Higher Business Management (Full Course)

Business
Any organisation working towards a set of objectives
Goods
Things we can see and touch
Durable Goods
Things we can use again and again
Non-durable goods
Things we can use only once
Service
A thing that is done for us
Wants
Non-essential things we would like to have
Needs
Essential things for survival
Land
An economic term meaning natural resources which businesses use
Labour
An economic term meaning the workforce of a business
Capital
An economic term meaning factories, machines, vehicles, tools etc that a business owns or controls
Enterprise
This is the business ideas that an entrepreneur or owner has on how to use land, labour and capital in their business
Entrepreneur
The person who develops a business idea and combines the factors of production (land, labour, capital and enterprise). They take the risk of losing their initial investment if the business idea fails.
Factors of Production
Land, Labour, Capital and Enterprise
Cycle of Business
The constant process of producing goods and services
Primary Sector
Businesses involved in extracting natural resources
Secondary Sector
Businesses involved in manufacturing & construction
Tertiary Sector
Businesses involved in providing services
De-industrialisation
The process of manufacturing decline
Sole Trader
a business owned by a single person
Partnership
a business owned by two or more people
Public Limited Company
a buisness witth limited liabilty whose shares are availible to the general public to buy on the stock market
Private Limited Company
a company whose shares are not bought and sold on the stock market and can only pass to another person with the agreement of other shareholders
Franchise
the right to use a specific business’s name and sell its products or services in a given territory.
Public Corporation
An organisation created by an Act of Parliament
Charity
An organisation created to promote good causes
Private Sector
The part of the economy owned by individuals and businesses
Public Sector
The part of the economy owned by the government
Voluntary Sector
Organistions set up to rise money for good causes, or to provide facilities for their members
Deed of Partnership
Contract drawn up between owners
Memorandum of Association
Document that regulates a firm’s external activities and must be drawn up on the formation of a plc
Partnership Agreement
A written agreement among all owners
Limited Liability
The responsibility of a business’s owners for losses only up to the amount they invest; limited partners and shareholders have limited liability
Unlimited Liability
The owner is personally and fully responsible for all losses and debts of the business
Royalty
Payment to the holder of a patent or copyright or resource for the right to use their property
Shareholder
A person who invests in a corporation by buying stock and is a partial owner
Stakeholder
Someone with a key interest in an organisation
Manager
Person appointed to supervise and control resources and expenditures
Employee
A worker who is hired to perform a job
Government
The institution through which a society makes and enforces its public policies
Local Community
People who live in an area
Customer
Someone who pays for goods or services
Consumer
A person who uses goods or services
Ordinary Shares
Stock whose holders are given a vote
Preference Shares
Stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights
Share Issue
Act of introducing more shares onto the market
Debenture
Bond issued to secure a loan
Hire Purchase
The buying of equipment by paying in instalments, usually including interest.
Divestment
Allows an organisation to sell off minor areas of their business and concentrate on the core activities of the organisation
Loan
The temporary provision of money (usually at interest)
Mortgage
A long-term loan extended to someone who buys property
Multinational
A corporation that has manufacturing or service operations in a number of different countries
Globalisation
Causing distinctively American norms and values to spread throughout the world
Dividend
That part of the earnings of a corporation that is distributed to its shareholders
Legislation
A law passed by a governing body
PESTLEC
Political, Economic, Social, Technological, Legislation, Environmental, Competitive
Share Price
The value of all the assets (stocks) divided by the number of shares
Stock Exchange
A market for buying and selling stock
Corporation Tax
The tax which private and public limited companies must pay on their profits.
VAT
A tax levied on the difference between a commodity’s price before taxes and its cost of production. It is currently 20%.
Income Tax
A tax on people’s earnings
AGM
Event where shareholders meet to discuss important decisions
Diversification
When organisations in completely different industries combine together.
Vertical Integration
Organisations at a different stage in the same industry combine together, for example, an oil refinery integrating with a petrol station
Horizontal Integration
When organisations produce the same type of product or provide the same type of service combine together, for example, Halifax and Bank of Scotland = HBOS
Local Authority
An administrative unit of local government
Profit Maximisation
The aim to make as much profit as possible
Survival
A strategy to remain in existence
Turnover
The volume of sales measured in pounds
Growth
A process of becoming larger or more numerous
Social Responsibility
The obligation of organisation management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization.
Risk
When you are exposed to the chance of loss or damage
Suppliers
Companies that provide material, human, financial, and informational resources to other companies
Tax Payers
People who pay a % of their earnings to the Government
Investors
A person or group who puts money into a business
Donor
Person who makes a gift of property
Bank
A financial institution that accepts deposits and channels the money into lending activities
Grant
A gift of money to be used for a special purpose
Business Gateway
Advisory agency to assist small businesses
Trade Fair
An event at which many different companies show and sell their products
European Union
An international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members
Inland Revenue
A board of the British government that administers and collects major direct taxes
Merger
The combination of two or more commercial companies
Takeover
One investor group buys enough stock in a corporation to gain control of the other corporation
Demerger
When organisations cut back and concentrate on only their core activites.
Management buy-out
A form of acquisition where a company’s existing managers acquire a large part or all of the company.
Unemployment
The total number of people out of work, but wanting to work
Interest Rate
The percentage of a sum of money charged for its use
Exchange Rate
The charge for exchanging currency of one country for currency of another
Greenpeace
An international organization that works for environmental conservation and the preservation of endangered species
Environment
All of the surrounding things, conditions, and influences affecting the growth or development of living things.
Alan Sugar
Owner of Amstrad
Donald Trump
American property billionaire
Richard Branson
Head of Virgin Group
Michelle Mone
Owner of Ultimo Bras
Anita Roddick
Founder of the Body Shop
Recession
the state of the economy declines
Bill Gates
founder of microsoft
Steve Jobs
co-founder of Apple
Sergy Brin & Lawrence Page
Founders of Google
Dragons Den
TV show where inventors pitch ideas for cash
Peter Jones
English dragon made his fortune in telecoms
Duncan Bannantyne
Scottish dragon, owner of gymns and bars
Wall Street
area in lower Manhattan where the New York Stock Exchange is located
Backward Vertical Integration
When a business takes over a supplier.
Forward Vertical Integration
When a business takes over a customer.
Divestment
When a business sells off assets or subsidiary companies to raise finance for growth.
Outsourcing
This involves one firm hiring another to supply parts or to do a job instead of the firm doing it themselves.
Mission statement
a short, specific written statement of the reason a business exists and what it wants to achieve
Strategic decision
a long term decision made by senior managers, concerned with the overall aims and direction of the business, eg selling a new product
Tactical decision
a decision made by middle management, usually medium term which supports strategic decision, eg deciding which advertising agency to use to promote a new product
Operational decision
a decision that concerns the day-to-day activities of an organisation
Internal constraints
the factors that hinder decision-making but are within the control of the business, eg finance
External constraints
the barriers that hinder decision-making but are uncontrollable by the business, eg PESTEC factors
Role of manager
