IB Business and Management SL and HL definitions 2023

IB Business and Management SL and HL definitions 2023 above-the-line promotion - Answer-a form of promotion that is undertaken by a business by paying for communication with consumers, e.g. advertising acid test ratio - Answer-liquid assets - current liabilities accountability - Answer-the obligation of an individual to account for his or her activities and to disclose results in a transparent way adverse variance - Answer-exists when the difference between the budgeted and actual figure leads to a lower than expected profit advertising elasticity - Answer-measures the responsiveness of demand for a product following a change in the advertising spending on it agent - Answer-business with the authority to act on behalf of another firm, e.g. to market its products annual forecasted net cash flow - Answer-forecasted cash inflow/forecasted cash outflows Ansoff's matrix - Answer-a model used to show the degree of risk associated with the four growth strategies of market penetration, market development, product development and diversification arbitration - Answer-resolving an industrial dispute by using an independent third party to judge and recommend an appropriate solution asset-led marketing - Answer-an approach to marketing that bases strategy on the firm's existing strengths and assets instead of purely on what the customer wants assets - Answer-items of monetary value that are owned by a business autocratic leadership - Answer-a style of leadership that keeps all decision-making at the centre of the organisation average rate of return (ARR) - Answer-measures the annual profitability of an investment as a percentage of the initial investment backward vertical integration - Answer-integration with a business in the same industry but a supplier of the existing business bad debt - Answer-unpaid customers' bills that are now very unlikely to ever be paid balance sheet - Answer-an accounting statement that records the values of a business's assets, liabilities and shareholders' equity at one point in time batch production - Answer-producing a limited number of identical products - each item in the batch passes through one stage of production before passing on to the next stage below-the-line promotion - Answer-promotion that is not a directly paid-for means of communication but based on short-term incentives to purchase, e.g. sales promotion techniques benchmarking - Answer-comparing the performance - including quality - of a business with performance standards throughout the industry Boston Matrix - Answer-a method of analysing the product portfolio of a business in terms of market share and market growth brand - Answer-an identifying symbol, name, image or trade mark that distinguishes a product from its competitors brand awareness - Answer-extent to which a brand is recognised by potential customers and is correctly associated with a particular product - can be expressed as a percentage of the target market brand development - Answer-measures the infiltration of a product's sales, usually per thousand population. If 100 people in1000 buy a product, it has a brand development of 10 brand loyalty - Answer-the faithfulness of consumers to a particular brand as shown by their repeat purchases irrespective of the marketing pressure from competing brands break-even point of production - Answer-the level of output at which total costs equal total revenue break-even revenue - Answer-the amount of revenue needed to cover both fixed and variable costs so that the business breaks even budget - Answer-a detailed financial plan for the future budget holder - Answer-individual responsible for the initial setting and achievement of a budget buffer stocks - Answer-the minimum stocks that should be held to ensure that production could still take place should a delay in delivery occur or production rates increase bureaucracy - Answer-an organisational system with standardised procedures and rules business plan - Answer-a written document that describes a business, its objectives and its strategies, the market it is in and its financial forecasts business process outsourcing (BPO) - Answer-a form of outsourcing which uses a third party to take responsibility for certain business functions, such as human resources and finance business process re-engineering - Answer-Fundamentally rethinking and redesigning the processes of a business to achieve a dramatic improvement in performance business strategy - Answer-a long-term plan of action for the whole organisation, designed to meet the needs of markets and to fulfil stakeholder expectations capacity shortage - Answer-when the demand for a business's products exceeds production capacity capacity utilisation - Answer-the proportion of maximum output capacity currently being achieved capital employed - Answer-(non-current assets + current assets) current liabilities OR non-current liabilities + shareholders equity capital goods - Answer-physical goods that are used by industry to aid in the production of other goods and services, such as machines and commercial vehicles cash flow - Answer-the sum of cash payments to a business (inflows)less the sum of cash payments made by it (outflows) cash inflows - Answer-payments in cash received by a business, such as those from customers (debtors) or from the bank, e.g. receiving a loan cash-flow forecast - Answer-estimate of a firm's future cash inflows and outflows cell production - Answer-splitting flow production into self-contained groups that are responsible for whole work units centralisation - Answer-keeping all of the important decision making powers within head office or the centre of the organisation chain of command - Answer-this is the route through which authority is passed down an organisation - from the chief executive and the board of directors change management - Answer-planning, implementing, controlling and reviewing the movement of an organisation from its current state to a new one Continues...