Business activity
The process of producing goods and services to satisfy customer needs and wants.
Business / DEFINITIONS
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Primary sector
The part of the economy that involves extracting natural resources.
Secondary sector
The part of the economy that involves manufacturing and construction.
Tertiary sector
The part of the economy that provides services.
De-industrialisation
The decline in manufacturing and a shift towards the service sector.
Business plan
A document that outlines a company’s objectives and how it aims to achieve them.
Entrepreneur
An individual who takes risks to start and manage a business.
Stakeholders
Individuals or groups affected by a business’s decisions, such as employees, customers, and shareholders.
Recruitment
The process of attracting and selecting candidates for a job.
Selection
The process of choosing the most suitable candidate for a job.
Training
The process of improving employees' skills and knowledge.
Motivation
Factors that encourage employees to work effectively.
Financial motivation
Financial incentives such as wages and bonuses.
Non-financial motivation
Non-financial incentives such as career development and recognition.
Market research
The process of gathering and analysing information about consumers and competitors.
Market segmentation
Dividing customers into groups based on characteristics like age or income.
Target market
The group of customers a business aims to serve.
Marketing mix (4 Ps)
The combination of product, price, place, and promotion used to market a product.
Product
The goods or services offered by a business.
Price
The amount charged for a product.
Place
The method used to distribute products to consumers.
Promotion
The activities used to advertise and attract customers.
Product life cycle
The stages a product goes through from introduction to decline.
Branding
The process of creating a unique identity for a product.
Penetration pricing
A pricing strategy where a low initial price is set to attract customers.
Price skimming
A pricing strategy where a high initial price is set for new or innovative products.
Distribution channels
The methods businesses use to deliver goods to consumers.
Revenue
The total income from sales.
Costs
The expenses incurred in running a business.
Profit
The difference between revenue and costs.
Break-even point
The level of output where total revenue equals total costs.
Cash flow
The movement of money in and out of a business.
Liquidity
The ability of a business to meet short-term debts.
Internal sources of finance
Finance obtained from within the business, such as retained profit.
External sources of finance
Finance obtained from outside the business, such as bank loans.
Job production
A production method where individual, custom products are made.
Batch production
A production method where a set number of identical products are made at a time.
Flow production
A continuous production method where goods are mass-produced on an assembly line.
Lean production
A production method that minimizes waste while maintaining efficiency.
Just-in-time (JIT)
A stock control system where materials are ordered only when needed to reduce costs.
Quality control
The process of ensuring that products meet required standards before being sold.
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