making decisions to achieve organisation’s objectives using available resources
Interpersonal role
the manager’s responsibility for leading and motivating others
Informational role
the manager’s responsibility for gathering information from and disseminating information to the stakeholders of the organisation
Decisional role
the manager’s responsibility for processing information and reaching conclusions
Planning
setting a plan of action for the future
Organising
gathering and arranging resources to meet plans
Commanding
ensuring duties are done properly by informing staff what to do
Coordinating
having staff and resources organised to achieve the plan
Controlling
making sure everything works according to the plan ie evaluating
Delegating
assigning tasks and responsibilities to subordinates
Motivating
influencing people to accomplish specific objectives, consisting of 4 components: leadership, group dynamics, communication, and organisational change
POGADSCIE
the 9 steps in a stuctured decision making process
SWOT analysis
a planning tool used for identifying internal strengths and weaknesses and examining external opportunities and threats
PESTEC factors
political, economic, social, technological, environmental and competitive influences on an organisation
Quality decision
depends on manager’s capability of making good decisions and quality and quantity of information available
Strengths
internal areas or activities in which the organisation performs well
Weaknesses
internal areas or activities in which the organisation performs poorly
Opportunities
external areas or activities that the organisation could profitably be involved with in the future
Threats
external areas or activities that could adversely affect the organisation’s objectives in the future
Delegation
The passing of authority to perform a role or set of tasks to someone lower down in the hierarchy of the company. The responsibility remains with the person passing authority, but the work is carried out by the person further down the chain of command.
Span of control
The number of subordinates that are controlled by a manager, i.e. the number of people who are directly accountable to a manager
Levels of hierarchy
The organisational structure based on a ranking system
Flat
Firms who have fewer levels in their organisational hierarchy. This will usually mean that they have a higher span of control.
Tall organizations
Firms who have more levels in their organisational hierarchy. This will usually mean that they have a lower span of control.
Chain of command
A formal line of authority through which order are passed down in an organisation.
Authority
The power over others by sanctioned personnel within an organisation.
Responsibility
Refers to who is in charge of whom, such as the marketing Manager of an organisation being responsible for the team of marketers.
Empowerment
Granting workers the authority to be in charge of their own jobs, to make decisions and to execute their own ideas.
Delayering
This involves reducing staff levels by cutting out levels of management to flatten the structure.
Downsizing
This involves removing certain areas of the organisation’s activities by closing factories or merging divisions together.
Centralised
When the vast majority of decision-making is done by a very small number of people, usually the senior management team, who hold on to decision-making authority and responsibility.
Decentralised
When some decision-making authority and responsibility is passed on to others in the organization.
Accountability
The extent to which a person is held responsible for the success or failure of a task.
Functional Grouping
Departments where staff have similar skills and expertise and do similar jobs.
Product/Service Grouping
Divisions or departments where each deals with a different product or product range, for example, the Arcadia group with Burton, Top Shop, Debenhams etc.
Customer Grouping
Divisions deal with different customers, for, example, banks have different people to deal with personal customers and business customers.
Place/Geographical Grouping
Staff are divided into divisions, each dealing with a different geographical area.
Entrepreneurial Structure
Decisions are made by a few people at the core of an organisation.
Matrix Structure
This is often used when a team is needed to complete a specific task and team members come from different functional areas.
Line Relationship
This exists between a manager and his/her subordinates.
Lateral Relationship
This exists between staff on the same horizontal level of an organisation.
Corporate Culture
The values, beliefs and norms relating to the company or organisation that are shared by all its staff.
Informal Relationships
These are developed between staff at breaks, during work and when socialising.
Internal Organisation
The way in which an organisation may group its staff and work.
Organisation Chart
This shows the formal structure of an organisation.
Characteristics of high quality information
Timely – information must be available when needed and be up-to-date
Objective – should be free from bias
Accurate – the information must be correct
Appropriate – the information should be for the purpose required
Available – should be easily obtained
Complete – nothing should be missing
Concise – should be short and to the point
Cost effective – value gained from information must be greater than the cost of obtaining it
Quantitative Information
Information that can be measured and which is normally expressed in numerical form.
Qualitative Information
Information that is expressed in words and is descriptive. It involves judgements or opinions.
Data
A collection of facts or quantities that has been assembled in some formal manner with the objective of processing it into specific information.
Information
Data that has been processed into a form that assists in decision-making and planning.
Primary Information
Information which has been collected first hand by an organisation for their own, specific purpose. Usually this is by observation, interview or questionnaire.
Advantages of primary information
It should be correct for the purpose for which it was gathered because it was gained first hand
Likely to be up-to-date
Source of information is known
Disadvantages of primary information
Research costs may be high
Respondents may have lied
May be difficult and time consuming to collect
May have researcher bias
Secondary Information
Information which has been gathered for one purpose then used for another. It is gathered from published sources such as newspapers, textbooks and the Internet.
Advantages of secondary information
Can be inexpensive and esay to access
A wide variety of sources is available
Disadvantages of secondary information
It may not be relevant as it was collected for one purpose and used for another
May have author bias
May be out of date
Is also available to competitors
Internal Information
Information which has been taken from the organisation’s internal records, for example, financial records.
External Information
Information which is gathered from sources outside the organisation, for example, goverment statistics, competitors’ annual accounts.
Types of ICT
Networks
Email
Videoconferencing
Webcams
Internet
E-commerce
Interactive DVD
Computer Aided Manufacture (CAM)
Sources of Information
Primary
Secondary
Internal
External
Types of Information
Written
Oral
Pictorial
Graphical
Numerical
Quantitative
Qualitative
Uses of information in business
Monitor and control the business
Assist with decision-making
Measure performance
Idenitfy new business opportunties
Types of software
Databases
Spreadsheet
Word Processing
Desktop Publishing
Presentation Packages
Compter Aided Design (CAD)
Uses of ICT
Assists with decision-making
Assists with providing information to staff
Assists in maintaining accurate business records
Assists in effective communication within an organisation
HRM
Ensures that a business has the right staff, with the right skills, at the right time, who are committed to the business and motivated to give their best.
HR Planning
Identifies the future human resource needs of a business and plans to have the right number of staff, with the right skills at the right time
A human resource audit
A survey of the skills present in the existing workforce
Natural wastage
Staff leaving ”naturally” due to retirement or to take up new jobs
Redundancy
Occurs when workers are let go from a job because there is no longer enough work for them to do. It is through no fault of their own
Voluntary redundancy
Offered to those who wish to apply for it. Various financial incentives include cash payments and earl retirement payments may encourage employees to volunteer
Compulsory
Arise when employees are not given a choice
Dismissal
Being sacked from a job due to incompetence, dishonesty or breach of company discipline
Person specification
Describes the qualities required by the person who will fill the job description
Two external recruitment methods
Internet websites

