MSCE Business Studies flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Value added
- The difference between the selling price of a product and the cost of the bought-in materials and components used to make it.
- PESTLE analysis
- A framework that scans Political, Economic, Social, Technological, Legal and Environmental factors in the external environment to identify opportunities and threats facing a business.
- Stakeholder
- Any individual or group with an interest in, or affected by, a business's activities, such as owners, employees, customers, suppliers, lenders, government and the local community.
- Sole trader
- A business owned and controlled by one person who has unlimited liability for its debts and has no separate legal identity from the business.
- Private limited company
- An incorporated business with separate legal personality and limited liability whose shares are sold privately and not offered to the general public.
- Unlimited liability
- A legal position in which the owner's personal assets can be used to settle business debts, typical of sole traders and ordinary partnerships.
- Franchise
- An arrangement where a franchisee pays an initial fee and ongoing royalties to a franchisor for the right to trade under an established brand and operating system.
- Accounting equation
- Assets equal liabilities plus owner's equity; it must remain balanced after every transaction and underpins the structure of the balance sheet.
- Break-even output
- The quantity at which total revenue equals total costs, calculated as fixed costs divided by the difference between selling price and variable cost per unit.
- Current ratio
- A liquidity measure calculated as current assets divided by current liabilities; a value near 2:1 is often considered comfortable for short-term solvency.
- Cash flow forecast
- A projection of expected cash inflows and outflows over a period, used to predict cash shortages; it differs from profit because it records timing of cash, not accruals.
- Market segmentation
- Dividing a market into groups of buyers with similar characteristics or needs, such as demographic, geographic, psychographic or behavioural groups, so marketing can be targeted.
- Penetration pricing
- A launch strategy that sets a low price to attract customers quickly and build market share, often later raising the price once demand is established.
- Marketing mix
- The combination of product, price, place and promotion decisions used to meet the needs of a chosen target market; services add people, process and physical evidence.
- Product life cycle
- The stages a product passes through: development, introduction, growth, maturity and decline, each requiring different pricing, promotion and extension strategies.
- Just-in-time production
- A lean method where materials arrive only as needed for production, reducing stock-holding costs but increasing vulnerability to supply disruption.
- Productivity
- A measure of output per unit of input, such as output per worker per period; rising productivity lowers average cost if total costs are unchanged.
- Economies of scale
- The reduction in average cost per unit as output increases, arising from purchasing, technical, financial or managerial advantages of larger scale.
- Capacity utilisation
- Actual output expressed as a percentage of maximum possible output; low utilisation means fixed costs are spread over fewer units.
- Labour turnover
- The rate at which employees leave a business, calculated as the number leaving divided by average number employed, expressed as a percentage.
- Herzberg two-factor theory
- The idea that hygiene factors such as pay and conditions prevent dissatisfaction, while motivators such as achievement and responsibility create genuine job satisfaction.
- On-the-job training
- Training delivered in the workplace while the employee performs real tasks, such as coaching, mentoring or job rotation, offering immediate relevance and lower cost.
- Business plan
- A written document setting out a business idea, market analysis, marketing and operations plans, management team and financial forecasts, used to guide the venture and attract finance.
- Overtrading
- Rapid growth that outpaces available working capital, leaving a business short of cash even though sales and profits may be rising.
- Business angel
- A wealthy private individual who invests capital and often expertise in an early-stage business in exchange for an ownership stake.
- Grapevine
- An informal communication channel through which information spreads among employees outside official lines; it is fast but prone to distortion and rumour.
- Communication barriers
- Obstacles that distort or block a message, including semantic problems such as jargon, physical noise, psychological attitudes and organisational factors such as excessive hierarchy.
- Contract essentials
- The elements needed for a valid contract: offer, acceptance, consideration, intention to create legal relations, capacity and legality of purpose.
- Trademark
- A legally protected sign, logo or name that identifies a business's goods or services and distinguishes them from competitors' offerings.
- Corporate social responsibility
- A business's voluntary commitment to act ethically toward stakeholders and the environment beyond the minimum required by law.
- Price elasticity of demand
- The percentage change in quantity demanded divided by the percentage change in price; demand is elastic above 1 and inelastic below 1.
- Opportunity cost
- The value of the next best alternative forgone when a business chooses one use of its scarce resources over another.