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pe mr brennan > business studies paper 1 > Flashcards

business studies paper 1 Flashcards

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1
Q

what is a entrepreneur

A

a person who has always wanted to start a business from scratch

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2
Q

what are the characteristics of an entrepreneur

A

risk taking, confident, creative, perseverance, leadership, enthusiasm

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3
Q

what are the factors of production

A

land
labour
capital
enterprise

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4
Q

what is value added

A

what a business adds to its product to ensure they are making a profit

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5
Q

what is the chain of production

A

stages that a product passes through until it reaches the final customer
as a product travels along the production line it has value added to it

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6
Q

what are the three sectors

A

primary
secondary
tertiary

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7
Q

what is the primary sector

A

the primary sector involves extractive industries eg. farming, forestry and mining

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8
Q

what does the secondary sector involve

A

concerned with the manufacturing of goods, so turning raw materials into finished and semi finished products

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9
Q

what is involved in the tertiary sector

A

output of services

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10
Q

what is deindustrialisation

A

the decline in the size of the secondary sector over time

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11
Q

what is the private sector

A

businesses that have the main goal of making profit

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12
Q

what is the public sector

A

businesses owned by government and local communities not made for profit

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13
Q

what effect does the secondary sector (manufacturing) have on the other sectors

A

this will have a positive effect on the primary and tertiary sector

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14
Q

what is a sole trader

A

owner of a business and makes all the decisions

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15
Q

advantages of being a sole trader

A

make all your own decisions
keep all the profit
cannot issue shares so cannot be taken over
financial state of the business can be kept private

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16
Q

disadvantages of being sole trader

A

unlimited liability- so responsible for all of the debts
hard to raise capital for expansion
must single handily perform all of the business functions which can be exhausting
can easily get overworked
usually small businesses - no large profits
no continuation of the business if he/she dies

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16
Q

what is a partnership

A

when 2-20 people start a business together

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16
Q

advantages of a partnership

A

shared capital and skills
multiple inputs- can be used to solve problems
easy to establish
finances kept private
some partnerships can be limited liability but there finances are no longer private and they have to register with companies house

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16
Q

disadvantages of a partnership

A

risk of disagreeing
profits are shared

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17
Q

what is the third sector

A

usually reinvest there profits eg. faith groups and charities

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18
Q

what is a franchise

A

a well known brand name

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19
Q

what is a franchiser

A

a franchiser lets someone else set up a business using that brand

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20
Q

what is a franchisee

A

the person who sets up the business using that brand

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21
Q

advantages of a franchiser

A

don’t have to pay much to expand
can charge high price for demand
continuous flow of money coming in

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22
disadvantages of a franchiser
less control, more time and money spent on ensuring that the franchisee follows all the correct procedures
23
advantages of a franchisee
greater chance of success as they are already an established brand they get specialist advice and training franchiser does the market research so you don't have to easier to obtain a loan
24
disadvantages of a franchisee
expensive supplies % of profits are given to franchiser cannot be sold without franchisers permission less control
25
what is a cooperative
when a business owned and run by its members profits shared between members rather than shareholders
26
advantages of a cooperative
straight forward and inexpensive to set up everyone is working towards a common goal so motivation is high usually limited liability
27
how do you determine a businesses size
number of employees market share capital employed level of profit and turnover number of factories, offices and shops number of employees
28
factors that affect the size of a business
what type of market you are in (niche or mass) demand for your product how many competitors you have
29
what is a stakeholder
people who are interested in how the business are doing
30
who are the stakeholders in a business
customers suppliers government local community owners shareholders employees
31
what is organic growth
process of a business expanding its operations internally and relying on its own resources to grow.
32
what is a merger
when two businesses join together to create a new larger business
33
what is a takeover
when one business gets control of another business by buying its shares
34
what are joint ventures
a formal agreement between 2+ businesses to work on a particular project together
35
what is a strategic alliance
similar to joint venture but less involved and less permanent.
36
what is the owners objective as a stakeholder
to grow get the best return on investment possible
37
what are the employees objective as stakeholders
good wage job security job satisfaction training
38
what are the customers objectives as stakeholders
best quality products at the lowest price good customer service environmentally friendly products
39
what are the suppliers objectives as stakeholders
repeat orders prompt payments
40
what are the lenders objectives as stakeholders
repayment at agreed time
41
what are the local communities objectives as stakeholders
job opportunity community involvement
42
what are the objectives for the government as stakeholders
more jobs less benefits to pay out exporting more income tax
43
what are porters 5 forces
threats and new entrants bargaining power of suppliers bargaining power of consumers threat of substitutes degree of existing rivalry
44
porters generic strategies
cost leadership differentiation focus or niche stuck in the middle
45
advantages of a business plan
gives a sense of direction sets role of each department encourages communication between different departments
46
disadvantages of a business plan
time consuming very costful opportunity cost plan could be to rigid
47
what is a strategic review
a method used to improve and sustain performance
48
what is the plan, do, review process
plan- establish objectives and course of action do- implement the plan review- formal ongoing evaluation of the process
49
advantages of strategic review
underperforming departments can be identified helps senior managers decide on where the business is headed
50
advantages of the plan, do, review process
forces strategic approach when setting objectives employees focused on getting results encourages a 'kaizen' approach
51
disadvantages of the plan, do, review process
lengthy process inflexible once started if employees haven't been involved in the planning then they will feel less motivated employees may dislike the ongoing review
52
what is contingency planning
planning for 'what will happen if things go wrong'
53
advantages of contingency planning
reduces risk of uncertainty minimises damage done keeps business operating increases insurance availability
54
disadvantages of contingency planning
opportunity cost of time taken to construct plan people constructing the plan may not be honest about their assessment of risks
55
what is crisis management
process taken by a business to deal with an event that threatens to harm the business/ stakeholders
56
what is involved in Ansoff's matrix
market penetration market development product development diversification
57
what is the Boston matrix
a tool that is used to decide what products to produce
58
what is involved in Boston matrix
rising star problem child cash cow dog
59
what is the rising star
product has high market share and has potential to grow
60
what is the cash cow
high sales low market growth though
61
what is the dog
low market share and low market growth
62
what is the problem child
low market share within a market that is rapidly growing
63
advantages of the Boston matrix
a business can see if it has a balanced portfolio or not a business does not want dogs but does want cash cows
64
what is cost plus pricing
when you calculate your costs and add a mark up
65
what is competitor pricing
when you base your prices off of your competitors
66
what is price skimming
when you charge a high price and then get lower and lower as time goes on
67
penetration pricing
when you start off with a low price to get into the market then raise your prices
68
what is premium pricing
when you charge a high price for high quality and luxury goods
69
what is psychological pricing
an example of this is charging £3.99 instead of £4 makes the customer think that they are getting a deal
70
what is dynamic pricing
when the demand for something will dictate the price e.g.. low demand high price
71
formula for labour turnover
number of employees who left during the yr / average number employed during the yr x100
72
formula for labour stability index
number of employees with 1 or more yrs experience / number of employees 1 yr ago x100
73
formula for absenteeism
total days absent in a month / total number of working days in a month x 100
74
formula for lateness
total number of late arrivals / total number of scheduled attendances x 100
75
formula for workforce productivity
output per (day/month/yr) / average number of employees
76
formula for wastage rates
number of rejects produced by department / total number of units produced x 100
77

pe mr brennan (18 decks)

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