Advantages and disadvantages Flashcards
(17 cards)
Advantages and disadvantages of a sole trader?
advantages
- they keep all profit
- they make all the decisions
- choose when they work
disadvantages
- unlimited liability, they are held liable for the businesses debt
- a lot of work because they are the only one running the business
What are the advantages and disadvantages of a partnership?
advantages
- work is shared
- different partners can bring different skills
disadvantages
- profit is shared
- partners may not always agree on decisions for the business
- unlimited liability
What are the advantages and disadvantages of a private limited company?
advantages
- limited liability, (shareholders personal assets are protected)
- more able to raise money by offering shares to a small group of investors
- they can limit the number of shares
disadvantages
- high set up costs
- any profits made by the company must be shared between the shareholders
What are the advantages and disadvantages of a public limited company?
advantages
- limited liability, shareholders are not liable for company debt
- access to capital, public companies can raise capital by selling shares
disadvantages
- greater risk of being taken over, by a rival company as its cant control who buys shares
- its expensive to set up requiring a minimum of 50,000
What are the advantages and disadvantages of a corporation?
advantages
- limited liability
- equal ownership
disadvantages
- hard to make decisions with one boss
- hard to raise capital
- conflicts and disagreements
What are advantages and disadvantages of a franchise?
advantages
- its already set up for you
- brand recognition, its already well known so you don’t have to spend money to market it
disadvantages
- you have to pay them monthly bills
- lack of control
Advantages and disadvantages of JIT
advantages
- reduces costs because a business does not have to pay for storage space for the stock
- having less stock reduces the risk of stock becoming out of date, damaged or wasted which saves money
disadvantages
- the business will not be able to meet demand if there is an unexpected change in demand because they don’t keep extra stock
- if suppliers fail to deliver on time, production can halt leading to delays and lost sales
Advantages and disadvantages of cell production?
advantages
- becoming extremely good at the job you do in your cell
- greater efficiency (cells can quickly identify and fix production issues)
- faster production times
disadvantages
- repeating the same job can be boring and decrease motivation
- high training costs
Advantages and disadvantages of flow production?
advantages
- high efficiency as production line moves continuously so it saves time
- economies of scale can be achieved as cost per unit will be low
disadvantages
- workers find work repetitive and boring decreasing motivation
- high initial costs for setting up machinery and production lines
Advantages and disadvantages of batch production?
advantages
- its faster making products in batches because your not spending a lot of time and detail on one product at a time
- large volume of output is produced from batches
- easier for quality checks
disadvantages
- small batches can be expensive (fixed costs are spread over fewer units)
- potential for waste because if a batch has defects the whole group will need to be discarded, loosing money
- higher costs than flow because stopping and starting production can be inefficient
what is cost plus pricing?
the business adds some money on to the cost of producing the product
what is competitive pricing?
setting a price based on competitors prices. they may match,beat or set a similar price.
what is penetration pricing?
a business sets a low price to attract customers initially, then gradually increases the price
what is price skimming?
setting a high price initially when the product is new, then gradually lowering the price over time
what is phycological pricing?
pricing products just below a whole number to make them seem cheaper e.g. £1.99
advantages of e-commerce?
- wider market reach
- lower operating costs
advantages and disadvantages of job production?
