1. Business Environment Key Terms
The Basics
• Consumer: A person who uses goods and services.
• Customer: A person who buys products and services.
• Market: Where buyers and sellers come together to exchange goods or services for money.
• Entrepreneur: A person who is willing to take a risk by investing money into a business, organising the re-
sources and hoping to make a profit. E.g Richard Branson.
• Factors of Production: These are the resources needed to produce goods or services. Land, Labour, Capi-
tal & Enterprise
• Needs: Goods or services essential for living.
• Wants: Goods or services which people would like to have but which are not essential for living.
• Private Sector: Businesses not owned by the state (government) but by individuals or groups of individuals.
• Public Sector: Organisations where the activities are carried out either by national or local government.
• Chain of Production: The stages through which a product will pass during production.
• Primary Sector: Industries which extract natural resources. E.g farming, oil drilling & mining.
• Secondary Sector: Industries which manufacture, assemble, process and construct goods.
• Tertiary Sector: Industries which provide services both to individuals and other sectors of industry.
Business Environment Key Terms
The Basics
• Consumer: A person who uses goods and services.
• Customer: A person who buys products and services.
• Market: Where buyers and sellers come together to exchange goods or services for money.
• Entrepreneur: A person who is willing to take a risk by investing money into a business, organising the re-
sources and hoping to make a profit. E.g Richard Branson.
• Factors of Production: These are the resources needed to produce goods or services. Land, Labour, Capi-
tal & Enterprise
• Needs: Goods or services essential for living.
• Wants: Goods or services which people would like to have but which are not essential for living.
• Private Sector: Businesses not owned by the state (government) but by individuals or groups of individuals.
• Public Sector: Organisations where the activities are carried out either by national or local government.
• Chain of Production: The stages through which a product will pass during production.
• Primary Sector: Industries which extract natural resources. E.g farming, oil drilling & mining.
• Secondary Sector: Industries which manufacture, assemble, process and construct goods.
• Tertiary Sector: Industries which provide services both to individuals and other sectors of industry.

2. Business Environment Key Terms
International
• Exchange Rate: The price or value of one currency compared to another.
• Exports: Goods and services sold to other countries.
• Imports: The purchase of goods or services from overseas.
• Globalisation: The increase in worldwide competition between businesses
• Multinational: A firm that operates in more than one country.
A Bit More
• Market Leader: The number one firm in the market for a particular product
measured by its percentage share of the market.
• Market Share: The proportion of the total sales of a product that has been
gained by a brand or company.
• Maximisation: Making the most of something.
• Monopoly: A business which controls the market for a product.
• Opportunity Cost: The cost of the alternative that has to be given up when a choice is made.
• Subsidy: An amount granted to a business to help them keep trading or to keep prices down.
• Suppliers: Individuals and organisations that sell goods and services to a business.
• PEST: An analysis of the business environment by identifying political, economic, social and technological
factors.
• Economies of Scale: These are the advantages of producing large quantities of output. These should help
the firm to reduce unit costs.
• Enterprise Zone: A small area usually with high unemployment given special help by the government to at-
tract new business and industry to locate there. E.g. Kingsway Business Park.
• Infrastructure: Transport and communication networks.
Business Environment Key Terms
International
• Exchange Rate: The price or value of one currency compared to another.
• Exports: Goods and services sold to other countries.
• Imports: The purchase of goods or services from overseas.
• Globalisation: The increase in worldwide competition between businesses
• Multinational: A firm that operates in more than one country.
A Bit More
• Market Leader: The number one firm in the market for a particular product
measured by its percentage share of the market.
• Market Share: The proportion of the total sales of a product that has been
gained by a brand or company.
• Maximisation: Making the most of something.
• Monopoly: A business which controls the market for a product.
• Opportunity Cost: The cost of the alternative that has to be given up when a choice is made.
• Subsidy: An amount granted to a business to help them keep trading or to keep prices down.
• Suppliers: Individuals and organisations that sell goods and services to a business.
• PEST: An analysis of the business environment by identifying political, economic, social and technological
factors.
• Economies of Scale: These are the advantages of producing large quantities of output. These should help
the firm to reduce unit costs.
• Enterprise Zone: A small area usually with high unemployment given special help by the government to at-
tract new business and industry to locate there. E.g. Kingsway Business Park.
• Infrastructure: Transport and communication networks.