Newspapers/magazines

Covering letter
A short letter highlighting why you think you are suitable for the job and requesting an interview
A CV
A short document summarizing your education, qualifications, training and experience
Equal opportunities
Means that all applicants of equal ability have an equal chance of being hired or promoted
Induction
The general introduction of new staff into a job or organisation
Staff training
Ensures that employees have the up-to-date skills and knowledge needed to do their present work
On-the-job training
Teaches skills and knowledge through practical work
Off-the-job training
Refers to all types of training and education apart from that occurring in the immediate workplace
Multiskilling
Training workers to be able to undertake a wide range of different jobs, instead of just one
Staff development
Provides staff with additional skills that will enable them to take on new, more challenging work in the future
Performance appraisal
The process of setting performance standards for each employee, and then assessing their performance over a period of time, such as six months or a year.
Flat rate pay
Employees receive an agreed set rate of pay per week/month based on a standard number of hours worked
Time rate pay
Employees are paid a set amount for each hour they work. Overtime work is usually paid at a higher rate
Piece rate pay
Employees are paid for each item produced that meets the desired quality standard
Bonus payments
Give employees a share of the profits resulting from their increased effort or efficiency
Commission
An extra payment based on the percentage of sales achieved
Benefits in kind
Non cash payments to staff
Profit sharing schemes
Firms share part of their profits with employees through payments in addition to wages
Share-ownership schemes
Offer employees free or low price shares in the company, allowing them to become part-owners of the company. This entitles staff to dividends from company profits
Job satisfaction
The degree to which employees feel positive about their job, enjoy doing it and want to continue working with the firm
Flexitime
Means allowing employees to choose their own start and finish time as long as minimum number of hours are worked
Harassment
Behaviour such as unwelcome comments, looks, jokes, suggestions or physical contact that causes stress or intimidation for staff
Job sharing
Allows two people to share one job
Job rotation
Means regularly moving staff around from one job to another
Job enlargement
Increasing the number of different tasks involved in a job
Job enrichment
Providing employees with work requiring greater responsibility, control and decision-making
Employee empowerment
An advanced form of job enrichment and means providing staff with a specific goal, deadline and resources but the freedom to decide how they reach that goal
Industrial relations
The quality of the relations that exist between the owners and the employees in an organisation
Labour turnover
The rate at which employees leave a firm
Industrial democracy
Means giving workers the power to participate and influence management decision-making
Consultative councils
Provide a regular forum where managers can meet with representatives of the workers and discuss the affairs of the business
Works councils
Representatives of the workers have an input into the plans and strategy of the firm
Worker directors
Representatives of the employees elected to sit on the board of directors in their companies
Mortgage
a loan secured on property
Finance
the management of money and credit and banking and investments
Current Account
account used for day-to-day banking
Savings Account
a bank account that accumulates interest
Credit Card
a card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered
Personal Loans
a loan given to a consumer by a bank
Overdraft
when an account is in excess of the credit balance
Currency
Form of money used by nations
Insurance
protection against future loss
Bank
a financial institution that accepts deposits and channels the money into lending activities
Bank Account
a fund that a customer has entrusted to a bank and from which they can make withdrawals
RBS
Royal Bank of Scotland
Transaction
An exchange of money in or out of a bank account or during a purchase.
Deposit
money deposited in a bank
Withdrawal
the act of taking out money or other capital
Debit
a transaction that takes money from an account
Credit
an arrangement to receive cash, goods, or services now and pay for them in the future
Interest
a fixed charge for borrowing money
Balance
the difference between the totals of the credit and debit sides of an account
Statement
a document showing credits and debits
Bank Mandate
A document given by a customer of a bank to the bank, requesting that the bank should open an account in the customer’s name and honour cheques and other orders for payment drawn on the account.
Cheque
a written order directing a bank to pay money
Cash
money in the form of bills or coins
Savings
money set aside, generally in a bank or investments. which earns interest
Account
a statement of recent transactions and the resulting balance
Fixed Rate
a set rate of return
Variable Rate
a rate of return that changes
Bank Application Form
a document allowing a customer to open an account
Pound
Currency of the UK
Euro
Currency of the European Union
Dollar
US Currency
Ringgitt
Currency of Malaysia
