BUSINESS Q'S

Question 1

4 quantitative measures that marketing obj can be based on

Answer 1

• Sales volume
• Sales growth
• Market share
• Market size

Question 2

Two internal and 2 external influences on marketing obj

Answer 2

I = corporate obj + finance department
E = state of economy + technology advances

Question 3

3 ways tech can be used to gather info about customers

Answer 3

Loyalty cards allows supermarkets to form a database

Question 4

Coefficient of -0.9, elastic or inelastic?

Answer 4

If PED is greater then 1 = Elastic

If PED is less than 1 = Inelastic

Question 5

3 factors which affect price elasticity

Answer 5

State of economy
Sub goods
Brand loyalty

Question 6

Outline the STP process

Answer 6

SEGMENT = divide the market into groups 
TARGET = decide which market segment to focus on 
POSITION = Position the products in target customer's minds

Question 7

List 7P’s + 4 influences of the marketing mix

Answer 7

Price
Process
Physical environment
People
Product
Promotion
Place

Question 8

Example where 2 different stakeholders have conflicting interests

Answer 8

In time where a business cuts costs, this benefits internal departments like finance dept since they will have more overall profit.
However, this will not benefit customers since cutting costs would entail reducing the quality of products

Question 9

Role of wholesalers?

Answer 9

Wholesalers buy products cheaply in bulk and sell them on to retailers
Wholesalers sell them in small quantities to retailers. Manufacturers don’t have to wait around for customers to buy.

Question 10

Describe 2 different distribution channels

Answer 10

Direct: Manufacturer to consumer - internet has made this easier

Indirect: Manufacturer - Retailer - Consumer

Question 11

Physical environment the business needs to think about

Answer 11

Appearance of website, should reflect the business through the appearance of their staff
Layout, how easy it is to find ur way around

Question 12

(Operational)

Identify 8 types of operational obj

Answer 12

Quality
Costs
Flexibility
Efficiency
Innovation 
Environment
Speed of response
Dependability

Question 13

How could a company increase the added value of its products?

Answer 13

Added value can be achieved either increasing or selling the product or reducing costs of raw materials
Consumers will pay more for a better quality product
Could also incr value: e.g. environmentally friendly, quick response

Question 14

5 ways in which a company can improve labour productivity?

Answer 14

Can increase by using their facilities for more of the working week
Can buy more machines
Can increase staff levels in long run
Increase productivity + motivation
If demand is temporary, could subcontract

Question 15

2 adv + 2 disadvantages of TQM

Answer 15

TQM can help employees bond as a team, TQM leads to fewer faulty products being made.
•Can take a long time to introduce TQM
•Can demotivate

Question 16

What are quality circles?

Answer 16

Meet at regular intervals to discuss quality control issues. They use knowledge of employees from various departments and all levels of org.
QC aim to identify and solve specific quality problems.

Question 17

(managing inventory)

3 costs involved with holding stock?

Answer 17

Storage costs
Wastage costs
Opportunity costs=cost of investing money in stock or something else

Question 18

In inventory control, what is lead time?

Answer 18

Lead time = time it takes for goods to arrive after ordering them for the supplier. The longer the lead time, the more buffer stocks you need to hold.

Question 19

6 qualities that a business would look for in a supplier?

Answer 19

Price
Payment terms 
Quality
Capacity
Reliability 
Flexibility

Question 20

If demand for a product goes up, what are short + long term impact of supply chain?

Answer 20

Retailer might hire more peripheral workers on short-term contracts to keep shelves full
•Distributer could incr numbers of deliveries by outsourcing some work to another distributor
•Manufacturer could temporarily incr capacity utilisation to 100% + get more raw materials from alternative supply sources

Question 21

Methods to improve cash flow

Answer 21

Overdrafts: arranged with banks

Debt factoring: gives instant cash for invoices

Sale and leaseback

Question 22

Why is CF forecasting useful to someone setting up their own small business?

Answer 22

Established firms base forecasts on experience. New firms have no past data, so their forecast should consider the businesses capacity, experiences of similar firms and customer trends shown by market research

Question 23

What are the determinants on the CF cycle?

Answer 23

The type of product: length of time it takes to produce and how long it’s in stock

Credit payments: buying on credit means goods are received, but the buyer has agreed to a period before payment is due

Question 24

How do businesses deal with variances?

Answer 24

If they’re adverse then they could change the marketing mix, cut prices, update the product, or streamline production to make it more efficient.

If it’s favourable them they could choose to be more ambitious next time

Question 25

What are some internal sources of finance?

Answer 25

It’s retained profit + rationalisation = when managers recognise the business to make it more efficient. They can do this by selling some of their assets.

Question 26

What is venture capital?

