Business Key Terms

Business Activity

Business activity: The process of producing goods and services to satisfy customer needs and wants.

Primary sector: The part of the economy that involves extracting natural resources.
Secondary sector: The part of the economy that involves manufacturing and construction.
Tertiary sector: The part of the economy that provides services.
De-industrialization: The decline in manufacturing and a shift towards the service sector.

Business plan: A document that outlines a company’s objectives and how it aims to achieve them.
Entrepreneur: An individual who takes risks to start and manage a business.

Stakeholders: Individuals or groups affected by a business’s decisions, such as employees, customers, and shareholders.

Human Resources and Motivation

Recruitment: The process of attracting and selecting candidates for a job.
Selection: The process of choosing the most suitable candidate for a job.
Training: The process of improving employees' skills and knowledge.
Motivation: Factors that encourage employees to work effectively.
Financial motivation: Financial incentives such as wages and bonuses.
Non-financial motivation: Non-financial incentives such as career development and recognition.

Marketing and Market Research

Market research: The process of gathering and analysing information about consumers and competitors.
Market segmentation: Dividing customers into groups based on characteristics like age or income.
Target market: The group of customers a business aims to serve.

Marketing mix (4 Ps): The combination of product, price, place, and promotion used to market a product.
Product: The goods or services offered by a business.
Price: The amount charged for a product.
Place: The method used to distribute products to consumers.
Promotion: The activities used to advertise and attract customers.

Product life cycle: The stages a product goes through from introduction to decline.
Branding: The process of creating a unique identity for a product.
Penetration pricing: A pricing strategy where a low initial price is set to attract customers.
Price skimming: A pricing strategy where a high initial price is set for new or innovative products.
Distribution channels: The methods businesses use to deliver goods to consumers.

Finance and Costs

Revenue: The total income from sales.
Costs: The expenses incurred in running a business.
Profit: The difference between revenue and costs.
Break-even point: The level of output where total revenue equals total costs.
Cash flow: The movement of money in and out of a business.
Liquidity: The ability of a business to meet short-term debts.

Internal sources of finance: Finance obtained from within the business, such as retained profit.
External sources of finance: Finance obtained from outside the business, such as bank loans.

Production and Operations

Job production: A production method where individual, custom products are made.
Batch production: A production method where a set number of identical products are made at a time.
Flow production: A continuous production method where goods are mass-produced on an assembly line.
Lean production: A production method that minimizes waste while maintaining efficiency.
Just-in-time (JIT): A stock control system where materials are ordered only when needed to reduce costs.
Quality control: The process of ensuring that products meet required standards before being sold.