Cedi
Currency of Ghana
Yen
Currency of Japan
Swiss Franc
Currency of Switzerland
Real
Currency of Brazil
Ariary
Currency of Madagascar
Exchange Rate
the charge for exchanging currency of one country for currency of another
Budget
a plan for spending money
Expenses
all costs or bills related to the business
Income
earnings from work or investments
Expenditure
the act of spending money for goods or services
Rent
a regular payment by a tenant to a landlord for use of some property
Council Tax
a UK tax levied on households by local authorities
Income Tax
a tax on people’s earnings
Hire Purchase
The buying of equipment by paying in instalments, usually including interest.
Utility Bill
payment of gas and electricity
Repayments
the act of returning money received previously
Essential expenses
financial outlays that are needed
Non-essential expenses
financial outlays that are desired
Cash Budget
an estimate of the actual money received and paid out for a specific period
Grant
the act of providing a subsidy, normally from the Government
Wages
money earned for doing work
Overspending
puchasing more than your budget allows
Gross Pay
the total amount of an employee’s earnings before deductions are taken out
Net Pay
the total earnings paid to an employee after payroll taxes and other deductions
P.A.Y.E.
Pay As Your Earn
HSBC
Hong Kong and Shanghai Bank
Borrow
to get temporary use of
Capital
wealth in the form of money or property owned by a person or business and human resources of economic value
Buy to Let Mortgage
loan on property for landlords
Interest Only Mortgage
loan on property with no repayment of capital
Job Description
a written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job
Trading, Profit and Loss Account
Account which works out the gross profit/loss
Balance Sheet
A financial statement that reports assets, liabilities, and owner’s equity on a specific date.
Annual Accounts
yearly record of the trading results of your company
Debtors
Individuals or organizations that owe money.
Creditors
Those to whom a business owes money.
Working Capital
the difference between current assets and current liabilities
Drawings
Amounts of money or goods removed from the business by the owner.
Profitability
to show how proftiable the organisation is
Liquidity
being in cash or easily convertible to cash
Efficiency
skillfulness in avoiding wasted time and effort
Ratio Analysis
calculations that measure an organization’s financial health
Gross Profit Percentage
GROSS PROFIT divided by NET SALES
Mark-up Ratio
Measures how much has been added to the cost of the goods as profit. It is expressed as a percentage.
Net Profit Percentage
Net profit divided by sales x 100
Return on Capital Employed
Net Profit / Capital Employed x 100
Current Ratio
current assets/current liabilities
Acid Test Ratio
Current Assets-Stock/Current Liabilities
Budget
a plan for making and spending money
Inland Revenue
a board of the British government that administers and collects major direct taxes
3 Stages of The Operating Systems
– Input
– Process
– Output
Stage 1 – Input
Collecting materials and other inputs:

Includes raw materials, equipment/machinery an + labour which are directly put into production.

Stage 2 – Process
Converting materials into something useful:

Involves using the raw materials, equipment + labour 2 make the product/provide the service

Stage 3 – Output
Finished products:

The actual good/service for sale.

What to Consider When Choosing a Supplier
– Quality – of raw materials supplied – acceptable+/consistent?
– Quantity – of raw materials required – can they meet needs?
– Price – can they give lowest price for desired quality + quantity?
– Location – may result in delivery charges/problems
– Reliability – can they deliver goods on an ongoing basis?
– Time – can they deliver within the required time?
Type of Stock
– Raw Materials – flour, eggs, lettuce
– Work in Progress – half made cakes, half made sandwiches
– Finished Goods
Holding too Much Stock =
– high storage cost
– high maintenance cost
– high security cost
– too much expensive space taken up
– money tied up in stock – could be used somewhere else
– stocks unsold – deteriorate, spoiled, stolen
Holding too Little Stock =
– can’t meet orders = lose customers
– cant cope with sudden increase in demand
– out of stock = customers go elsewhere
– poor reputation gained – if cant cope with customer demands
Storage of Stock
Centralised Storage

Decentralised Storage

Benefits of Centralised Storage
– improved security of stock as easier 2 oversee one area with store person, CCTV, locks, etc.
– cheaper 2 provide necessary security + storage in one central area – than in several
Benefits of Decentralised Storage
– stock is always “at hand” when needed
Economic (maximum) Stock Level
– this is the stock level that permits activities 2 continue without interruption
Minimum Stock Level
– this is the stock level that ensures that there will always be enough tock for production
Re-order Stock Level
– this is the level at which new stock should be ordered
Re-order Quantity
– this is the amount of stock required 2 return stock levels 2 economic stock level on the same day as new stock arrives
Just In Time Production
It is when materials are purchased just in time to be used in the production process.
Finished goods are produced just in time to be despatched to the customer

