TASC Business Studies Level 3 key terms

The external conditions and forces, such as economic, legal, social, technological and competitive factors, that surround an organisation and influence its decisions, costs, opportunities and chances of success.

A scanning tool that examines political, economic, social, technological, legal and environmental influences on a business, helping managers anticipate change and adjust strategy before external pressures become damaging.

Any individual or group with an interest in what an organisation does and how it performs, including owners, employees, customers, suppliers, lenders, local communities and government bodies.

A person or institution that owns shares in a company, giving them a claim on profits through dividends and, usually, voting rights at general meetings on matters such as board appointments.

The willingness and ability to spot an opportunity, take calculated risks and organise resources to create a new product, service or way of working, often through starting a business.

A person who starts and runs a business venture, supplying capital and ideas, bearing the risk of failure and taking the rewards of success in return for effort and initiative.

The way competition is arranged in a market, ranging from many small sellers through to a single supplier, which affects pricing power, barriers to entry and the behaviour firms can get away with.

A market situation where one supplier dominates or controls supply of a product, allowing it to set prices with little competitive pressure, often subject to regulation to protect consumers.

Obstacles that make it difficult or costly for a new firm to start competing in an established market, such as high capital requirements, brand loyalty, patents or strict licensing rules.

Dividing a broad market into smaller groups of buyers who share similar needs, characteristics or behaviour, so that products, prices and promotion can be tailored to each group effectively.

The specific group of customers an organisation chooses to aim its product, pricing, promotion and distribution at, having judged that group offers the best match with its capabilities.

The combination of product, price, place and promotion decisions that a business controls in order to attract its chosen customers and compete against rival offers in the market.

The pattern of sales and profit a product typically follows over time, from development and introduction through growth and maturity to eventual decline, guiding decisions on pricing and refreshment.

The tendency of customers to keep buying a particular brand repeatedly, often because of satisfaction, habit or emotional attachment, which creates repeat revenue and makes rivals work harder to win them.

The proportion of an organisation's maximum possible output that is actually being produced, expressed as a percentage, indicating how fully plant, equipment and labour are being used.

Cost advantages that arise as output increases, because fixed costs are spread over more units and buying or production becomes more efficient, lowering the average cost of each item produced.

Checking finished output against standards, often by inspecting samples at the end of production, so that faulty items are identified and prevented from reaching customers.

An approach that seeks to eliminate waste in processes, for example by holding minimal stock, timing deliveries closely and improving flow, so that resources are used efficiently and costs are reduced.

The level of output or sales at which total revenue exactly equals total costs, so the business makes neither profit nor loss and every additional unit sold begins to add profit.

A cost that does not change with the level of output in the short term, such as rent, insurance or salaried management, so it must be paid even when production is low or zero.

A cost that rises or falls directly as output changes, such as raw materials or piece-rate labour, so total variable cost increases in proportion to the number of units produced.

The amount left from each sale after deducting variable costs, which goes towards covering fixed costs and then towards profit; it is used to calculate break-even output.

The movement of money into and out of a business over a period, showing when receipts arrive and payments fall due, which matters because timing problems can sink otherwise profitable firms.

The money tied up in day-to-day operations, calculated as current assets minus current liabilities, representing the funds available to pay short-term bills and keep trading smoothly.

How easily an asset can be turned into cash, or how readily a business can meet its short-term obligations from assets it holds, without having to sell long-term investments at a loss.

A financial plan setting out expected income and planned spending for a defined period, used to coordinate activities, allocate funds and later compare actual results with what was intended.

Comparing planned figures with actual outcomes to find and explain differences, allowing managers to investigate overspending, revise forecasts and improve control over costs and revenues.

A profitability ratio showing gross profit as a percentage of revenue, revealing how much of each sale remains after direct costs of the goods or services sold.

The amount remaining after all costs have been deducted from revenue, including direct costs, overheads, interest and tax, representing the final surplus earned during a period.

The total money a business receives from selling its goods or services over a period, calculated as price multiplied by quantity sold, before any costs are subtracted.

A share of a company's distributable profit paid to shareholders, usually as an amount per share, decided by the directors and representing a return on the owners' investment.

A written document describing a venture's objectives, target market, operations, finances and risks, used to guide the owners and to persuade lenders or investors to provide funding.

A structured review of an organisation's internal strengths and weaknesses alongside external opportunities and threats, used to inform objectives, strategy and planning decisions.

A goal framed to be specific, measurable, achievable, relevant and time-bound, so that progress can be tracked and staff understand exactly what success looks like.

The way roles, responsibilities and reporting lines are arranged within a business, showing who answers to whom and how decisions and information flow between levels.

The number of employees who report directly to a single manager; a wide span means fewer management layers, while a narrow span allows closer supervision but adds hierarchy.

Passing authority to carry out a task to a subordinate while retaining overall accountability, which frees managers' time, develops staff skills and can speed up decision-making.

The value of the next best alternative given up when a choice is made, reminding decision-makers that using resources for one purpose means losing the benefits of another.