Business final

Outsourcing

(of a company or organization) to purchase (goods) or subcontract (services) from an outside supplier or source.

80/20 rule

80% of outcomes can be attributed to 20% of the causes for a given event. In business, the 80-20 rule is used to help managers identify problems and determine which operating factors are most important and should receive the most attention based on an efficient use of resources. Resources should be allocated to addressing the input factors have the most effect on a company's final results.

Brand Equity

A brand's power derived from the goodwill and name recognition that it has earned over time, which translates into higher sales volume and higher profit margins against competing brands.

Continuous Flow

A manufacturing process that aims at optimization of throughput using minimum inventory.

Monopolistic Competition

A market structure in which several or many sellers each produce similar, but slightly differentiated products. Each producer can set its price and quantity without affecting the marketplace as a whole.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.

Vertical Merger

A merger between two companies producing different goods or services for one specific finished product.

Flexible production system

A method for producing goods that is readily adaptable to changes in the product being manufactured, in which machines are able to manufacture parts and in the ability to handle varying levels of production. A flexible manufacturing system (FMS) gives manufacturing firms an advantage in a quickly changing manufacturing environment.

Stakeholders

A person, group or organization that has interest or concern in an organization.

Franchise

A privilege granted to make or market a good or service under a patented process or trademarked name. (2) A business operating under such privilege.

Common Stock

A security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debtholders have been paid in full.

Consumer Orientation

A service offered by companies that focuses on the internal and external needs of a business's customers.

Relationship Management

A strategy employed by an organization in which a continuous level of engagement is maintained between the organization and its audience. Relationship management can be between a business and its customers (customer relationship management) and between a business and other businesses (business relationship management).

SWOT Analysis

A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, straightforward model that assesses what an organization can and cannot do as well as its potential opportunities and threats.

Sarbanes-Oxley Act of 2002 (SOX)

An act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. The Sarbanes-Oxley Act (SOX) mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud.

Angel Investors

An investor who provides financial backing for small startups or entrepreneurs. Angel investors are usually found among an entrepreneur's family and friends. The capital they provide can be a one-time injection of seed money or ongoing support to carry the company through difficult times.

Generally accepted accounting principles (GAAP)

Authoritative rules, practices, and conventions meant to provide both broad guidelines and detailed procedures for preparing financial statements and handling specific accounting situations.

Private Enterprise System

Basis of a free market capitalist system, it is a business unit established, owned, and operated by private individuals for profit, instead of by or for any government or its agencies.

Preferred stock

Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation.

Cobranding

Co-branding is the practice of using multiple brand names together on a single product or service.

Supply Chain

Entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer. It comprises of vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who bring the product to the ultimate user.

Dumping

Exporting goods at prices lower than the home-market prices.

Job Shop

Fabrication-outfit specializing in small quantities of custom made parts, produced according to customer specifications.

Business Incubator

Facility established to nurture young (startup) firms during their early months or years. It usually provides affordable space, shared offices and services, hand-on management training, marketing support and, often, access to some form of financing.

Supply Curve

Graph curve that normally slopes upward to the right of the chart (except in case of regressive supply curve), showing quantity of a product (good or service) supplied at different price levels.

Price Elasticity

How consumers react to prices for goods and services.

Quick Ratio

Key measure of a firm's liquidity, it answers the question "Can this firm meet its current obligations from its liquid assets if suddenly all sales stop?"

Marketing Concept

Management philosophy according to which a firm's goals can be best achieved through identification and satisfaction of the customers' stated and unstated needs and wants.

Prestige Pricing

Marketing strategy where prices are set higher than normal because lower prices will hurt instead of helping sales, such as for high-end perfumes, jewelry, clothing, cars, etc. Also called image pricing.

Production Process

Mechanical or chemical steps used to create an object, usually repeated to create multiple units of the same item. Generally involves the use of raw materials, machinery and manpower to create a product.

Horizontal merger

Merger of two or more companies with similar product lines.

Venture Capital

Money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns

Consumer Driven Production System

Offerings, plans, or strategies motivated by customer demand or expectations.

Embargo

Official suspension of import and/or export of some specific or all goods, to or from a specific port, country, or region, for political, health, or labor related reasons, for a specified or indefinite period.

Equilibrium price

Open market price at which the quantity of a product supplied matches the quantity demanded.

Recession

Period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression. Although recessions are considered a normal part of a capitalist economy, there is no unanimity of economists on its causes.

Wholesaler

Person or firm that buys large quantity of goods from various producers or vendors, warehouses them, and resells to retailers.

Logistics

Planning, execution, and control of the procurement, movement, and stationing of personnel, material, and other resources to achieve the objectives of a campaign, plan, project, or strategy. It may be defined as the 'management of inventory in motion and at rest.'

Breakeven Analysis

Study of the mathematical relationship between costs and sales revenue, under a given set of assumptions regarding the firm's fixed costs and variable costs. In this financial analysis, the objective is to determine (in manufacturing) number of products that must be sold at a given price to cover the costs, or (in project financing) number of months or years required by the forecasted total net cash flow to equal estimated total project cost. An integral part of financial planning, it is performed either by using a breakeven-formula or by drawing a breakeven graph.

Guerrilla Marketing

Tactics available to every small firm to compete with bigger firms by carving out narrow but profitable niches. These tactics include (1) extreme specialization, (2) aiming every effort at favorably impressing the customers, (3) providing service that goes beyond the customers' expectations, (4) fast response time, (5) quick turnaround of jobs, and (6) working hours that match the customer's requirements.