– if there is no demand there is no production

– requires close relationship with reliable suppliers

Types of Production
Capital Intensive

Labour Intensive

Automation

Capital Intensive
– is where mostly machines are used
e.g. soft drinks industry
Labour Intensive
– one which uses mainly people (+ its workforce)
e.g. clothes manufacturing
Automation
– where operations are controlled by computers
e.g car industry
Quality
– Quality Control
– Quality Assurance
– Quality Circles
– Quality Standards
– Benchmarking
Quality Control
– products checked at the end of the production process
Quality Assurance
– products checked at each stage in the process, errors can be rectified, waste is reduced
Quality Circles
– group of workers + managers meet 2 discuss where they can make improvements
Quality Standards
– are awards given to show level of quality has been met/approved
Benchmarking
– use methods identified as best practice in industry, aim to match processes + standards
Distribution
– Road
– Rail
– Air
– Sea
Road
– allows door 2 door deliveries, 24hrs. a day
– refrigerated vehicles for food, etc.
– restrictions of hrs lorry drivers can work

– accounts for 80% of goods transported in the U.K.

Rail
– more environmentally friendly
– faster
Air
– can be expensive
– product required to reach destination fast is better using this
– products requiring quick deliveries
Sea
– useful for bulky products
– however, slow
Labour Payment Systems
– Piece Rate
– Timer Rate
– Bonus Rate
– Flat Rate
– Commission
– Overtime
Piece Rate
– workers are paid per item they produce
– often used in factories
– yhe more a worker produces, the higher the pay
– acts as an incentive for employees 2 work hard
– supervision is requires so that workers do not sacrifice quality for quantity
Timer Rate
– worker are paid by the hour
– often used in the service sector
– it is simple 2 calculate for the employer
– no incentive 2 produce quality work
Bonus Rate
– workers are paid a basic rate with additional payments for targets being met
– a bonus is added onto their normal pay
Flat Rate
– workers are paid a set salary per annum
– this is split into 12 equal payments
– it gives employees a guaranteed monthly income = security
Commission
– workers are paid a percentage of the products sales value
– e.g. cars salesmen usually use this method
– either added onto a basic pay/as the sole income
– used as an incentive 2 motivate staff to sell more
– supervisors must ensure everything is sold by the book
Overtime
– when employees work a set amount for hrs. , overtime may be offered
– employees will be paid more for this overtime
Marketing
process of identifying, analysing and satisfying customer needs
Hall Test
sampling products and offering feedback
Field Research
first hand research that is conducted in real world locations
Desk Research
This is data which has been previously gathered for another purpose.
Survey
the collection of data by having people answer a series of questions
Marketing Mix
Product, Price, Place, Promotion is also known as
Product
goods offered for sale
Price
what you charge for your product/service
Place
where a product/service is sold
Promotion
the process of informing customers
Brand
a copyrighted name given to a product or service
Market Segmentation
the process of separating, identifying, and evaluating the layers of a market in order to identify a target market.
Philip Kotler
Author of best selling Marketing Management. Dedicates every book “To my darling wife, Nancy”
Theodore Levitt
this man suggested that firms should standardize all of their products and services for all of their worldwide markets. Author of Marketing Myopia
Market Share
Percentage of a total market that a product or business has
Consumer market
all potential customers who will buy a product for personal use.
Industrial Market
Buyers who want a product for use in making other products.
Product Orientation
means that the business decisions are based on what it can produce
Market Orientation
is the implementation of the marketing concept. Being marketing orientated is more than just being customer-led. It requires the full support of the organization to be fully implemented in the long term and, indeed, may need a complete change in an organization’s culture.
Goods
tangible products that we use to satisfy our wants and needs
Services
intangible products
Trade Descriptions Act
a law whereby a good or service must do what the advertising claims
Monopolies and Mergers Act
a law aimed at preventing domination of a market by one or two firms
ITC
Independent Television Comission
Monopoly
(economics) a market in which there are many buyers but only one seller
Oligopoly
a market structure in which a few large firms dominate a market
Product substitutes
in economics, when a good or service has a close rival that can take it’s place
USP
Unique selling point
ESP
emotional selling point
Channel of distribution
the route a product follows and the businesses involved in moving a product from the producer to the final consumer
Direct selling
selling to consumers in their homes or where they work
Retailer
an organization that sells to ultimate consumers
Wholesaler
someone who buys large quantities of goods and resells to merchants rather than to the ultimate customers
Agent
a businessman who buys or sells for another in exchange for a commission
Importer
agent who brings good into a country from another country
Exporter
a businessperson who transports goods abroad (for sale)
Buying habits
customer preferences as shown by an analysis of the way they shop
Price skimming
involves charging a high price to recover costs and maximize profit as quickly as possible.
Penetration pricing
Pricing strategy in which the seller charges a low price on a new product to discourage competition and gain market share.
Destroyer pricing
Prices are lowered to weaken competition by forcing them to lower their prices
Promotional Pricing
Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales
Premium Pricing
maintaining high prices to create an exclusive image
Demand-orientated pricing
a pricing strategy that changes due to differences in consumer demand, or time/season
Core product
All the benefits the product will provide for consumers or business customers.
Augmented product
Additional services and benefits like credit, installation or warranty
Product mix
all the products a company makes or sells.
Product range
the combination of different products a business manufactures and sells
Product life cycle
a theoretical model of what happens to sales and profits for a product class over time
Prototype
