1.5 Flashcards

1
Q

Question:
What is a stakeholder in the context of a business?

A

Answer:
A stakeholder in business refers to individuals or groups who are affected by or have an impact on the actions of the business.

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2
Q

Question:
Why is it important for a business to consider the needs and interests of its stakeholders?

A

Answer:
Considering stakeholders’ needs and interests is crucial for a business to operate successfully and ensure long-term success.

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3
Q

Who are shareholders in a business, and what is their primary objective?

A

Answer:
Shareholders are individuals or entities owning a portion of a company’s stock. Their primary objective is to maximize returns on their investment

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4
Q

Question:
What are the primary objectives of employees in a business?

A

Answer:
Employees aim to earn a living, have job security, and be compensated fairly for their work while maintaining a safe working environment

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5
Q

Question:
What is the primary objective of managers in a business?

A

Answer:
Managers aim to meet the company’s goals and objectives by maximizing profits, minimizing costs, and ensuring efficient operations.

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6
Q

Question:
Who are suppliers, and what is their primary objective in relation to a business?

A

Answer:
Suppliers are individuals or businesses providing goods or services to a business. Their primary objective is to sell their products or services and make a profit.

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7
Q

Question:
What are the main objectives of customers when dealing with a business?

A

Answer:
Customers seek high-quality products or services at a fair price, along with good customer service and a positive overall experience.

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8
Q

Question:
What is the primary objective of pressure groups concerning businesses?

A

Answer:
Pressure groups aim to influence the policies and actions of businesses or governments to promote specific causes or agendas.

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9
Q

Question:
Why is the local community considered a stakeholder in a business?

A

Answer:
The local community, comprising individuals and organizations in the business area, is a stakeholder with the primary objective of wanting the business to have a positive impact on the community.

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10
Q

Question:
What is the role of the government as a stakeholder in a business, and what is their primary objective?

A

Answer:
The government is responsible for creating and enforcing laws and regulations affecting businesses, with the primary objective of promoting the public good and protecting citizens’ interests.

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11
Q

Question:
What types of technology do businesses commonly use to improve communications, lower operating costs, and enhance their brand image?

A

Answer:
Businesses have access to various technologies, including e-commerce, contactless payment systems (e.g., Apple Pay, Android Pay), social media, and digital communications tools.

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12
Q

Question:
How does e-commerce influence business activity, particularly in terms of sales, costs, and the marketing mix?

A

Answer:
E-commerce serves as a powerful tool for expanding customer bases and increasing sales. It also helps reduce costs by eliminating physical storefronts. In the marketing mix, it provides new channels for advertising and promotion.

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13
Q

Question:
How do contactless payment systems, such as Apple Pay and Android Pay, impact businesses?

A

Answer:
Contactless payment systems make transactions more convenient for customers, potentially giving businesses a competitive advantage. However, the installation of such systems incurs a cost for the business.

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14
Q

Question:
In what ways does technology influence sales, costs, and the marketing mix for businesses?

A

Answer:
Technology, such as e-commerce, social media, and digital communications, plays a significant role in expanding sales, lowering costs, and transforming the marketing mix by providing new channels for advertising and communication.

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15
Q

Question:
How has e-commerce impacted costs and the marketing mix for businesses like Zappos and Amazon?

A

Answer:
E-commerce has allowed businesses like Zappos to save on operating expenses by eliminating physical call centers. Amazon, through e-commerce, expanded its global market reach. In the marketing mix, platforms like Shopify offer customizable storefronts and advertising capabilities.

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16
Q

Question:
How does social media influence sales and advertising for businesses like Glossier and Wendy’s?

.

A

Answer:
Social media, as demonstrated by Glossier, builds relationships and generates leads, increasing sales. Wendy’s has utilized social media as a cost-effective alternative to traditional advertising channels. Social media also transforms the marketing mix by providing new channels for brand awareness and customer engagement

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17
Q

Question:
How do digital communications, including email marketing and tools like WhatsApp, impact businesses?

A

Answer:
Digital communications offer businesses new channels for reaching customers and closing deals, such as email marketing. It provides a cost-effective alternative to traditional communication channels, as seen with WhatsApp in customer service. The marketing mix is transformed with tools like Mailchimp, offering customizable email templates and sales tools.

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18
Q

Question:
What does legislation refer to, and how does it impact businesses?

A

Answer:
Legislation refers to laws and regulations passed by governments that dictate how businesses and individuals must conduct their behavior. While following existing laws is usually straightforward, changes in laws may necessitate significant operational adjustments, potentially increasing costs for businesses.

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19
Q

Question:
What are the three key areas of legislation that have significant impacts on businesses?

A

Answer:
The three areas are consumer protection, employee protection, and health and safety legislation (which can be included under employee protection).

