Business paper 1 IB

Performance related pay

A bonus of increase in salary awarded to an employee for their achievements over a range of criteria. These can relate to sales targets.

Profit centres

A department that incurs both costs and revenues and hence maintains its own profit and loss account allows the business to see the areas that generate the most all least revenue. the accountant recommended to Martin to use this for the hotel restaurant and events

Diversify

A growth strategy where business spreads its risks by expanding into new products and markets, away from its traditional business. Roger Williams founding of them Piero represented diversification away from his existing investment in the primary sector

Human resources planning

A long term plan to ensure that the labour force within the hotel had the correct skills and expertise to carry out it's roles within the business so that it achieves the objectives. Martin devised 2 approaches

Marketing audit

A systematic examination and review of the current position of a firms marketing in terms of strengths and weaknesses as well as well farmstands internal relation to customers and competitors. Martin use this with secondary data to identify the new market for tourist to cater to safaris

bureaucracy

Admin's procedures and rules that have to be followed to complete a task Susan enjoyed This and created a Chain of command

Sole trader

An individual owning and operating a business on his or her own all though she may or may not employ other people for help in running the business. Roger Williams initially operated it as one

Budget

Are detailed financial plan for the future usually involving a cash flow forecast each costing profit centre may be allocated a budget Martin was given a limited budget for renovation

Primary sector

Businesses that are involved with the extraction harvesting and conservation of natural resources e.g. fishing. Roger Williams made a large fortune in this area

Needs

Psychological needs are essential things for all humans they must have to survive. Need to be in the bottom of Maslow's hierarchy of needs

Promotion

Refers to their advancement of an employee in the company hierarchy leading to improve statice, more responsibilities and possibly increased salary. Martin joined the hotel as a receptionist and is now manager

Working capital

Represents the amount of finance available to business for its day to- day operations

Shareholders

Shareholders aka stakeholders are people the owns stakes in a private or public limited company GPs shareholders were from the US Japan and South Korea

Investments

Shares held in other businesses I'll called investment on the balance sheet investments could also be medium to long-term financial assets that business might hold which generate a short time income. Roger Williams would have been tied up in investments in the primary sector. GP invested in the Imperial by purchasing the hotel in 1989

Delegation

The 40 of the task is passed to another person. The person must ensure the task is carried out and completed. Martin believed in delegating to empower employees.

Cost centres

The cost centre is a department which does not generate any revenue yet to which specific costs can be clearly allocated and identified.used to help departments to operate within their budget. Martin was encouraged to establish a cost centre for housekeeping

Margin of safety

The difference between the businesses current level of production and its break even level of output. A positive safety of margin means empirical face lower sales but still be making a profit. GP would help them to determine the margin of safety of the year

Seasonality

The effect of the seasonal variation on a business. The imperial was prone to working capital problems of the seasonality of the hotel

Target profit

The guaranteed minimum of level profit the company must to satisfy the shareholders. The hotel manager and the representative only annually to set targets for the year ahead

Liquidity problems

The inability of the business to meet its short-term debts as seen from its liquidity ratio or acid test ratio. Problems of working capital was creating liquidity problems

Breakeven quantity

The level of output in that generates neither any profit nought lost, shown on the ex axes corresponding to the breakeven point, where total revenue equals total cost.

Liquidity management

The monitoring of liquid assets of the business to ensure that you can always pay its liabilities. Part of the financial problems faced by the Imperial. in its initial years related to liquidity management. Seasonality of the hotel can create this problem

Cash flow

The movement of cash into and out of the business Imperial was facing cash flow issues in the initial years duty cash outflows been greater than Revenue and cash inflows

Recruitment

The process of hiring a suitable worker which would involved a thorough job analysis involving identifying the need for a new employee, defining the job and most appropriate person for that job.

Profits

The surplus left over after all costs are deducted from sales revenue GP expected the hotel manager at the Imperial to generate profits for the investment group

Globalisation

The trend towards free international trade and free movement of capital between countries resulting in the integration of economic social technical and cultural issues of the world economies GP is symbolic of globalisation

Employees

The type of internal stakeholder normally the people who work for business. Their workers who are employed by the hotel to carry out specific tasks within the organisation

Corporate image

The view of a company held by its customers, employees and other major stakeholders, the imperial has a positive corporate image

Position map

This is a visual aid to show customers perceptions or the branded product in relation to others. Price and quality is generally used. Martin use this to identify the business travellers

Dividend

This share of the net profit that company distributes to shareholders. Preference shares usually carry a fixed dividend while ordinary shares a variable dividend depending on the profitability of the company.

Strategic alliance

When two businesses work together in a business venture which is mutually beneficial. Option three Imperial and can Safari will form an alliance

Balance sheet

Parts of final accounts financial statement showing the assets and liabilities of a business at the point in time. Martin had to organise one for GP

Profit and loss account

Parts of final accounts of the business which is a financial statement of the business trading activity over period of time.

Manager

People responsible for the day to day running of the business or department within the business. Martin was appointed as a hotel manager

Market opportunity

Chance for business of expanding into new project and all market. Roger Williams receive the hotel business and underprovided and Hence saw the opportunity in founding the hotel

Reposition

Change the perception of a business from the opinion of its customers. This may be achieved by altering the marketing strategy to change the brand image. Option 1 adopted renovation of image therefore reposition

Marketing challenges

Concerns to a business arising from changes in the target market or from emergence of competitors leading to issues for their market share. the hotel was facing long-term challenges from both

Market share

Percentage of all sales in the market that help I want business. Measured in units sold or value. The Imperial was facing shrinking market share due to new hotels

Scientific approach to decision-making

Facts are collected and logical approach is applied to decision-making in contrast to using intuition and experience

Salary

Fixed amount of remuneration paid to senior staff usually at the end of the month they generally represented as a fixed cost. Martin was paid a salary based on his position and performance

Private limited company

In Inc business that is owned by shareholders with limited liability who shares cannot be offered for sale to the public.

Strategies

Medium to long-term plans on ways of achieving specific objectives. Martin had to design strategies to deal with liquidity problems