Answer 26

VC is funding in the form of share or loan capital invested in a business that is thought to be high risk.

Question 27

How can HR dept help employees reach full potential?

Answer 27

Hr Obj could include: •marching workforce to business needs •helping employees reach full potential, maybe with training •supporting employee/employer relations: based on good communication

Question 28

Give 3 ways in which HR department can help increase labour productivity?

Answer 28

HR can introduce bonuses and rewards for employees, which will also reduce absenteeism. •Making sure employees feel engaged, possibly with a flatter structure •They can improve working conditions for better atmosphere

Question 29

2 benefits and drawbacks of high labour turnover

Answer 29

ADV: getting a range of different workers, with different skills and experience DISADVANTAGES: •could lose team spirit, since employees may not get to bond with as many people •Also recruitment can be very costly

Question 30

Difference between centralised and decentralised?

Answer 30

C=more experienced managers being the main governing body as opposed to new employees/younger people. They get a whole overview of the business and ultimately get final say. D=involves sharing our authority to more junior employees. They delegate power to regional managers

Question 31

Discuss factors one must consider before delayering

Answer 31

Must consider: •state of business, competitions performance •economy •sales growth, market share, liabilities If company is in a bad condition, then a central structure may be best as a short-term strategy.

Question 32

Give a brief description of of Taylor’s views on motivation

Answer 32

F.W.Taylor thought that workers were motivated by money •He believed that workers would do the minimum amount of work if left to their own devices •Taylor’s goal was to figure out the most efficient way to do a job, and then make sure every single worker did it that way. —> also making sure that each task was being done by the right worker. He favoured a div of labour

Question 33

Give 5 factors that Herzberg would describe as ‘hygiene factors’

Answer 33

Good company policy, supervision, working condition, pay, and relations with fellow employees

Question 34

Write + describe 5 job characteristics of Hackman and Oldham model

Answer 34

Skill variety, task identity, task significance, autonomy, feedback

Question 35

Use Hackman and Oldham model to explain the effect of good job design on workers

Answer 35

SKILL VARIETY= wide variety of skills needed TASK IDENTITY=workers feel involved if there is a clear task T SIGNIFICANCE=if people think the job they’re doing is significant, they will be motivated to do well AUTONOMY=workers who make their own decisions will feel like their contribution is valued FEEDBACK=this tells the workers how they have performed and encourages them to do better

Question 36

If someone has a rep for bad customer service, how could Maslow’s hierarchy of needs be used to improve it?

Answer 36

Self-actualisation- by giving the opportunity to develop new skills Self-esteem=businesses gives employees recognition and offers promotion Social needs=team working and social outings Safety=health and safety policies Basic physical needs=warm environment