an early or original product upon which later products are based
Test market
Selling a product on a limited bases in a defined ara to help decide the effectiveness or potential marketing actions
Idea Generation
The first step of product development in which marketers brainstorm for products that provide customer benefits and are compatible with the company mission.
Extension strategies
occurs when marketing changes are made to prevent sales falling
Product Portfolio
All the products a company has available for customers at any one time.
Boston Box
Marketing tool that includes cash cows, question marks, dogs, and stars
Branding
establishing an identity for a range of products
Repeat purchases
when customers come back and buy again
Own Brands
Many large retailers make products and brand them under there own name
Informative advertising
advertising that provides information about a product to consumers
Persuasive advertising
advertising designed to appeal to your emotions to influence you to buy, but does not provide much information
Corporate advertising
advertising intended to establish a favorable attitude toward a company as a whole.
Sales Promotion
Short-term incentives to encourage the purchase or sale of a product or service.
Into the pipeline
Deals that encourage the retailer to purchase from the manufacter
Out of the pipeline
Deals that encourage end custumers to purchase the product
Point of Sale
places where goods are sold to the public – shops, stores, kiosks, market stalls, etc
Dealer Loader
A gift, often part of a display, given to a retailer that purchases a specified quantity of merchandise.
BOGOF
buy one get one free
PR
Public Relations
Packaging
Materials used to wrap or protect goods.
Merchandising
Displays and presentations used to promote and sustain certain products
Mass Marketing
using one marketing strategy to reach all customers
Niche Marketing
the process of finding small but profitable market segments and designing or finding products for them.
Market Growth
The percentage change in the size of the market
Personal Interview
Method of collecting data in which subjects are more likely to participate, but costly and subjects may not divulge personal info.
Postal Survey
a survey conducted by the mail
Telephone Survey
a research method in which respondents answers to a questionaire are recorded by interviewers on the phone.
Quota sampling
includes the same proportion of individuals with certain characteristics as found in the population. researcher uses his/her individual judgment to select respondents
Random sampling
a method of poll selection that gives each person in a group the same chance of being selected
Consumer panel
a group of consumers who provide information on a continuing basis
Focus group
Group of individuals brought together for the purpose of asking them questions about a product or marketing strategy.
Hall test
sampling products and offering feedback
Club Card
Tesco’s Loyalty Card
EPOS
Electronic point of sale
Internet
a computer network consisting of a worldwide network of computer networks that use the TCP/IP network protocols to facilitate data transmission and exchange
Mr McGowan’s Blog
www.mrmcgowan.blogspot.com
Bill Gates
founder of microsoft
Steve Jobs
co-founder of Apple
Anita Roddick
Founder of the Body Shop
Tom Farmer
Founder of Kwik Fit
Tom Hunter
Scottish entrepreneur, owned and sold Sports Division
Alan Sugar
Owner of Amstrad
Donald Trump
American property billionaire
Peter Jones
English dragon made his fortune in telecoms
Michelle Mone
Owner of Ultimo Bras
Deborah Meaden
Dragon famous for Holiday homes/parks
Rachel Elnaugh
Dragon who owned Red Letter Days but went bust
Doug Richard
US born Dragon who runs Library House
Theo Paphitis
Cypriot dragon who owns Rymans stationers
Duncan Bannantyne
Clydebank born Scottish dragon, owner of gymns and bars
Dave Whelan
Wigan Athletic’s JJB Sports owner
John Caudwell
Owner of Phones 4 U
Ann Gloag
Stagecoach owner
David Murray
Ayr born Scottish businessman, involved in football, basketball and metals.
Lee Scott
Wal-Mart CEO
Roger Smith
Infamous CEO of General Motors in the 1980s. Chased by film-maker Michael Moore for years!
Ingvar Kampread
Founder of IKEA
Henry Ford
United States manufacturer of automobiles who pioneered mass production (1863-1947)
Philip Kotler
Author of best selling Marketing Management. Dedicates every book “To my darling wife, Nancy”
Douglas McGregor
He formulated his theory X and Theory Y, Classical =X and a early stages of human relations. Theory Y is more of a realistic view he believed workers are.
Henri Fayol
French management theorist who is credited with founding the functions of managers
Frederick Taylor
an American efficiency engineer who wrote “The Principles of Scientific Management”, which earned him the title “father of scientific management”
Abraham Maslow
Psychologist who invented the Hierarchy of needs
Tom Peters
With Robert A. Waterman wrote the seminal In Search of Excellence
Michael E. Porter
Author and Harvard Business School Professor. Created the Five Forces, and is an expert in Competitve Strategy
Adam Smith
Scots economist and author of The Wealth of Nations
Elton Mayo
Hawthorne Experiment 1928, founder of the human relations movement
Peter Drucker
Management guru who was an advocate of Management By Objectives (MbO)
James Caan
Dragon who teams up with Duncan Bannantyne often
Richard Farleigh
Australian dragon who specialised in start-ups
Jack Welch
Legendary CEO of General Electric
Theodore Levitt
this man suggested that firms should standardize all of their products and services for all of their worldwide markets. Author of Marketing Myopia
Andrew Carnegie
Dunfermline born United States industrialist and philanthropist who endowed education and public libraries and research trusts (1835-1919). Owned US Steel
Evan Davis
BBC presenter of Dragons Den
Richard Pascale
Author of The Art of Japanese Management
W. Edwards Deming
US quality guru whose ideas were accepted in Japan
Joseph Juran
Romanian born US quality guru, famous for Pareto Principle
Henry Mintzberg
Divided manager’s job into three types: interpersonal, informational, decisional
Tim Berners Lee
Father of the World-Wide Web. Wrote the first web-browser editor
Alexander Graham Bell
Scottish born inventor of the telephone (1847-1922)
John Logie Baird
Helensburgh born Scottish inventor; 1926–first to demonstrate a television system before a gathering of 50 scientists in his attic workshop, stretched cable from London to Glasgow and London to New York
James Watt
Scottish engineer and inventor whose improvements in the steam engine led to its wide use in industry (1736-1819)
