Business management 2

Question 1

What is market research?

Answer 1

The process of finding and analysing information about the customer wants and needs and the nature of the market

Question 2

Whys is market research carried out?

Answer 2

To help business make decisions that will appeal to customers and allow them to compete

Question 3

How does market research help? (3 points)

Answer 3

Allows businesses to gain insight into an industry and assess the potential success of the concept
Aims to provide qualitative and quantitative data
More detailed understanding of industry and customer tastes -> make more informed decisions about the business -> allow the business to adapt to what the customer wants

Question 4

What are the 3 main areas that market research can be used in

Answer 4

1) To identify new opportunities
2) To assess the feasibility of different plans/ideas (feasibility study)
3) To review the success of the plans/ideas once implemented

Question 5

What is primary research

Answer 5

The collection of information first-hand by a business for a specific purpose

Question 6

Examples of primary research

Answer 6

Surveys, questionnaires, interviews, observations

Question 7

Advantages of primary research (2)

Answer 7

Data is accurate and up to date
Fully specific to the purpose or cause

Question 8

Disadvantages of primary research (4)

Answer 8

1) Time-consuming
2) Expensive
3) May be biased if the business is inexperienced in carrying out research
4) May lack validity if the research was not conducted amongst a large and relevant audience

Question 9

What is secondary research?

Answer 9

The use of information that has been collected previously. This could be by another organisation/business or for a different purpose

Question 10

Examples of secondary research

Answer 10

Newspapers, reports, websites (internet), journals, statistics

Question 11

Advantages of secondary research (2)

Answer 11

1) Often cheaper than conducting primary research
2) Quicker as the information is already available

Question 12

Disadvantages of secondary research (2)

Answer 12

1) Not completely applicable to specific requirements of the business
2) Business is not aware of the conditions under which the research has been conducted

Question 13

Market research process

Answer 13

1) Research objectives
2) Perform secondary research and analyse the data
3) Decide on primary research methods
4) Conduct primary research and analyse the data
5) Present the data and produce the report

Question 14

What is qualitative data

Answer 14

Non-numerical data including opinions or written responses

Question 15

What is quantitative data

Answer 15

Numerical data, such as figures and statistics that can be more easily analysed

Question 16

What is the marketing mix

Answer 16

The elements of a firm’s approach to marketing that enable it to satisfy and delight its customers

Question 17

What are the 4 P’s used for

Answer 17

The 4P’s are manipulated by the firm:
To maximise sales and profit
Create a bran
Develop customer loyalty
Create a unique ceiling point/preposition

Question 18

What are the 4 P’s

Answer 18

Place, price, promotion, product

Question 19

What is product

Answer 19

This includes the physical features and specifications of the product

Question 20

What is SWOT

Answer 20

Is a study undertaken by an organisation to identify its internal strengths and weaknesses, as well as its external opportunities and threats

Question 21

Strengths

Answer 21

Internal
Factors that are positive relative to competitors (e.g innovative staff, products unique selling point)

Question 22

Weaknesses

Answer 22

Internal
Factors that are negative relative to competitors (e.g high wastage, high staff turnover)

Question 23

Opportunities

Answer 23

External
Factors in the external environments that can be beneficial to the organisation
(e.g move into foreign markets)

Question 24

Threats

Answer 24

External
Factors in the external environment that can be detrimental to the organisation
(e.g increased competition, the need to keep up with changing technology)

Question 25

Benefits of SWOT

Answer 25

A SWOT is an analysis of the effectiveness of the company’s operation and the internal factors which influence its success
Shows the current and potential future positon of a company
Highlights the company’s strengths and weaknesses against competitors
Used to help the company meet consumer needs and keep up with the competition

Question 26

Drawbacks of SWOT

Answer 26

Weaknesses and strengths are often a matter of perception rather than fact (often through consumer research)
May be advisable to employ an outside company to carry out regular audit of the business
Open to interpretation (no 2 opinions are the same)
Information is never perfect and the future always changes

Question 27

What is management style

Answer 27

Behaviour and attitude of the manager

Question 28

What are the situational variables

Answer 28

Nature of task
Time
Experience of employees
Manager of preference

Question 29

Nature of task

Answer 29

Is the task dangerous? creative? straightforward?

Question 30

Time

Answer 30

Is there any time pressure? What time frame is involved in decision making process?

Question 31

Manager of preference

Answer 31

What does their personality align with?

Question 32

What are the management styles

Answer 32

Autocratic
Consultative
Laissez Faire

Question 33

Factors in management styles

Answer 33

Decision making
Communication
Importance placed on
Control

Question 34

Autocratic

Answer 34

Decision making: centralised - manager makes the decisions with no staff input
Communication: one way-top down and very clear directions given/ employees are told what to do
Importance placed on: completing the task efficiently and effectively (tends to be degree of uniformity)
Control: high lvl of control

Question 35

When is autocratic appropriate (situational variables)

Answer 35

Nature of task: High risk or crisis situation, large groups of employees working on a task simple in nature
Time: limited
Experience of employees: lack the skills, knowledge and experience to complete the task
Manager preference: prefers to maintain control, can fear delegating/ lacks faith in staff

Question 36

Advantages of autocratic

Answer 36

High level of clarity = clearly defined procedures = consistency in outcome
Employees’ roles and expectations are set out plainly = performance can be monitored + staff held accountable
Decisions made quickly = highly responsive in time of crisis

Question 37

Disadvantages of autocratic

Answer 37

Doesn’t allow the manager to access staff knowledge/ ideas = potential that the best decision is not made
Employees = no power = no chance to develop skills + feel undervalues = decrease morale -> low job satisfaction -> high staff turnover
An ‘us and them’ mentality may develop = lack of employee pride in performance = meet expectations but don’t go above = lower overall business performance

Question 38

Consultative

Answer 38

Decision making: Decisions made by management (centralised) AFTER discussion with employees to obtain opinion
Communication: Two-way communication
Importance placed on: obtaining info from staff to improve decision making BUT management is still responsible
Control: Manager maintain ultimate control HW greater importance is placed on employee involvement + some control over information flow is passed over during decision making process

Question 39

When is consultative appropriate

Answer 39

Nature of task: More complex/creative tasks, when there are elements of the task where employees have more knowledge than the manager, when there are a wide variety of considerations to be taken into account (different interests from different stakeholders)
Time: limited time pressure - may take time to consult employees
Experience of employees: higher levels of experience and skills - employees may have very detailed knowledge of elements of area/decision being made about but not knowledge of the ‘big picture’
Manager preference: likes to include employees and values input, however, still makes final decision

Question 40

Consultative advantages

Answer 40

Greater variety of ideas = improve management decisions = improved business performance
Employees have some ownership = increased motivation and commitment
Employee development/learning through consultation process + enables management to identify high potential staff based on input = increase employee development