Question 37

Give 5 non-financial motivation measures a business can use

Answer 37

``` Team working Creating a good environment Empowerment Job enrichment Job enlargement ```

Question 38

Why would a supplier be interested in a business’s balance sheet?

Answer 38

Suppliers are particularly interested in working capital and liquidity •The more liquid the firms assets are, the better the firm will be at paying bills—>this helps them decide whether to offer the business supplies in credit, and how much credit to offer.

Question 39

What does an income statement show?

Answer 39

Income statement shows how much money has been coming into the company (revenue) and how much has been going out (expenses)

Question 40

Give 2 examples of non-numerical external factors that affect businesses but aren’t considered in their financial analysis

Answer 40

The economic or market environment •it doesn’t tell you everything about what a competitor might do next, or what legislation the gov might pass •The development of tech, or potential changes to the location of the business doesn’t appear either

Question 41

Explain why you shouldn’t rely solely on financial analysis to predict a company’s future performance

Answer 41

Balance sheets don’t give any clues about market or economy —> they also don’t value intangible assets like staff skill, staff motivation or management experience —-> also if bad debts are included, it could be misleading •income statement also doesn’t include any info about external factors such as market demand nor does it include info about internal factors such as staff morale

Question 42

What is the hearing formula and what is meant by high gearing?

Answer 42

GEARING= non current liabilities/total equity + non-current liabilities x 100 High gearing means that a high proportion of the company’s finance has come from non-current liabilities (long term debt) as opposed to share capital or reserves

Question 43

How could high gearing affect shareholders?

Answer 43

If the business fails and can’t afford loan repayments. When a business goes into liquidation, lenders will probably get the money they’re owed, but the shareholders could lose most or all money

Question 44

One risk and one reward of high gearing

Answer 44

REWARD= borrowing money gets extra funds for expansion. Ideally the loan is invested in projects or technology which increase profits RISK= it may not be able to afford the repayments - it might not make enough profit to pay back the loan and interest

Question 45

Give an example of marketing, HR and operational data that could be considered when analysing performance

Answer 45

Marketing: Calculations of market share+market growth and sales growth HR: calcs on labour productivity, labour turnover + retention + employees costs as a % of turnover Operations: calcs of capacity and utilisation, unit costs and fixed/variable costs

Question 46

What are core competences?

Answer 46

CC are the capabilities of a business that are unique and give a business a competitive advantage

Question 47

To what extent is it important for a business to identify its CC?

Answer 47

CC are fundamental to the success of the business and should allow the business to compete in different areas CC are hard for competitors to copy, they may offer benefits to consumer

Question 48

(Methods of assessing performance) | What are 4 different perspectives managers need to consider using Kaplan and Norton’s balances scorecard model?

Answer 48

K+N is used to assess business performance and strategy Financial perspective=“How do we create value for shareholder?” •OBJ: to increase profitability •Measures: e.g. ROCE + sales growth •Target: e.g. incr ROCE BY 3% INTERNAL BUSINESS PROCESS PERSPECTIVE Q: “How can we improve our process? Obj: e.g. improve efficiency, Measure: like capacity utilisation

Question 49

Give one ADV + DISADV of using K+N

Answer 49

It’s valuable since it treats the business as several dependant, rather than independent functions-this means all departments need to consider how their actions will impact on others

Question 50

What are 3 areas of performance measured by Ellington’s triple bottom line model?

Answer 50

Used to measure a businesses performance in relation to 3 overlapping areas: •Profit: The traditional financial or economic value created by the company •Impact on People: a company’s social values and the way it treats its employees and local community •impact on planet: A company’s environment values and impact on environment

Question 51

What does fiscal and monetary policy do?

Answer 51

FISCAL=does 2 things: sets tax rates and the amount of government spending MONETARY=policy means tweaking the interest rate to control inflation + exchange rates

Question 52

What is CSR? Give 3 advantages

Answer 52

PHILANTROPIC: to be a good corporate citizen EHICAL: to do the right thing LEGAL: to obey laws and regs It can improve brand loyalty and attract new customers

Question 53

Give 5 opportunities that new tech can bring to a business

Answer 53

``` New products Improving processes Mass customisation Reduced barriers to entry E-commerce ```

Question 54

(Business and competitive environment) | What are 5 forces in Porter’s 5 force model?

Answer 54

``` BARRIERS TO ENTRY BUYER POWER SUPPLIER POWER THREAT OF SUBSTITUTES RIVALRY ```

Question 55

How could a business raise entry barriers?

Answer 55

Patents or trademarks Threatening new entrants with a price war

Question 56

How can a business improve their power as buyers and sellers?

Answer 56

A company may buy a supplier out - backwards vertical integration Similar businesses can come together to form a buying group. They’ll be buying bigger volumes so will be able to demand a better deal and so increase their profits.

Question 57

Describe Porter’s generic strategies

Answer 57

Cost leadership Differentiation Focus

Question 58

Give 2 internal and 2 external economies of scale

Answer 58

Internal= •Technical (related to production method for volumes) •Managerial (larger businesses can employ managers with skills) External= •Having a large number of suppliers to choose from gives EoS

Question 59

Explain advantages of EoS for a manufacturing business

Answer 59

External EoS such as having a large number of suppliers could mean that the manufacturer can get the best value parts/materials by bargaining •Also have EoS in terms of skilled workforce - efficiency •Technical EoS: Manufacturer can buy more advanced machinery, fewer staff

Question 60

3 advantages + 3 disadvantages of organic growth

Answer 60

ADV: •can maintain current management style, culture and ethics •Less disruptive changes mean the workers efficiency, productivity and morale remain high DISADV: •it can take a long time to grow a business internally and a while for the business to adapt to big market changes •Businesses May miss out on opportunities for more ambitious growth if they only grow internally

Question 61

What is greiners growth model?

Answer 61

1: CREATIVITY = leadership crisis 2: DIRECTION = Autonomy crisis 3: DELEGATION = Control crisis 4: COORDINATION = Red tape 5: COLLABORATION = growth crisis

Question 62

Horizontal and vertical integration

Answer 62

HORIZONTAL: occurs when a firm combines with another in same industry at same production stage VERTICAL: when a firm combines with another in same industry but at different stages

Question 63

What are some benefits and problems one may face when benchmarking against similar firms

Answer 63

ADV: can provide early warnings to businesses about technology or methods for overtaking DISADV: it won’t directly lead to new products - competitor products are likely to be protected by a patent or copyright and u need to be careful what ideas you take from them

Question 64

Give 5 reasons why a business may enter into an international market

Answer 64

* to increase market share * to extent product life cycles * can reduce costs by getting their raw materials from cheapest price counties * operating in developing countries with low wage rates can also reduce costs if UK economy is in recession