Larry Page
American computer scientist, co-founded Google, the worlds largest internet company
Sergey Brin
co-founder of Google
Ray Kroc
Milkshake salesman that turned a small eatery into the McDonalds mega-franchise
Warren Buffett
The Oracle of Omaha,Chairman of Berkshire Hathaway . A billionnaire investor.
Carlos Slim
Mexican engineer, businessman, and philanthropist
Charles Handy
British management guru specialising in the future of work
John Adair
Northern Irish management guru focusing on Leadership
Rosabeth Moss Kanter
Female business guru who is a lead advocate for empowerment
Roman Abramovitch
Russian billionaire, owns Chelsea FC
John Madejski
Founder of Auto Trader. Owns Reading FC
Igor Ansoff
Russian born management guru who invented the growth matrix
Meredith Belbin
Famous for identifying team roles
Frederick Herzberg
the founder of the two-factor motivational theory
Geert Hofstede
Dutch engineer who created a framework of national and organisational culture
Edward De Bono
Father of lateral thinking
Alfred Chandler
Guru who believes structure must always follow strategy
E. F. Schumacher
German economist who worked for British Coal Board who belives Small is Beautiful
Alfred Sloan
Led General Motors from 1920s-50s. Father of decentralisation.
Gary Hamel
Guru who focuses on Core Competencies. Writes with C. K. Prahalad
Sumantra Ghoshal
Indian born guru who with Christopher Bartlett developed idea of Transnational Corporation
Business
Any organisation working towards a set of objectives
Goods
Things we can see and touch
Durable Goods
Things we can use again and again
Non-durable goods
Things we can use only once
Service
A thing that is done for us
Wants
Non-essential things we would like to have
Needs
Essential things for survival
Land
An economic term meaning natural resources
Labour
An economic term meaning employees
Capital
An economic term meaning factories, machines, vehicles, tools etc
Enterprise
The human effort that creates goods and services
Entrepreneur
The person who brings together the factors of production
Factors of Production
Land, Labour, Capital and Enterprise
Cycle of Business
The constant process of producing goods and services
Primary Sector
Businesses involved in extracting natural resources
Secondary Sector
Businesses involved in manufacturing & construction
Tertiary Sector
Businesses involved in providing services
De-industrialisation
The process of manufacturing decline
Sole Trader
a business owned by a single person
Partnership
a business owned by two or more people
Public Limited Company
a buisness witth limited liabilty whose shares are availible to the general public to buy on the stock market
Private Limited Company
a company whose shares are not bought and sold on the stock market and can only pass to another person with the agreement of other shareholders
Franchise
the right to use a specific business’s name and sell its products or services in a given territory.
Public Corporation
An organisation created by an Act of Parliament
Charity
an organisation created to promote good causes
Private Sector
the part of the economy owned by individuals and businesses
Public Sector
the part of the economy owned by the government
Voluntary Sector
organistions set up to rise money for good causes, or to provide facilities for their members
Deed of Partnership
contract drawn up between owners
Memorandum of Association
Document that regulates a firm’s external activities and must be drawn up on the formation of a plc
Partnership Agreement
a written agreement among all owners
Limited Liability
the responsibility of a business’s owners for losses only up to the amount they invest; limited partners and shareholders have limited liability
Unlimited Liability
The owner is personally and fully responsible for all losses and debts of the business
Royalty
payment to the holder of a patent or copyright or resource for the right to use their property
Articles of Association
The internal ‘rule book’ that, according to corporate legislation, every incorporated firm must have and work by. And which, along with memorandum of association, forms the constitution of a firm.
Shareholder
a person who invests in a corporation by buying stock and is a partial owner
Stakeholder
someone with a key interest in an organiszation
Manager
person appointed to supervise and control resources and expenditures
Employee
a worker who is hired to perform a job
Government
the institution through which a society makes and enforces its public policies
Local Community
people who live in an area
Customer
someone who pays for goods or services
Consumer
a person who uses goods or services
Ordinary Shares
stock whose holders are given a vote
Preference Shares
stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights
Prospectus
A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details about an investment offering for sale to the public.
Share Issue
act of introducing more shares onto the market
Debenture
bond issued to secure a loan
Hire Purchase
The buying of equipment by paying in instalments, usually including interest.
Divestment
act of selling assets to make cash
Loan
the temporary provision of money (usually at interest)
Mortgage
a long-term loan extended to someone who buys property
Pressure Group
a group of people who try actively to influence legislation
Multinational
a corporation that has manufacturing or service operations in a number of different countries
Globalisation
causing distinctively American norms and values to spread throughout the world
Division of Labour
the breaking up of a production process into a series of specialized tasks, each by a different worker.
Dividend
that part of the earnings of a corporation that is distributed to its shareholders
Registrar of Companies
the
Legislation
a law passed by a governing body
PESTEC
Political, Economic, Social, Technological, Environmental, Competitive
Share Price
the value of all the assets (stocks) divided by the number of shares
Stock Exchange
A market for buying and selling stock
Corporation Tax
The tax which private and public limited companies must pay on their profits.
VAT
a tax levied on the difference between a commodity’s price before taxes and its cost of production
Income Tax
a tax on people’s earnings
AGM
Event where shareholders meet to discuss important decisions
EGM
Meeting where an unusual event has brought shareholders together
Diversification
A risk management technique that mixes a wide variety of investments within a portfolio.
Vertical Integration