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20
Q

Question:
What is the primary aim of consumer protection legislation, and what areas does it cover?

A

Answer:
Consumer protection legislation aims to ensure fair treatment of consumers by companies. It covers product safety, standard and quality, customer rights in case of dissatisfaction, and required product information. Compliance with these laws increases business expenditure, potentially reducing profitability.

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21
Q

Question:
What are the effects on businesses when complying with consumer protection laws?

A

Answer:
Complying with consumer protection laws results in increased business expenditure, impacting profitability. However, it creates a level playing field for businesses, preventing unfair advantages through shortcuts or false claims about products.

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22
Q

Question:
What is the aim of employee protection legislation, and what areas does it cover?

A

Answer:
Employee protection legislation aims to prevent worker exploitation. It covers pay, working conditions, equality of employment rights (e.g., for marginalized groups), the right to belong to a trade union, and the ability to take industrial action.

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23
Q

Question:
What benefits can businesses derive from meeting employee protection legislation?

A

Answer:
Meeting employee legislation helps businesses avoid unwanted media attention, reduces the likelihood of legal action, and attracts new employees who are likely to be drawn to businesses fulfilling their legal obligations.

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24
Q

Question:
What does health and safety legislation require businesses to prioritize, and which stakeholders does it aim to protect?

A

Answer:
Health and safety legislation mandates businesses to prioritize the physical and mental well-being of employees, contractors, and customers.

25
Q

Question:
What specific areas does health and safety legislation cover for businesses?

A

Answer:
Health and safety legislation covers aspects such as providing adequate breaks, controlling temperature and noise levels, ensuring safety equipment availability, maintaining hygienic conditions, and preventing stress.

26
Q

Question:
What financial and time costs are associated with implementing health and safety procedures and equipment?

A

Answer:
Implementing health and safety procedures incurs costs such as staff training, supervision, changes to working hours, provision of manuals and signage, purchase and maintenance of safety equipment, and the creation and implementation of a code of practice.

27
Q

What are the potential consequences for businesses that commit serious health and safety breaches?

A

Serious health and safety breaches can lead to fines, investigation by the Health and Safety Executive, and in some cases, prosecution.

28
Q

Question:
What does the economic climate refer to, and how is it measured?

A

Answer:
The economic climate refers to the overall performance of the UK economy, measured by changes in GDP growth.

29
Q

Question:
What are the potential effects on various economic factors when GDP growth is increasing?

A

Answer:
Increasing GDP growth may lead to rising incomes, increased spending on goods/services, potential inflation growth, and a decrease in unemployment.

30
Q

Question:
What are the potential effects on various economic factors when GDP growth is decreasing?

A

Answer:
Decreasing GDP growth may result in falling incomes, reduced spending on goods/services, potential inflation decline, and an increase in unemployment.

31
Q

Question:
How do economic changes present opportunities and threats to businesses?

A

Answer:
Economic changes can offer significant opportunities or pose threats to businesses. Adapting and responding to changing economic variables is crucial for maximizing success.

32
Q

Question:
What economic variables do businesses need to consider and respond to?

A

Answer:
Businesses need to consider changes to inflation, unemployment, exchange rates, household income, interest rates, and government taxation.

33
Q

Question:
How does changes in household income affect businesses, particularly those selling different types of goods?

A

Answer:
Rising household income may lead to increased demand for normal goods and luxuries, while falling household income may boost demand for inferior goods.

34
Q

Question:
What is inflation, and how does it impact businesses?

A

Answer:
Inflation is the general rise in prices in an economy over time. It impacts businesses by influencing costs and pricing strategies

35
Q

What recent trend has the UK experienced regarding inflation, and how has it impacted the economy?

A

Answer:
The UK has recently seen rapidly increasing levels of inflation, causing disruptions in the economy, with workers striking to secure higher wages.

36
Q

Question:
What challenges do businesses face due to inflation?

A

Answer:
Business challenges caused by inflation include increased costs, higher loan repayments, changes in consumer spending habits, increased demand for higher wages, rising costs of raw materials, more expensive utilities, and higher interest rates affecting business borrowing.

37
Q

Question:
Why are exchange rates important for businesses, especially those involved in importing and exporting?

A

Answer:
Exchange rates are crucial for businesses that import raw materials and components and for those that export products, as they influence costs and competitiveness in the global market.

38
Q

Question:
What happens to exporting and importing businesses when the value of the currency appreciates?

A

Answer:

Exporting Businesses: Sales may fall as products become more expensive overseas. To stay competitive, businesses might need to lower prices, accepting lower profit margins.

Importing Businesses: Costs may fall as overseas raw materials become cheaper.

