Essential Business Concepts and Terminology
Adding Value
A process through which a business increases the worth of the resources included in production so that customers perceive the product to be worth more than the cost of the inputs.
Advisor
An external contact of a business that provides support and advice, sometimes for free.
Aims
Long-term goals a business can work towards.
Bank Loan
A fixed amount loan from a bank which is generally used to finance long-term assets.
Bank Overdraft
Borrowings from a bank on a current account which are payable
Read MoreEconomics, Money, and Trade: Key Concepts and Theories
Institutions
Social arrangements created to satisfy long-term needs. Adam Smith studied various institutions, including language, morals, justice, property rights, division of labor, money, and markets. He believed that in times of commercial interdependence, a laissez-faire (let alone) policy was the most appropriate approach for governing authorities.
Economics
The social science that studies the production, distribution, and consumption of goods and services.
Money
Any object or record accepted as
Read MoreUnderstanding Globalisation, Development, and Economic Indicators
Globalisation: Advantages and Disadvantages
Today, goods are made and sold all over the world, thanks to globalisation. We are interconnected.
- Companies buy cheap goods from other countries (underdeveloped countries).
- Larger market access.
- Job creation.
- Cheaper products for consumers (e.g., from China).
Disadvantages of Globalisation
- Unemployment in some countries because companies move their factories to places with cheaper labor.
- Increased environmental problems, as underdeveloped countries often have
Effective Communication and Distribution Strategies
Communication
The set of activities aimed at increasing sales seeks to highlight the product, enhance corporate image, and encourage purchases. This is performed using different communication techniques:
- Advertising
- Sales Promotion
- Personal Selling
- Public Relations
- Merchandising
Advertising
Transmitting a message to inform about a product, on one hand, and later persuade the consumer to purchase it through a communication medium.
- Mailing: More personalized.
- Advertising Campaign: Usually performed by advertising
Understanding Market Dynamics: Supply, Demand, and Pricing
Item 3: Market Fundamentals
A market is a set of offers of certain goods or services, which are accompanied by their corresponding demands.
Demand
Demand is the amount of an asset that a potential buyer (applicant) would be willing to buy at a specified price during a certain period.
Four factors influencing demand:
- Price of the good
- Applicant’s income level
- Prices of other related goods
- Consumer preferences
The demand curve is a graphical representation of the relationship between the price of goods and
Read MoreUnderstanding Company Classifications and Resources
Company Definitions and Classifications
Company: An organization or group performing commercial and industrial activities that provide goods and services to maintain and improve the quality of life of commercial law personas. According to commercial law, companies are defined as industrial, commercial, services, and related entities, engaging in what are called commercial acts.
Classification of Companies
According to Their Activity:
- Agriculture: Exploits agricultural and livestock products (livestock,