Business Definitions

Adverse variance
A difference between actual and budgeted amounts which is bad news – e.g. higher than budgeted costs
Advertising
Paid-for communication, aimed at informing or persuading
Assessment centres
Where a recruiting firm runs a series of extended selection procedures, each lasting one or two days or sometimes longer
Automation
The replacement of workers with machines to perform task in production
Boston Matrix
A model which analyses the product portfolio of a business into four categories (stars, cash cows, problem children and dogs)
Branding
The use of a trade name, symbol, logo or other device to differentiate a product or service
Budget
A detailed plan of income and expenses expected over a certain period of time
Business to business
Abbreviated to B2B, business-to-business involves the selling or products and services by one business directly to another
Capacity utilisation
The proportion of total capacity that is used (expressed as a percentage)
Communication
The process of exchanging information or ideas between individuals or groups
Competition
The businesses that compete for a share of a market
Competitiveness
The ability of a business to offer a better product than competitors (as measured by customers)
Cost reduction
Actions taken by a business aimed at reducing total costs, or lowering average unit costs
Customer expectations
What customers expect to receive as a result of buying a good or service; influenced by perceptions of factors such as quality and price
Customer service
The ways in which a business meets the needs and wants of its customers
Delegation
Where responsibility for carrying out a task or role is passed onto someone else in the business.
Direct selling
A method of distribution which involves a business transacting with a customer without the use of intermediaries
Distribution channel
How a business gets its products to the end consumer (with or without the use of intermediaries)
Empowerment