when a firm would strive to control all aspects of production (from acquisition of raw materials to the finished product)
Horizontal Integration
absorption into a single firm of several firms involved in the same level of production and sharing resources at that level
Local Authority
an administrative unit of local government
Profit
the excess of revenues over outlays in a given period of time (including depreciation and other non-cash expenses)
Profit Maximisation
the aim to make as much profit as possible
Survival
a strategy to remain in existence
Turnover
the volume of sales measured in pounds
Growth
a process of becoming larger or more numerous
Social Responsibility
The obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization.
Risk
expose to a chance of loss or damage
Suppliers
Companies that provide material, human, financial, and informational resources to other companies
Tax Payers
People who pay earnings to the Government
Investors
a person or group who puts money into a business
Trustee
members of a governing board
Donor
person who makes a gift of property
Bank
a financial institution that accepts deposits and channels the money into lending activities
Building Society
British equivalent of United States savings and loan association
Grant
a gift of money to be used for a special purpose
Business Gateway
advisory agency to assist small businesses
Trade Fair
an event at which many different companies show and sell their products
European Union
an international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members
Inland Revenue
a board of the British government that administers and collects major direct taxes
Merger
the combination of two or more commercial companies
Takeover
One investor group buys enough stock in a corporation to gain control of the other corporation
Demerger
when a firm divides into more than one firm
Management buy-out
a form of acquisition where a company’s existing managers acquire a large part or all of the company.
Unemployment
the total number of people out of work, but wanting to work
Interest Rate
the percentage of a sum of money charged for its use
Exchange Rate
the charge for exchanging currency of one country for currency of another
Greenpeace
an international organization that works for environmental conservation and the preservation of endangered species
Environment
all of the surrounding things, conditions, and influences affecting the growth or development of living things.
Grey Pound
the aging consumer market is often called this
CAM
computer aided manufacture
CAD
Computer Aided Design
Robotics
Mechanical devices programmed to do routine tasks
Automation
the act of implementing the control of equipment with advanced technology
Assembly Line
In a factory, an arrangement where a product is moved from worker to worker, with each person performing a single task in the making of the product.
Hardware
(computer science) the mechanical, magnetic, electronic, and electrical components making up a computer system
Software
(computer science) written programs or procedures or rules and associated documentation pertaining to the operation of a computer system and that are stored in read/write memory
IT
information technology
ICT
Information and Communications Technologies
Advertising
any paid form of communication through mass media directed at identified consumers to provide information and influence their actions
Finance
the management of money and credit and banking and investments
Training
being taught how to do something
Recruitment
The development of a pool of applicants for jobs in an organization.
Selection
the process of collecting info about applicants to make hiring dicisions
Marketing
the commercial processes involved in promoting and selling and distributing a product or service
Sales
the exchange of a product of service for money
Gross Profit
(finance) the net sales minus the cost of goods and services sold
Net Profit
The money you have left after you have paid for expenses
Purchasing
the function in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for goods and services
Buyer
someone who purchases
Competitor
A rival.
Michael Porter
Business Guru who created the Five Forces
Alan Sugar
Owner of Amstrad
Donald Trump
American property billionaire
Richard Branson
Head of Virgin Group
Michelle Mone
Owner of Ultimo Bras
Anita Roddick
Founder of the Body Shop
Phillips Curve
A graph showing the relationship between inflation and unemployment . The theory states that unemployment can be reduced in the short run by increasing price level (inflation) at a faster rate. Conversely, inflation can be lowered at the cost of possibly increased unemployment and slower economic growth
Downsizing
reducing a company in size by laying off workers and managers to become more efficient
Recession
the state of the economy declines
Primary Information
first hand information gathered by a business for their own purposes using questionnaires, interviews, ect
Secondary Information
has been collected by someone else for their own purpose
Internal Information
information from within the firm
External Information
information from outwith the firm
Qualitative information
non numerical information
Quantitative information
numberical information
Supercomputer
a mainframe computer that is one of the most powerful available at a given time
Videoconferencing
A method of communication that is used when the parties can not meet face-to-face that allows for verbal and visual communcation
Audioconferencing
allows an operator to dial all participants in the teleconference group, bringing each participant into the meeting as he or she is reached.
Teleworking
working from home using computers
LAN
a local computer network for communication between computers
WAN
a computer network that spans a wider area than does a local area network
PDA
a lightweight consumer electronic device that looks like a hand-held computer but instead performs specific tasks
Fax
Telephonic transmission of scanned-in printed material
EPOS
Electronic point of sale
EFTPOS
electronic funds transfer at point of sale
Data Protection Act
the law which governs what information can be held by people
Floatation
financing a commercial enterprise by bond or stock shares
Bill Gates
founder of microsoft
Steve Jobs
co-founder of Apple
Sergy Brin & Lawrence Page
Founders of Google
GE
General Electric
Dragons Den
TV show where inventors pitch ideas for cash
Peter Jones
English dragon made his fortune in telecoms
Duncan Bannantyne
Scottish dragon, owner of gymns and bars
Theo Paphitis
Cypriot dragon who owns Rymans stationers
Wall Street
area in lower Manhattan where the New York Stock Exchange is located