39
Q

Question:
What happens to exporting and importing businesses when the value of the currency depreciates?

A

Answer:

Exporting Businesses: Sales may rise as products become cheaper overseas.
Importing Businesses: Costs may rise as overseas raw materials become more expensive. Businesses might seek domestic suppliers to reduce costs.

40
Q

Question:
What does the interest rate represent, and how does it impact businesses?

A

Answer:
The interest rate represents the percentage reward for saving and the percentage charged for borrowing. Rising interest rates increase loan repayments for businesses, potentially reducing capital investments and customer purchases on credit

41
Q

Question:
How does an increase in interest rates affect businesses in terms of loan repayments, capital investments, and customer purchases?

A

Answer:

Loan Repayments: Businesses pay more on loan repayments, increasing costs.

Capital Investments: Businesses may be less willing to make capital investments, choosing to save money.

Customer Purchases: Customers are less likely to make purchases on credit when interest rates are high, leading to a fall in sales.

42
Q

Question:
How do changes in taxation impact revenue, costs, and business decisions?

A

Answer:

Revenue: Increased income tax and VAT may lead to a fall in revenue as disposable income decreases, and products become more expensive.

Costs: Business costs rise with increased taxes, potentially offset by charging higher prices, leading to lower sales and profits.

Business Decisions: Operational decisions may be affected by increases in business rates and employment-related taxes, influencing business improvement, relocation, or employment decisions.

43
Q

Question:
How does the unemployment rate impact labor costs for businesses?

A

Answer:

Skilled Workers: As the unemployment rate falls, businesses may have to pay more to secure skilled workers.

Unskilled Workers: Similarly, as the unemployment rate falls, businesses may have to pay more to secure unskilled workers.

Labor Costs: Generally, the higher the unemployment rate, the cheaper businesses can secure labor, directly impacting the profitability of the business.

44
Q

Question:
How may businesses respond to changes in technology, legislation, and the economic climate?

A

Answer:
Businesses have a variety of responses to external influences, including adopting new technologies, adapting to legislative changes, and adjusting strategies based on economic climate shifts

45
Q

Question:
Why do business responses to external influences vary?

A

Answer:
Responses vary from business to business based on individual circumstances and objectives. Each business assesses external influences differently, leading to diverse strategies.

46
Q

Question:
What is the key to effectively responding to external influences?

A

Answer:
The key is for businesses to stay aware of external influences and adopt a proactive approach in responding to them. This involves staying informed, anticipating changes, and taking strategic actions to navigate external challenges.

47
Q

Question:
How can businesses respond to changes in technology?

A

Answer:
Businesses can respond to changes in technology by investing in new technology to improve products, reduce costs, increase efficiency, or expand their reach. They may also partner with tech companies for expertise and resources and train employees to use new technologies effectively.

48
Q

Question:
How can businesses respond to changes in legislation?

A

Answer:
Businesses can respond to changes in legislation by complying with new regulations, potentially adjusting operations. They may also lobby policymakers through trade associations or directly, seeking legal advice to navigate changes and ensure compliance.

49
Q

Question:
How can businesses respond to changes in the economic climate?

A

Answer:
Businesses can respond to changes in the economic climate by diversifying products/services to reduce reliance on a single market, cutting costs through staff reductions or operational streamlining, and seeking finance from lenders or investors to weather economic downturns or fund growth opportunities.

50
Q

business stakeholders

A

owners
employees
customers
government
suppliers
managers
local community
pressure groups

51
Q

e-commerce

A

trade of goods/services over the internet

52
Q

social media

A

websites and applications that allow users to create and share content or to participate in social networking

53
Q

digital comms

A

use of digital technologies to exchange information, ideas, and messages

54
Q

payment systems

A

technologies used to process and manage financial transitions including credit card payments, bank transfers and mobile payments

55
Q

impacts of employee legislation

A

compliance costs
higher labour costs
potential penalties and rewards
changing working practices

56
Q

impact of employee protection legislation - changing working practices

A
  • recruitment and selection procedures requires regular review
  • working conditions may require improvements to be compliant with the law
  • trade unions may need to be accommodated in discussions
57
Q

impact of employee protection legislation - potential penalties and rewards

A
  • fines may be issued and business reputation damaged if employment laws are broken
  • businesses that operate legally are likely to retain motivated and productive staff
58
Q

impact of employee protection legislation - compliance costs

A
  • checks on new employees to determine their right to work must be carried out
  • frequent training and specialist HR advice may be employed
  • legal advice or representation may be needed
59
Q

impact of employee protection legislation - higher labour costs

A
  • businesses must ensure that workers receive the national minimum wage
  • safety equipment and provision of rest breaks increase costs
  • checks required on new employees may need trained HR staff to conduct