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Higher Business Management > Understanding Business > Flashcards

Understanding Business Flashcards

1
Q

List external stakeholders

A

Customers,Suppliers,local community,pressure groups,government.

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2
Q

list internal stakeholders

A

owners,shareholder,employees.

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3
Q

list external factors

A 
Political
economical
social
technological
environmental
competitor
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4
Q

list internal factors

A

finance, human resources, current technology, corporate culture

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5
Q

list the factors of production

A

capital
enterprise
land
labour

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6
Q

what is an interest

A

an interest is what a shareholder wants out of the business.

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7
Q

what is a capital item

A

these are a good or a service which are consumed by businesses so that they can provide other goods and services, example of this

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8
Q

what is creation of wealth

A

The whole production of a good begins with a raw material and then ends with a finished good to be sold o a customer,throughout the stages value is added.

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9
Q

examples of customer service

A

customer service is things like:
politeness to staff
the replacement of faulty goods
your reaction to any problems of complaints
the time it takes for the customer to be served
the quality of the product which is being sold

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10
Q

what are benefits to good customer service

A

satisfied and loyal customers
the business gets a good image and reputation
motivated and highly performing staff

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11
Q

what are the effects of bad customer service

A

demotivated staff due the amount of complaints
unsatisfied customers will not return
a poor reputation which is hard too turn around

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12
Q

what is a entrepreneur

A

an entrepreneur is someone who has a business idea or is ready to take someone else’s idea and develop it to produce a produce or to provide a service, an entrepreneur must be able to take risks, show initiative and be able to ‘make things happen’

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13
Q

what is a franchise

A

A franchise is a business run by one firm under the name of another. the main original business is known as the franchiser and then the owner of each of the singular branches are known as the franchisee

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14
Q

advantages of the franchiser

A
  • it is a quick way to enter new geographical markets and the name of the business will become more well known without the use of too much finance to do so
  • it is a low risk way of growing as the franchisee makes the majority of the investment
  • will receive a percentage of all the franchisees profits on the year
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15
Q

disadvantages of the franchiser

A
  • franchiser is reliant on the franchisee to keep the good image and name of the business
  • only a part of the profits made will the franchiser received as the franchisee will get a percentage also
  • the profits made will be dependent on the ability and quality of the franchisee
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16
Q

advantages of the franchisee

A
  • the franchisee benefits from the national advertisement carried out by the franchiser
  • industry knowledge and training will be provided by the franchiser saving finance for other areas
  • the franchisee has the advantage of the well known brand name and back up service
  • no reputation will need to be made as the business is already well known.
17
Q

disadvantages of the franchiser

A
  • a percentage of the profits have to be paid to the franchiser
  • there will be high fees in the beginning of the business
  • the franchiser may not renew the franchise after a certain period of time
18
Q

Name the sectors of industry

A
  • primary sector
  • secondary sector
  • tertiary sector
  • Quaternary sector
19
Q

what is the primary sector of industry

A

the primary sector consists of the businesses which are involved in the exploitation of natural resources, an example of this would be mining or fishing

20
Q

what is the secondary sector of industry

A

the secondary sectors consists of businesses that are involved in the manufacturing and production by using natural resources to make them into good to be later sold. an example of this would be car manufacture or electronics

21
Q

what is the tertiary sector of industry

A

the tertiary sector consists of businesses and organisations that are involved in providing services rather than that of goods. an example of this would

22
Q

what is the Quaternary sector of industry

A

the quaternary sector consists of businesses which provide information and knowledge based services such as r&d which is research and development

23
Q

What are the sectors of economy

A
  • private sector
  • public sector
  • third sector
23
Q

What is the private sector

A

The private sector consists of businesses that aim to primarily maximise their profits and example would be McDonalds or McPherson’s

23
Q

What is the public sector

A

The public sector consists of government owned organisations which aim to provide a service to a community, an example would be schools and hospitals

23
Q

what is the third sector

A

The third sector consists of organisations that have been set up to provide goods or services to benefit others, an example of this would be charities o social enterprises

23
Q

Name types of private sector businesses

A

Private limited companies
Public limited companies
Franchise
Multinationals

23
Q

What is a LTD and its features

A

Private limited company gains there name from having limited liability, this means that if the business was to go bankrupt then the owner wouldn’t have to sell their personal possessions. The owners of these companies are called shareholders as they own shares in the business. The shares of these types of companies are not available to the public and shares are only sold to people the owners know, like employees for example. These companies are run by a board of directors. These business must also have complex documents called the memorandum of association and the articles of association which outline the rules set for the business

24
Q

What are the advantages of an ltd

A
  • owners have limited liability

- ownership of the business cannot be lost to outsiders

25
Q

What are the disadvantages of an ltd

A
  • the profits have to be shared out between shareholders based on there amount of shares
  • there are complicated and complex legal procedures to be done when setting up
  • there is a limited source of capital as shares cant be sold publicly
26
Q

What are plcs and their features

A

Public limited companies are the same as ltds with regards to most features apart from unlike peristyle limited companies plcs can sell there shares publicly

27
Q

Advantages of a plc

A
  • shareholders have limited liability
  • large amounts of finance can be raised from the selling of shares
  • easier to borrow money from banks as they are deemed as being less risky for banks
  • plcs can find it easy to dominate the market
28
Q

What are the disadvantages of plcs

A
  • profits must be shared between many shareholders
  • it can be costly and complicated to set up
  • control of the business can be easily lost due to anyone having the ability to buy shares in the business
29
Q

Name company objectives

A
  • maximising profits
  • survival
  • satisficing
  • provide a quality service
  • increase in market shares
  • sales maximisation
  • corporate social responsibility
30
Q

What are the objectives of private sectors companies

A
  • to maximise profits
  • to increase market shares
  • to maximise sales
  • to survive
  • to provide a high quality product or service
31
Q

What are the objectives of a public sector organisation

A

-to offer a high quality service

Higher Business Management (5 decks)

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