Key Vocabulary

• What is the aim in business?

  The intention to reach a goal
• What does air pollution refer to?

  Harmful substances in the air causing damage
• What is an asset?

  Something the business owns with value
• How is the average rate of return calculated?

  Average return per annum divided by initial investment
• What does the Boston matrix analyze?

  The contribution of each product in a portfolio
• What is brand image?

  Consumers' perception of the brand
• What does a break-even chart represent?

  Costs and revenue plotted to show break-even point
• What is break-even output?

  The point where total sales equals total costs
• What is buffer stock?

  A reserve of raw materials for production protection
• What is a business plan?

  A detailed statement of business operations
• What is cash in business terms?

  Money available in cash or at the bank
• What is a cash flow forecast?

  A tool estimating monthly cash inflows and outflows
• What is cash inflow?

  Money received from operations or investments
• What is cash outflow?

  Money paid out for operations or investments
• What does centralisation mean in a business context?

  Control maintained at senior levels of the organisation
• What is the chain of command?

  The hierarchy showing responsibility in an organisation
• What are channels of distribution?

  The route ownership transfers from seller to buyer
• What is a closing balance?

  The amount remaining at the end of an accounting period
• What is commission in a business context?

  Money paid based on a percentage of sales achieved
• What is competition in business?

  The rivalry between businesses in the same market
• What is competitive pricing?

  Setting prices in line with competitors' prices
• What is consumer law?

  Laws ensuring safe and quality products for customers
• What is consumer spending?

  Money spent by households on goods and services
• What are contracts of employment?

  Legal documents outlining job terms and conditions
• What is cost in business terms?

  Money spent on goods and services
• What is cost-plus pricing?

  Setting price higher than production cost for profit
• Who is considered a customer?

  Individuals or organizations purchasing goods/services
• What is customer engagement?

  The relationship focusing on customer requirements
• What is customer loyalty?

  The likelihood of repeat purchases from past customers
• What is customer satisfaction?

  Whether customers are pleased with received goods/services
• What does decentralisation mean in a business context?

  Authority spread widely throughout the organisation
• What is delayering?

  Reorganizing to reduce management levels
• What is delegation?

  Allocating tasks to someone not normally responsible
• What is demand in business terms?

  The quantity of a product bought at a price
• Who are directors in a business?

  People elected by shareholders to run the business
• What are diseconomies of scale?

  Increased unit cost from excessive business growth
• What is disposal of waste?

  The removal or destruction of unwanted material
• What is a dividend?

  A portion of profit paid to shareholders
• What is e-commerce?

  Business transactions carried out electronically
• What are economies of scale?

  Cost advantages of producing on a large scale