Accounting equation

The accounting equation displays that all assets are either financed by borrowing money or paying with the money of the company's shareholders. Thus, the accounting equation is: Assets = Liabilities + Shareholder Equity. The balance sheet is a complex display of this equation, showing that the total assets of a company are equal to the total of liabilities and shareholder equity. Any purchase or sale by an accounting equity has an equal effect on both sides of the equation, or offsetting effects on the same side of the equation. The accounting equation is also written as Liabilities = Assets - Shareholder Equity and Shareholder Equity = Assets - Liabilities.

Acid-test Ratio

The acid-test ratio is a strong indicator of whether a firm has sufficient short-term assets to cover its immediate liabilities. Commonly known as the quick ratio, this metric is more robust than the current ratio, also known as the working capital ratio, since it ignores illiquid assets such as inventory.

Brand loyalty

The extent of the faithfulness of consumers to a particular brand, expressed through their repeat purchases, irrespective of the marketing pressure generated by the competing brands.

Marketing

The management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P's of marketing: (1) identification, selection and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy.

Mass Production System

The manufacturing of large quantities of standardized products, frequently utilizing assembly line technology.

Accounting cycle

The name given to the collective process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements.

Market Segmentation

The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.

Form Utility

The process of increasing the attractiveness of a product to a group of consumers by altering its physical appearance. In a business context, form utility might involve making a product ready for consumption by converting it to a form that is more beneficial to consumers than the raw materials used to make it.

Public Relations

The profession or practice of creating and maintaining goodwill of an organization's various publics (customers, employees, investors, suppliers, etc.), usually through publicity and other nonpaid forms of communication.

Institutional advertising

The promotional message aimed at creating an image, enhancing reputation, building goodwill, or advocating an idea or the philosophy of an organization, instead of sales promotion. When employed by an organization to market itself (instead of its products), it is called corporate advertising.

World Trade Orginization

UN multilateral trade organization formed on January 1, 1995 (after culmination of the Uruguay Round) as the successor to GATT and the court of final settlement in trade disputes. Its objectives included (1) removal of all barriers to international trade in goods, services, and intellectual property, (2) equitable and speedy resolution of disputes between trading partners, and (3) identification of non-compliance with trade agreements.

International Monetary Fund (IMF)

UN specialized agency established in 1944 under Bretton Woods system to help prevent unstable exchange rates and competitive devaluations of pre-Second World War Western economies. Focused on preventing crises in international monetary system via (1) surveillance through monitoring of national economies and economic policies, (2) medium-term loans to tide over balance-of-payment problems, and (3) technical assistance in formulating and administering monetary, exchange rate, and taxation policies, central bank operations, etc.

Brand

Unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors.

Time Utility

Utility of a good or service created by its availability at a particular time.

Robots

a machine that resembles a human and does mechanical, routine tasks on command.

Retailer

a person or business that sells goods to the public in relatively small quantities for use or consumption rather than for resale

Product Placement

a practice in which manufacturers of goods or providers of a service gain exposure for their products by paying for them to be featured in movies and television programs

Assembly line

a series of workers and machines in a factory by which a succession of identical items is progressively assembled

Trademark

a symbol, word, or words legally registered or established by use as representing a company or product

Sustainable

able to be maintained at a certain rate or level

Ownership Utility

consideration how consumers feel about a product, the convenience of purchasing the product and obtaining the product when they want it. Ads by Google

EBITDA

earnings before interest, taxes, depreciation, and amortization

Total Asset Turnover

financial ratio that indicates the effectiveness with which a firm's management uses its assets to generate sales. A relatively high ratio tends to reflect intensive use of assets. Total asset turnover is calculated by dividing the firm's annual sales by its total assets.

Exchange process

in marketing, the relationship between buyer and seller. The seller offers benefits (brands) in exchange for other benefits (money).

Equity Financing

method of financing in which a company issues shares of its stock and receives money in return.

Skunkworks

small group of people who work on a project in an unconventional way. The group's purpose is to develop something quickly with minimal management constraints. Skunkworks are often used to initially roll out a product or service that thereafter will be developed according to usual business processes.

Computer Aided Design (CAD)

software is used by architects, engineers, drafters, artists, and others to create precision drawings or technical illustrations. CAD software can be used to create two-dimensional (2-D) drawings or three-dimensional (3-D) models.

Computer Aided Manufacturing (CAM)

software used to design products such as electronic circuit boards in computers and other devices.

Product Advertising

the advertising of a particular named product, not the company which makes it

Cause Advertising

the cooperative effort between a for-profit and a non-profit for their mutual benefit - gives people the opportunity and knowledge they need to help. Profit-generating, powerful global brands have the resources to raise awareness of nonprofit organizations, while also promoting their product.

Competitive Differentiation

the focus of competitive differentiation is to set your company apart from the competition, or potential competition if you are a startup company. As a startup company, it's important to determine what makes your offerings different, faster, cheaper, and/or better than your competition

Oligopoly

the market condition that exists when there are few sellers, as a result of which they can greatly influence price and other market factors.

Offshoring

the practice of moving employees or certain business activities to foreign countries as a way to lower costs, avoid taxes, etc.

Nearshoring

the practice of moving one's employees or business activities from a distant country back to a country that is nearby

Place Utility

the value consumers put on where they purchase products. Stores make it easier for the consumers to purchase items, as opposed to driving to a factory or warehouse where the products are manufactured or stored. Consumers find what they need in a place conveniently located near home or work.

Batch

​people or things ​dealt with as a ​group or at the same ​time: