Building a Business

Question 1

Name the two types of business growth

Answer 1

internal (organic) and external (inorganic)

Question 2

When does internal growth occur?

Answer 2

when a business expands by itself

Question 3

What are some methods of internal growth?

Answer 3

entering new markets, bringing out new products, investing in new technology

Question 4

What are the two approaches to external growth?

Answer 4

merger and takeover

Question 5

What is a merger?

Answer 5

where two or more businesses voluntarily agree to join up and work as one

Question 6

What is a takeover?

Answer 6

where one buys another and takes over

Question 7

What is backward vertical growth?

Answer 7

a business joins with one at a previous stage e.g a supplier

Question 8

What is conglomerate growth?

Answer 8

businesses with no common business interests join

Question 9

What is horizontal growth?

Answer 9

businesses at the same stage join

Question 10

What is forward vertical growth?

Answer 10

business joins with one at a later stage e.g a customer

Question 11

How are public limited companies able to raise caoital?

Answer 11

through selling shares on a stock exchange

Question 12

Give some benefits of being a PLC

Answer 12

limited liability, greater public awareness of business, may be able to negotiate better prices with suppliers

Question 13

Give some drawbacks of being a PLC

Answer 13

more complex procedures, less privacy around financial performance, risk of potential takeovers

Question 14

Give some internal factors that may cause business objectives to change

Answer 14

performance, leadership, culture

Question 15

Give some external factors that may cause business objectives to change

Answer 15

competition, legislation, market conditions, technology

Question 16

What might some targets be for a growing business?

Answer 16

expand product range, increase profits, enter new markets, open new stores, increase the workforce

Question 17

What might some targets be for a struggling business?

Answer 17

decrease product range, achieve enough sales to break - even, maintain market share

Question 18

What is globalisation?

Answer 18

where businesses operate internationally and gain a lot of influence or power

Question 19

Give some benefits of globalisation

Answer 19

new market opportunities, access to technology and resources

Question 20

Give some drawbacks of globalisation

Answer 20

threat from foreign competition, challenge of adapting products and services to meet the need of foreign customers

Question 21

What are some examples of trade barriers?

Answer 21

tariffs, quotas, subsidies, trade blocs, non - tariff barriers

Question 22

What are the reasons for trade barriers?

Answer 22

protecting jobs in domestic industries, raising revenue from tariffs, protecting emerging industries

Question 23

What is glocalisation?

Answer 23

businesses often have to adapt their product in order to suit other countries’ cultural differences and legal requirements

Question 24

What are ethics?

Answer 24

the moral principles that guide the behaviours of individuals and businesses

Question 25

What are pressure groups?

Answer 25

organisations that try to make a business change their behaviour or operations

Question 26

How can pressure groups effect businesses?

Answer 26

they can cause bad publicity for businesses that act unethically, which can damage a businesses reputation

Question 27

Give examples of ethical behaviour by businesses

Answer 27

treating workers and suppliers fairly, ethical sourcing of materials, meeting government requirements and legislation, caring for the environment

Question 28

What are the three aspects of the design mix?

Answer 28

function, cost and aethetics

Question 29

What are the stages of the product life cycle?

Answer 29

research and development, introduction, growth, maturity, decline

Question 30

What are extension strategies used to do?

Answer 30

extend the life cycle of a product

Question 31

What factors influence pricing strategy?

Answer 31

competition, market segment, product life cycle, costs, branding, technology

Question 32

Name the methods of promotion

Answer 32

advertising, sponsorship, product trials, special offers, public relations

Question 33

What are the benefits of retailing?

Answer 33

customers can try products, offers point-of-sale promotions

Question 34

What are the benefits of e-tailing?

Answer 34

businesses dont have to rent retail space, customers can buy at any time of the day, businesses can access customers around the world

Question 35

What are the three methods of production?

Answer 35

job production, batch production, flow production

Question 36

What are the benefits of technology on business operations?

Answer 36

speeds up production, keeps businesses in touch with customers, lowers production costs

Question 37

What are the drawbacks of technology on business operations?

Answer 37

can involve high initial cost, requires employees to be trained to use the technology

Question 38

What is Just In TIme (JIT) stock control?

Answer 38

a stock management system where stock is delivered only when it is needed by the production system so no stock is kept by the business

Question 39

What are the benefits of holding stock?

Answer 39

any unexpected surges in demand can be met, damaged goods can be replaced

Question 40

What are the benefits of holding no stock?

Answer 40

save money, less chance of damaged or stolen stock

Question 41

What makes a good supplier?

Answer 41

good value for money, flexible deliveries, reliable deliveries, discounts for large orders

Question 42

What are two ways of achieving good quality?

Answer 42

quality control and quality assurance

Question 43

What is quality control?

Answer 43

when a quality controller examines a product after it has been made

Question 44

What does quality assurance involve?

Answer 44

focusing on quality at every stage of the production process

Question 45

What will a business use quantitative data for?

Answer 45

to monitor performance of the business, to compare its performance to that of competitors, to set business aims and objectives

Question 46

What are the types of data used to make business decisions?

Answer 46

marketing data, financial data, market data

Question 47

What are the limitations of financial data?

Answer 47

it is historical, statistics can be manipulated, business performance should not be solely judged on financial performance

Question 48

What does a business with a hierarchal structure have?

Answer 48

a long chain of command

Question 49

What are the benefits of a hierarchal structure?

Answer 49

makes the business easier to control and provides lots of opportunities for promotion

Question 50

What are the drawbacks of a hierarchal structure?

Answer 50

costly and slows down effective communication

Question 51

What does a business with a flat structure have?

Answer 51

few levels of management but a wide span of control

Question 52

What is a benefit and a drawback of a flat structure?

Answer 52

improve's businesses flexibility but lines of authority are'nt always clear

Question 53

Who are centralised decisions made by?

Answer 53

senior managers

Question 54

How are decentralised decisions made?

Answer 54

they are delegated to regional employees at local stores and branches

Question 55

What can poor communication have an impact on>?

Answer 55

employee motivation, customer service, number of mistakes made

Question 56

What are the different types of worker?

Answer 56

full-time, flexible, permanent contract, temporary contract. freelance contract, part-time

Question 57

What are the stages of the recruitment process?

Answer 57

draw up recruitment documents, receive applications, shortlisting, selection, training

Question 58

What documents are used in the recruitment process?

Answer 58

application forms, CV, job descriptions, person specificstions

Question 59

What is formal training?

Answer 59

employees attend specific training courses to improve their skills

Question 60

What is informal training?

Answer 60

employees learn skills 'on the job', by developing skills and experience over time or being coached by other employees

Question 61

What are some financial methods of motivation?

Answer 61

time-based systems, salaries, results - based systems, fringe benefits

Question 62

What are some non-financial methods of motivation?

Answer 62

job enrichment, job rotation, teamworking, employee reward scheme