE): Shows you how much money is made by the business compared to how much money’s been put into the business.
Return on Investment (ROI): A calculation of how efficient an investment is.
Revenue: The value of sales (also called sales or turnover).

20. Key Terms: s
Sanction: A restriction on trade with a particular country.
Secondary Sector: Production of finished components and goods.
Shareholder: A person that owns a share of a company.
Single Market: The countries in a single market have few trade barriers between them. This means goods and labour can move freely within a single market.
Sole Trader: A self-employed individual who trades under his or her own name, or under a suitable trading name.
Stakeholder: Anyone with an interest in a business, including workers, shareholders and customers.
Stakeholder Mapping: A grid which compares a stakeholders level of interest and their power so businesses can assess who they need to satisfy more.
Strategic Drift: When a business’ strategy doesn’t adapt to changes in the environment.
Strategy: A medium to long-term plan for achieving a business’ objectives.
SWOT Analysis: A method of assessing a business’ current situation – it looks at the strengths, weaknesses, opportunities and threats facing the business.

21. Key Terms: t Tactics: Short term plans for implementing strategy.
Takeover: Where one firm buys over 50% of the shares of another firm, giving them a controlling interest.
Tannenbaum Schmidt Continuum: Places leaders on a scale ranging from autocratic management through increasing levels of participation in decision-making by the work force.
Tall Structure: An organisational structure that has many layers of management, with a strict hierarchy.
Tariff: A tax on imports or exports that is put in place to restrict trade.
Total Equity: The total money that’s been put into a business by shareholders.
Trade Bloc: A group of countries with few trade barriers between them.
Trade Union: A group that acts oh behalf of a group of employees in negotiations with employers.
Tertiary Sector: Providing services to consumers and businesses.

22. Key Terms: u
Urbanisation: An increase in the proportion of a population that lives in towns and cities.
Unlimited Liability: Where the owners of the business are legally inseparable from the business they run, making them liable for the debts of the business.

23. Key Terms: v
Variable Cost: A cost that varies, depending on how much business a firm does.

24. Key Terms: w
Wage-Price Spiral: A cycle in which wage increases cause price increases, which then cause further wage increases, and so on.
Working Capital: Money available for day-to-day spending.
World Trade Organisation (WTO): An international organisation which encourages trade between member countries. It deals with trade rules and negotiations.

25. Business models SECTIONS 1-7 AS AND A2
By rose

26. Tannenbaum Schmidt continuum: section 2

27. Blake Mouton: Section 2

28. Stakeholder mapping section 2

29. Scientific Decision making: section 2

30. Decision trees: section 2

31. Market mapping: section 3

32. STP: SECTION 3

33. mARKETING MIX: sECTION 3

34. Inventory control chart: section 4

35. Herzberg’s TWO FACTOR THEORY: seCTION 6

36. Taylor’s scientific management: section 6

37. Maslow’s hierarchy of needs: section 6

38. Hackman and oldham: section 6

39. Porter’s five forces: section 7

40. Carroll’s pyramid of csr: section 7

41. Elkington’s triple bottom line: section 7

42. Balanced scorecard: section 7