HSC Business Studies flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Operations management

The business function that transforms inputs into outputs, adding value through planning, organising, and controlling resources to achieve strategic goals.

Value adding

The process of increasing the perceived worth of a product or service by modifying inputs, so customers are willing to pay more.

Break-even point

The level of output where total revenue equals total costs, calculated as fixed costs divided by the difference between unit price and unit variable cost.

Economies of scale

Cost advantages that arise when increased production lowers the average cost per unit, due to fixed costs being spread over more output.

Just-in-time (JIT)

An inventory management approach where materials arrive exactly when needed for production, minimising stock holding costs but requiring reliable suppliers.

Quality control

A process of inspecting products at various stages to ensure they meet standards, identifying and removing defective items before sale.

Critical path analysis

A scheduling technique that identifies the longest sequence of dependent tasks in a project, determining the minimum time needed for completion.

Global sourcing

Purchasing goods or services from suppliers located outside the home country to reduce costs or access specialised expertise.

Market segmentation

Dividing a broad market into smaller groups of consumers with similar characteristics, needs, or behaviours to target them more effectively.

Target market

The specific group of consumers a business aims its marketing efforts and product offerings toward, selected after segmentation.

Marketing mix

The combination of product, price, place, and promotion (the 4Ps) that a business uses to influence demand for its offerings.

Product life cycle

The stages a product goes through over time: introduction, growth, maturity, and decline, each requiring different marketing strategies.

Price skimming

A pricing strategy where a high initial price is set for a new or innovative product to maximise profit from early adopters before lowering it.

Penetration pricing

Setting a low initial price to attract customers quickly and gain market share, often used for new products entering competitive markets.

Promotion mix

The blend of advertising, personal selling, sales promotion, publicity, and public relations used to communicate with target customers.

Market research

The systematic gathering and analysis of information about customers, competitors, and the market to support marketing decisions.

Primary data

Information collected firsthand for a specific research purpose, such as through surveys, interviews, or observation, offering relevance but higher cost.

Branding

Creating a distinct identity for a product through name, logo, and design, helping customers recognise and differentiate it from competitors.

Accounting equation

The fundamental relationship stating that a firm's assets equal its liabilities plus owner's equity, underpinning the balance sheet.

Balance sheet

A financial statement that reports a business's assets, liabilities, and equity at a specific point in time, showing financial position.

Income statement

A financial report showing revenues, expenses, and profit or loss over a period, also known as a profit and loss statement.

Current ratio

A liquidity measure calculated as current assets divided by current liabilities, indicating a firm's ability to meet short-term obligations.

Debt-to-equity ratio

A gearing ratio calculated as total liabilities divided by total equity, showing the proportion of debt used to finance assets.

Gross profit ratio

A profitability ratio calculated as gross profit divided by sales, expressed as a percentage, measuring markup and production efficiency.

Net profit ratio

A profitability ratio calculated as net profit divided by sales, expressed as a percentage, showing overall earnings after all expenses.

Cash flow statement

A financial statement that reports cash inflows and outflows from operating, investing, and financing activities over a period.

Working capital

The funds available for day-to-day operations, calculated as current assets minus current liabilities, indicating short-term financial health.

Retained profits

Internal equity finance consisting of profits kept in the business rather than distributed to owners, used for reinvestment.

Human resource cycle

The four sequential stages of managing employees: acquisition, development, maintenance, and separation, each with distinct activities.

Recruitment

The process of attracting and generating a pool of qualified applicants for a job, through internal or external sources.

Performance appraisal

A formal evaluation of an employee's work performance against set criteria, used to inform training, promotion, and development decisions.

Labour turnover

The rate at which employees leave a business and are replaced, calculated as separations divided by average staff number, indicating HR effectiveness.