● Opportunity Cost: A benefit/value that must be given up in order to achieve something else.

● Specialization: Workers/machines specialize in some part of the production process.

● Division of labour: Production process has been divided into different tasks for a specialized
worker to work

● De-industrialisation: when the manufacturing sector becomes less important in a country.

● Privatisation: selling some public sector businesses to private sector businesses

● Entrepreneur: A person who organises, and operates a business.

● Business Plan: Document with important information about your business e.g. Business
objective, operations, finance, owners

● Internal Growth: Business grows by itself

● External Growth: Take-over or merger with another business.

● Horizontal integration: Firms in the same industry at the same stage of production merges.
● Vertical integration: Business expands by merging with another business in another stage of
production.
-Backward vertical integration is when a business merges with another
business in the previous stage of production
-Forward is when a business merges with a business in the next stage of
production

● Conglomerate merger: Two businesses in a completely different industry combine to form a new
business.

● Sole trader: A business owned by just one person.

● Partnership: A business in which 2 to 20 people agree to own it.
● Private Limited Company (LTD): Private limited company LTD is different from the other because
it can sell shares and it is an incorporated business. Company must be owned by at least 2
shareholders.Shares are sold privately to friends and family.Has separate identity from owners,
incorporated, so company accounts are separate from the owners.
● Public Limited company (PLC): A PLC is similar to LTD only the shares can be sold to the public.
● Stakeholder: any person or group with a direct interest in the performance or business activities
of a business.

● Motivated worker: A hard working employee who works effectively for a business.

● Organizational structure: refers to the levels of management and division of responsibilities

within a business. They can be represented on organizational charts.

● Chain of Command: is how the power and authority is passed down from the top of the
organisation (managers) to lower employees.

● Span of Control: The number of employees working directly under a manager.

● Levels of Hierarchy: Number of layers in an organisation structure

● Line Managers: have authority over people directly below them in the organizational structure.

● Staff Managers: are specialists who provide support, information and assistance to line
managers.

● Delegation: Passing down authority and responsibility to a subordinate (employee)

● Trade union: Group of workers who have joined together to ensure their interests are
protected.

● Job Analysis: A study of the tasks and activities to be carried out by the new employee

● Job Description: This describes the main duties and responsibilities of the job

● Job Specifications: The qualifications and qualities necessary to perform the job (e.g.
educational requirements, experience needed)

● Internal Recruitment: Promoting staff or moving workers from one job to another within the
company.

● External Recruitment: Recruiting someone who is not an existing employee and will be new to
the business.
● Application forms and CVs: To see if applicant matches the job specification

● Interviews: Find out information about candidate’s abilities and personal qualities

● Testing: Applicants may be required to undertake tests to check their ability to do the job.

● Part-time worker: employee that works fewer hours than a full-time worker.

● Induction training: Introduction given to a new employee explaining the company’s activities
and procedures and introducing them to other employees.

● On the job training: Experienced worker teaches new worker how to do the job.

● Off the job training: Training taking place off the job (not being trained while doing job)

● Dismissal: Employee is told to leave because of bad behavior

● Redundancy: Employee told to leave because the business doesn’t need a worker for that job
anymore (not employees fault)

● Communication – Process by which information or instruction is exchanged between one group

or person to another.

● Internal communication (Communication from and to people within the business

● External communication (Communication from people inside the business to people outside the
business) e.g. Employees talking to customers,

● Formal communication – Recognised and approved by business

● Informal communication – Information is sent and received casually

● One-way communication – Communication that does not allow for a response

● Two-way communication – Communication where the receiver sends feedback to the sender
about the topic.
● Marketing:marketing is the management process responsible for identifying, anticipating and
satisfying consumers’ requirements profitably.
● Niche Marketing: identifying and exploiting a small segment of a larger market by developing
products to suit it.
● Mass Marketing: selling the same product to the whole market with no attempt to target groups
within it.
● Market segmentation: is the process of dividing a market of potential customers into groups, or
segments, based on different characteristics.
● A market segment: is an identifiable sub-group of a larger market in which consumers have
similar characteristics and preferences
● Market research – Research carried out to identify current and future consumer needs and
wants

● Primary research – Collection of original information by directly contacting with potential or

existing customers

● Focus group (Group of consumers give detailed opinion about product) +Very detailed
information –Expensive and time consuming

● Sample – group of people selected to respond to market research questions such as interviews

● Quota sample – People are selected based on certain characteristics (e.g. age, income)

● Secondary Market Research:The collection of information that has already been made available
by others. Second-hand data about consumers and markets is collected from already published
sources.
● Brand name – Unique name of a product that makes it different from other brands
● Benefits of branding – Advertising makes consumer aware of the quality of the product and
persuades them into buying the product
● Brand loyalty is the tendency of customers to keep buying the same brand continuously instead
of switching over to competitors’ products.
● Brand image is an identity given to a product that differentiates it from competitors’ products.

● Price skimming: Setting a high price for a new product that is unique or very different from other
products on the market.
● Penetration pricing: Setting a very low price to attract customers to buy a new product
● Competitive pricing: Setting a price similar to that of competitors’ products which are already
available in the market

● Cost plus pricing: Setting price by adding a fixed amount to the cost of making the product
● Promotional pricing: Setting the price of a few products at below cost to attract customers into
the shop in the hope that they will buy other products as well
● Price Elasticity: The PED of a product refers to the responsiveness of the quantity demanded
for it to changes in its price.
● Promotion: marketing activities used to communicate with customers and potential customers
to inform and persuade them to buy a business’s products.

● Advertising: paid for the communication with potential customers about a product to encourage
them to buy it.

● Marketing Budget:Marketing budget is the financial plan for marketing product/brand for a
period of time
● Marketing Strategy:A plan to combine the right combination of the four elements of the
marketing mix for a product or service to achieve a particular marketing objective.
● Production: is the effective management of resources in producing goods and services.

● Buffer stock (aka safety stock) – inventory to deal with sudden customer demands for a product
or in case supplies doesn’t get delivered on time.

● Lean Production – Term for techniques used by businesses to cut down waste and increase
efficiency.

● Economies of scale are the factors that lead to a reduction in average costs as a business
increases in size.
● Diseconomies of scale are the factors that lead to an increase the average costs of a business as
it grows beyond a certain size.
● Break Even – method for finding out the minimum level of sales needed for a firm to pay for its
total cost.
● When Total cost = Revenue, the business will break even.
● Quality – to produce a good or a service which meets customer expectations.
● Quality Control – Checking for quality at the end of the production process, whether it is a
product or a service.

● Quality Assurance –checking for the quality standards throughout the production process.
● Total Quality Management (TQM) – the continuous improvement of products and processes by
focusing on quality at each stage of production.
● Quality marks: help customers to be assured of a product/service quality.