paper 2

• gross profit

  sales revenue - cost of sales
• gross profit margin

  gross profit / sales revenue x100
• net profit

  gross profit - other expenses
• net profit margin

  net profit / sales revenue x100
• average rate of return

  average annual profit (tot profit/ no. of years ) / cost of investment x100
• market share

  sales made by business / by market x100
• contribution per unit

  selling price per unit - variable cost per unit
• job production

  individual and one item at a time as its personalised

  high profit but also require highly skilled staff
• batch production

  set quantity of the same product

  variety but its costly as its not fully automated
• flow production

  automated process of making the same product

  large quantities but some customers may prefer personalized products more
• what is lead time?

  the difference in order and receive
• what is buffer stock?

  difference in minimum and maximum
• quality control

  at the end
• quality assurance

  during production which can be time consuming
• sales process

  customer interest

  speed and efficiency of service

  customer engagement

  post-sales service

  customer loyalty
• delocalised and central decision-making

  anyone's choice and only the head's choice
• renumeration

  pay
• autonomy

  independence
• procurement

  how a business gets its raw products so suppliers
• merger

  co-exist as one
• takeover

  one buys the other business
• internal growth

  targeting new markets and developing new products
• internal sources of finance

  retained profit and fixed assets (selling them)
• external sources of finance

  loan capital and share capital
• loan capital

  take out loans and pay back in a certain amount of time, if not they can take your assets
• Share capital

  selling shares in the business, which don't need to be repaid but you may lose control over the business
• public limited comapanies

  shares can be publically sold to bring in extra finance especially if they're high in demand

  + Have limited liability

  _ accounts are made public
• tariffs

  taxes imposed on imports and exports
• trade blocs

  group of countries that have few or no trade barriers between them
• product life cycle

  research and development

  introduction

  growth

  maturity

  decline
• development and introduction

  money on promotion and research
• growth and maturity

  pay back their investments and make a profit
• extension strategies

  product differentiation

  reduce price

  rebranding

  repositioning

  increased marketing
• promotion methods

  advertise, sponsorships, product trials, branding and special offers
• promotional strategies

  inform, persuade and remind
• price penetration

  low prices which rise as the business establishes itself in the market
• price skimming

  high cost due to high demand this works for established brands
• competitive pricing

  similar prices to competitors
• hierarchical structures

  Long chains of command with more layers of management, makes communication difficult and slow, and each manager has a narrow span of control which makes it effective
• flat structures

  short chain of command meaning messages are passed along very fast, to each manager has a wide span of control which can be difficult