Business Operations Flashcards
How do you calculate business growth?j
By calculating The sales turn over the number of employees The share capital The market share The number of outlets
Why would businesses want to grow?
So they can benefit from economies of scale
So they can have a larger market share so they can charge higher prices and gain more profit
So they could also compete with other businesses.
What is diversification?
It is when businesses start selling or acquiring businesses that are not in the same market they are currently selling in.
Why do businesses wish to diversify?
Businesses may wish to diversify because it helps spread the risk of across a number of products and one product fails due to market conditions then other products in different markets should not be affected.
It is also a good way to expand its present market seems already full.
It gives the businesses objectives which may motivate managers and staff.
What is a merger?
A merger is where two or more businesses agree to join together to become a larger firm.
What is an acquisition?
An acquisition is when One from buys another firm.
What are the constraints on growth?
Financial limitations– A business may not be able to raise the necessary finance to grow any bigger.
The size of the market – there is often a limit to the number of people who are willing to buy the type of product that the business is producing.
Government controls-this means that a business cannot necessarily have more than 25% of the market share. This often arises when one business joins another,if the government thinks it is not in the public interest to have such a large business than the joining together may not take place.
Human resources – these are limited in terms of the skills available especially in more specialized areas it may be difficult to find enough qualified staff in the area to expand the business.
What is horizontal integration?
Horizontal integration occurs when two businesses in the same industry In the same stage of production become one – who example a merger between two manufactures or drink suppliers.
What is vertical integration?
Vertical integration involves acquiring a business in the same industry but different stages of the supply chain examples of vertical integration may include the following film distributors owning cinemas.
What is quality?
Quality is about meeting the minimum standard required to satisfy customer needs. High-quality products meet the standards set by customers
What are the two main approaches to achieve quality?
Quality control – were finished products or tech to buy inspectors to see if they meet the set standard.
Quality assurance – where quality is built into the production process for example Checked all items at all stages of the production process.this way everyone takes responsibility for delivering quality.
Is total quality management?
It is where managers try to bring about a change in business culture convincing employees to care about products being made to do their part to ensure standards are met.
What is customer service?
Customer service is experiencing a customer gets when using products made by the business satisfied customers make repeat purchases I recommend a product to friends leading to additional word of mouth sales.
How to improve customer service?
Successful business is defined the quality or standard of service needed to meet customer needs.
How to make sure that quality standards are met?
Training – so that start of understand the role and responsibilities.
Innovation – or introducing new ideas and methods.
Listening to customers helps a business adjust its products to better match consumer needs and respond to any problems.
