Key terms business environment

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Key terms business environment

  1. 1. Business Environment Key Terms The Basics • Consumer: A person who uses goods and services. • Customer: A person who buys products and services. • Market: Where buyers and sellers come together to exchange goods or services for money. • Entrepreneur: A person who is willing to take a risk by investing money into a business, organising the re- sources and hoping to make a profit. E.g Richard Branson. • Factors of Production: These are the resources needed to produce goods or services. Land, Labour, Capi- tal & Enterprise • Needs: Goods or services essential for living. • Wants: Goods or services which people would like to have but which are not essential for living. • Private Sector: Businesses not owned by the state (government) but by individuals or groups of individuals. • Public Sector: Organisations where the activities are carried out either by national or local government. • Chain of Production: The stages through which a product will pass during production. • Primary Sector: Industries which extract natural resources. E.g farming, oil drilling & mining. • Secondary Sector: Industries which manufacture, assemble, process and construct goods. • Tertiary Sector: Industries which provide services both to individuals and other sectors of industry. Business Environment Key Terms The Basics • Consumer: A person who uses goods and services. • Customer: A person who buys products and services. • Market: Where buyers and sellers come together to exchange goods or services for money. • Entrepreneur: A person who is willing to take a risk by investing money into a business, organising the re- sources and hoping to make a profit. E.g Richard Branson. • Factors of Production: These are the resources needed to produce goods or services. Land, Labour, Capi- tal & Enterprise • Needs: Goods or services essential for living. • Wants: Goods or services which people would like to have but which are not essential for living. • Private Sector: Businesses not owned by the state (government) but by individuals or groups of individuals. • Public Sector: Organisations where the activities are carried out either by national or local government. • Chain of Production: The stages through which a product will pass during production. • Primary Sector: Industries which extract natural resources. E.g farming, oil drilling & mining. • Secondary Sector: Industries which manufacture, assemble, process and construct goods. • Tertiary Sector: Industries which provide services both to individuals and other sectors of industry.
  2. 2. Business Environment Key Terms International • Exchange Rate: The price or value of one currency compared to another. • Exports: Goods and services sold to other countries. • Imports: The purchase of goods or services from overseas. • Globalisation: The increase in worldwide competition between businesses • Multinational: A firm that operates in more than one country. A Bit More • Market Leader: The number one firm in the market for a particular product measured by its percentage share of the market. • Market Share: The proportion of the total sales of a product that has been gained by a brand or company. • Maximisation: Making the most of something. • Monopoly: A business which controls the market for a product. • Opportunity Cost: The cost of the alternative that has to be given up when a choice is made. • Subsidy: An amount granted to a business to help them keep trading or to keep prices down. • Suppliers: Individuals and organisations that sell goods and services to a business. • PEST: An analysis of the business environment by identifying political, economic, social and technological factors. • Economies of Scale: These are the advantages of producing large quantities of output. These should help the firm to reduce unit costs. • Enterprise Zone: A small area usually with high unemployment given special help by the government to at- tract new business and industry to locate there. E.g. Kingsway Business Park. • Infrastructure: Transport and communication networks. Business Environment Key Terms International • Exchange Rate: The price or value of one currency compared to another. • Exports: Goods and services sold to other countries. • Imports: The purchase of goods or services from overseas. • Globalisation: The increase in worldwide competition between businesses • Multinational: A firm that operates in more than one country. A Bit More • Market Leader: The number one firm in the market for a particular product measured by its percentage share of the market. • Market Share: The proportion of the total sales of a product that has been gained by a brand or company. • Maximisation: Making the most of something. • Monopoly: A business which controls the market for a product. • Opportunity Cost: The cost of the alternative that has to be given up when a choice is made. • Subsidy: An amount granted to a business to help them keep trading or to keep prices down. • Suppliers: Individuals and organisations that sell goods and services to a business. • PEST: An analysis of the business environment by identifying political, economic, social and technological factors. • Economies of Scale: These are the advantages of producing large quantities of output. These should help the firm to reduce unit costs. • Enterprise Zone: A small area usually with high unemployment given special help by the government to at- tract new business and industry to locate there. E.g. Kingsway Business Park. • Infrastructure: Transport and communication networks.

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