Key Business Terms and Definitions (DP IB Business Management): Revision Note
Subject-specific key terms
The pre-release materials include a number of subject-specific key terms that you should be prepared to define and use effectively in your answer
Key Term | Definition | Example |
|---|---|---|
Multinational Company (Line 5) | A business that operates in multiple countries, often with headquarters in one country and factories, offices, or stores in others | Myt PLC has factories on six continents, making it a multinational company |
Internal Growth (Line 8) | Growth that happens when a business expands by increasing sales, opening new stores, or launching new products, rather than merging with or buying other businesses. It is also known as organic growth | Myt expanded its product range from just one drink (root beer) to over 30 different drinks |
External Growth (Line 8) | External growth occurs when a business expands by merging with or acquiring (buying) another business | Myt acquired Lotssa Coffee and Honest Water, growing its business through external growth |
Portfolio (Line 9) | A portfolio is the range of products or services a business offers | By 2020, Myt had built a portfolio of over 30 different drinks, meaning it sells many different types of beverages |
Diversification (Line 16) | When a company expands into new industries or product markets to reduce risk and increase profits | Myt diversified by buying a coffee chain (Lotssa Coffee) and a bottled water company (Honest Water), expanding beyond soft drinks |
Manufacturer (Line 18) | A company that processes, produces and packages a product using raw materials and/or components | Honest Water manufactures bottled drinking water, likely competing with brands like Evian or Dasani |
Modernisation (Line 21) | Updating factories or equipment to improve efficiency, quality, or environmental impact | Myt wants to modernise its factories to make them greener and more sustainable |
Green Factories (Line 21) | Factories that use less energy, produce less waste, and are more environmentally friendly | Myt plans to make its factories greener by using renewable energy or reducing water and plastic waste |
Healthy Snacks Market (Line 22) | The healthy snacks market includes snacks made with natural ingredients, low sugar, or added health benefits | Myt wants to enter the healthy snacks market, possibly by launching low-sugar, high-protein, or organic snacks |
Corporate Social Responsibility (CSR) (Line 25) | A business’s efforts to act ethically and contribute positively to society, such as reducing pollution, treating workers fairly, or supporting charities | Myt plans to improve its CSR, which could mean cutting plastic waste, using ethical sourcing, or supporting local communities |
Additional terminology
The pre-release document lists the following terms that you may want to know
Additional term | Definition | Trends |
|---|---|---|
Avatar | A digital picture or character that represents a person in an online world, such as a website, video game, or virtual meeting | Big soft drink brands use avatars in online marketing and virtual events to connect with customers. E.g. Coca-Cola has experimented with virtual worlds like Second Life, where people could design digital vending machines |
Biodegradable | A biodegradable material can break down naturally into the environment without causing harm, usually with the help of bacteria or fungi | Soft drink companies are looking to reduce plastic waste by using biodegradable materials. Coca-Cola and PepsiCo have introduced plant-based bottles, designed to break down easily. Experts say these bottles need the right conditions to fully biodegrade so recycling is still important |
Chain (of a business) | A group of shops, restaurants, or factories that belong to the same company and sell the same products | Big brands like PepsiCo run large chains of bottling factories and distribution centres to sell drinks worldwide. Delays in shipping and rising costs have made companies rethink this - some soft drinks firms are now setting up local factories to avoid these issues |
Pressure Group | An organisation that tries to influence businesses or governments to change their policies on issues like the environment, human rights, or animal welfare | Greenpeace and other environmental groups have criticised soft drink companies for creating too much plastic waste. Coca-Cola has promised to make its packaging 100% recyclable by 2025 and use more recycled plastic. Activists say companies should move away from plastic and focus on refillable bottles |
Recycling | The process of collecting and reusing materials, like plastic and glass, to make new products instead of throwing them away | Many soft drink companies are working to cut down on waste, e.g. Coca-Cola’s ‘World Without Waste’ plan aims to recycle the same amount of bottles it sells by 2030. Some brands have refill schemes to encourage bottle reuse. European governments are introducing deposit schemes where customers get money back when bottles are returned |
Social Media Influencer | A person who has a big online following and can influence people’s buying decisions by promoting products | Soft drink brands work with influencers on Instagram, TikTok, and YouTube to market their products. Health-focused drinks, like prebiotic sodas Olipop and Poppi, are popularised by influencers recommending them as healthy drinks. However, ‘de-influencing’ encourages people to buy less, which may change brand advertising in future |
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