VCE Industry and Enterprise flashcards

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

Industry definition

A grouping of businesses that produce similar goods or services and therefore compete for the same customers, such as the retail, mining or hospitality industry.

Enterprise

The initiative, drive and willingness to take on financial risk involved in establishing and operating a business venture, often described as the organising factor of production.

Entrepreneurship

The process of identifying an unmet need or opportunity, assembling resources and creating a venture to pursue it, accepting the associated risk and uncertainty.

Factors of production

The resources used to produce goods and services: land for natural resources, labour for human effort and skills, capital for machinery and finance, and enterprise for organisation.

Value chain

The sequence of activities that transforms inputs into outputs, from sourcing and production through distribution to customer service, adding value at each stage.

Value added

The difference between the value of a firm's outputs and the cost of the inputs it purchases, representing the extra worth created by its own activities.

Stakeholder

Any individual or group affected by or interested in an enterprise's decisions, including owners, employees, customers, suppliers, lenders, the community and government.

Sole trader

A business owned and operated by one person, who keeps all profits but bears unlimited personal liability for business debts and is not a separate legal entity.

Partnership

A business owned by two or more people who share profits, control and risk under an agreement, generally with unlimited personal liability unless a limited partnership structure applies.

Company

A business registered as a separate legal entity, owned by shareholders and managed by directors, which provides limited liability to its owners.

Cooperative

A business owned and democratically controlled by its members, who share the benefits, commonly used in agriculture, retail buying groups and community services.

Social enterprise

A business that trades to generate revenue while pursuing a primary social or environmental mission, reinvesting most surplus into that mission rather than distributing it to owners.

Market structure

The organisation of a market according to the number of firms, product similarity, barriers to entry and price-setting power, from perfect competition through to monopoly.

Oligopoly

A market dominated by a small number of large firms whose actions affect each other, often with high barriers to entry and strategic interdependence in pricing.

Monopoly

A market in which a single firm supplies the good or service, facing little or no direct competition and typically protected by high barriers to entry.

Market share

A firm's sales or revenue expressed as a percentage of total industry sales or revenue, indicating its relative size and competitive position in the market.

PESTLE analysis

A framework that scans political, economic, social, technological, legal and environmental factors in the external environment to identify opportunities and threats facing an enterprise.

Break-even quantity

The number of units a business must sell for total revenue to equal total costs, calculated as fixed costs divided by the contribution margin per unit.

Contribution margin

The selling price per unit minus the variable cost per unit, showing how much each sale contributes toward covering fixed costs and then generating profit.

Fixed costs

Costs that do not change with the level of output in the short term, such as rent, insurance and salaried management, and must be paid even at zero production.

Variable costs

Costs that change in direct proportion to the level of output, such as raw materials, packaging and hourly production labour.

Gross profit

Revenue minus the cost of goods sold, measuring the return from trading before operating expenses such as marketing, administration and rent are deducted.

Net profit

The amount remaining after all operating expenses, interest and tax are deducted from gross profit; it is the final measure of the period's earnings.

Profit margin

Net profit divided by revenue, multiplied by 100, showing the percentage of each sales dollar retained as profit after all expenses.

Labour productivity

Output produced divided by labour input, such as hours worked or number of employees, indicating how efficiently human effort is converted into goods or services.

Cash flow

The movement of money into and out of a business over a period; positive cash flow means receipts exceed payments, distinct from accrued profit.

Liquidity

A business's ability to meet short-term obligations as they fall due, measured by ratios such as current assets divided by current liabilities.

Business lifecycle

The stages a venture passes through: start-up, growth, maturity and either decline or renewal, each with different financing, staffing and risk characteristics.

Fair Work Act

Australian legislation establishing minimum employment standards, minimum wages through annual reviews, enterprise bargaining and unfair dismissal protections for employees.

Australian Consumer Law

A national law within the Competition and Consumer Act prohibiting misleading conduct and unconscionable behaviour, and providing consumer guarantees on goods and services.

Work health and safety duty

The legal obligation on employers to ensure, so far as reasonably practicable, the health and safety of workers and others affected by the business.

Triple bottom line

A reporting approach that evaluates performance across three dimensions: financial profit, social outcomes for people and environmental impact on the planet.

Innovation

The implementation of a new or significantly improved product, process, organisational method or marketing approach that creates value for the enterprise or its customers.