Business studies

Question 1

Key Performance Indicators (KPI) (4)

Answer 1

• Revenue growth
• Customer Acquisition Cost (Cost of acquiring a new customer)
• Customer Lifetime Value (Total revenue expected from a customer over their lifetime)
• Conversion Rates (Percentage of leads that become paying customers)

Question 2

Types of Business deals (3)

Answer 2

• Joint ventures
• Mergers and Acquisitions
• Licensing Agreements

Question 3

Challenges that business can face (3)

Answer 3

• Market saturation
• Competition
• Changing needs

Question 4

Role of BD (3)

Answer 4

• Bridge between sales, marketing and operations
• Identifies growth opportunities, develops strategies and ensures successful implementation
• Drives innovation by identifying untapped opportunities

Question 5

How does inflation negatively effect business opportunities (5)

Answer 5

• Increased costs
• Reduced consumer spending
• Economic instability; uncertainty
• High borrowing costs
• Supply chain disruptions

Question 6

Potential positive effects of inflation on businesses (3)

Answer 6

• Asset appreciation
• Opportunities for innovation
• Currency advantage for exporters

Question 7

Explain the currency advantage for exporters that inflation can bring

Answer 7

If domestic inflation weakens the local currency, exporters might benefit as their goods become cheaper for foreign buyers

Question 8

Strategies for navigating inflation (5)

Answer 8

• Diversification
• Efficiency improvements
• Strategic Planning
• Focus on essentials (shift focus on goods with steady incomes)
• Hedging

Question 9

what is meant by strategic planning

Answer 9

Gradual price increases or value added services to maintain profitablility

Question 10

What is meant by Hedging

Answer 10

Using financial instruments to protect against currency or cost fluctuations

Question 11

Examples of hedging (3)

Answer 11

• Forward contracts
• Currency Futures
• Currency options

Question 12

What is meant by forward contracts

Answer 12

Agreement to buy or sell a currency at a predetermined exchange rate on a specific date

Question 13

What is meant by currency futures

Answer 13

Standardised contracts traded on an exchange to lock in an exchange rate for a set amount of currency at a future date

Question 14

What is meant by currency options

Answer 14

Provides the right to buy or sell a currency at a specific exchange rate before a certain date

(useful for companies with exposure to fluctuating input costs)

Question 15

What are commodity futures (2)

Answer 15

• Contracts to buy/sell a specific amount of commodity (oil, wheat, metals) at a predetermined price on a future date
• helps businesses avoid volatility in essential supplies

Question 16

Interest rate cap

Answer 16

Maximum limit on how high interest rates can go