component 1 - Business opportunities Flashcards
(147 cards)
1
Q
what are the 3 business sectors?
A
-private
-public
-voluntary
2
Q
what type of businesses are in the private sector?
A
businesses who’s main goal is to make a profit and are owned by private investors
3
Q
what type of businesses are in the public sector?
A
businesses who’s goal is to help British citizens and are owned by the government. They are funded by taxes.
4
Q
what type of businesses are in the voluntary sector?
A
businesses that aren’t concerned about profit and that’s main goal is to help raise money eg charities
5
Q
what are the 4 sizes of businesses?
A
-micro businesses
-small businesses
-medium businesses
-large businesses
6
Q
what is a micro business?
A
a business with less than 10 employees and turnover under £2million
7
Q
what is a small business?
A
a business with less than 50 employees and turnover under £10million
8
Q
what is a medium business?
A
a business with less than 250 employees and turnover under £50million
9
Q
what is a large business?
A
a business with more than 250 employees and turnover more than £50million
10
Q
what are the 4 factors of production?
A
-capital
-enterprise
-labour
-land
11
Q
what is the mnemonic for the factors of production?
A
CELL
12
Q
what is capital?
A
the finance invested in the firm by the owner/shareholder
13
Q
what is enterprise?
A
bringing together the factors of production in order to produce a good or service
14
Q
what is land?
A
where the business is based or where it can get extractable resources
15
Q
what is labour?
A
the people who work in the business
16
Q
what are the 3 production sectors?
A
-primary
-secondary
-tertiary
17
Q
what is the focus of the primary sector?
A
extracting raw materials
18
Q
what is the focus of the secondary sector?
A
manufacturing processes
19
Q
what is the focus of the tertiary sector?
A
private companies that provide a service
20
Q
what does interdependent mean?
A
all sectors rely on eachother
21
Q
what is an aim?
A
a long term goal
22
Q
give 2 pros of an aim
A
-helps give a business direction and work towards a goal
-helps a business see their progress
23
Q
give 3 examples of aims
A
-profit
-growth
-market share
24
Q
what is innovation?
A
coming up with new ideas
25
what are objectives?
shorter term, more specific goals
26
what is the mnemonic for objectives?
SMART
-specific
-measurable
-achievable
-realistic
-time based
27
what is the mnemonic for examples of objectives?
PIGSS
-profit
-image
-growth
-social
-survival
28
state the equation for profit
profit = total sales - total costs
29
give 3 uses of profit
-expansion of business
-measurement of success
-investor pressure
30
state 3 ways growth can be measured
-value of sales
-volume of sales
-market share
31
give 2 ways a business can grow
internally or externally
32
give 2 examples of how a business can grow organically
-by opening new stores
-by launching new products
33
give 2 examples of how a business can grow externally
-merger
-takeover
34
what is the focus of the tertiary sector?
when the business has enough capital to cover costs in order to exist
35
what is cashflow?
the inflow and outflow of cash in a business
36
what does it mean by a business behaving socially?
what does it mean by a business behaving socially?
37
give 2 ways in which a business could behave socially
-creating employment
-supporting local community
38
what does it mean by a business behaving ethically?
when they behave in a way which is morally correct
39
give 2 ways in which a business can behave ethically
-by treating stakeholders in a fair manner
-by reducing negative impacts on the environment
40
give 2 reasons why businesses set objectives
-to monitor/measure performance
-to motivate employees
41
give 2 aims of a business in the private sector
-profit
-expansion
42
give 2 aims of a business in the public sector
-help people
-improve quality of public services
43
give 2 aims of a business in the voluntary sector
-offer services to the community
-to open more branches
44
what is a stakeholder?
someone with an interest in a business
44
give 2 examples of internal stakeholders
-owners
-employees
45
give 5 examples of external stakeholders
-customers
-the government
-local community
-suppliers
-competition
46
give 3 examples of conflict in a business
-owner vs employee
-owner vs customer
-owner vs supplier
47
give 3 reasons someone might start their own business
-to make a profit
-to fulfil and interest
-to be their own boss
48
what is an entrepreneur?
An individual who has an idea that they develop by setting up a new business and helping it grow
49
give 3 qualities of an entrepreneur
-risk taking
-determined
-creative
50
what is an opportunity cost?
The next best thing that could've been chosen but wasn't. Eg the cost of losing out on an opportunity
51
give 3 ways in which business opportunities can be identified
-spotting trends
-notice something missing
-copying ideas from elsewhere
52
what is a business plan?
a report describing the strategies involving the functions in a business
53
give 5 things in which a business plan contains
-the idea
-finance (costs)
-market research
-aims and objectives
-competition
54
give 3 pros of a business plan
-helps clarify objectives and identifies how to meet them
-helps with organisation
-helps analyse risk
55
give 3 cons of a business plan
-factors may change
-time consuming
-may lack experience
56
give 2 sources of help for writing a business plan
-enterprise agencies
-accountants
57
what is a market?
a place where buyers and sellers come together
58
give 2 types of markets
-local
-global
59
give 2 types of marketing
-mass
-niche
60
what is mass marketing?
creating a product or service that appears to all types of consumer
61
what is niche marketing?
targeting smaller/specific segments
62
give 2 pros to a business operating in a local market
-good relationship and understanding with customers
-reputation spreads quickly
63
give a con of a business operating in a local market
-small market size so less potential sales
64
-give 3 cons to a business operating in a global market
-slower communication
-more competition
-slow spread reputation
65
give a pro|to a business operating in a global market
-large market size meaning more potential customers
66
what is market segmentation?
grouping customers into categories based on characteristics eg age and gender
67
give 3 methods of market segmentation with examples
-demographic eg age, gender, income
-geographic eg urban, rural
-psychographic eg personality and emotion
68
give 2 pros of market segmentation
-helps with advertising as can be more specific so is more specific
-most and least profitable customers can be identified
69
give a con of market segmentation
-business may become too narrow minded so sales may be limited
70
give 2 pros of niche marketing
-more specific
-allows business to charge premium prices
71
give 2 pros of mass marketing
-large audience
-more potential customers
72
what is market share?
the percentage or proportion of the total sales of a product in comparison to it's market
73
what is market growth?
the percentage change in sales over a period of time
74
what are the 3 cs?
-customers
-competition
-costs
75
give 2 ways a market is measured
-in volume/quantity of products sold
-value of the goods sold
76
give 3 factors that could influence market growth
-economic growth
-fashion/trends
-changes in taste
77
give the formula for market share
sales of one product/total sales in market x 100
78
what is extrapolation?
the use of trends established by previous data to make predictions about future values
79
give 2 pros of extrapollation
-cheap and simple
-not much data is required
80
give 3 cons of extrapolation
-may be unreliable
-assumes past trends will continue
-ignores qualitative factors eg changes in taste
81
give 3 reasons why businesses compete
-market share
-profit
-to be market leader
82
give 4 types of competition
-monopoly
-oligopoly
-monopolistic
-perfect
83
what is monopoly competition?
-when a market is dominated by a firm with a market share over 25%. They are known as the pricemakers
84
give 3 features of monopoly competition
-larger firms have control over the market
-high capital costs to set up for new businesses
-customers already have loyalty
85
what is oligopoly competition?
when a market is dominated by a small number of large firms
86
give 3 features of oligopoly competition
-brand loyalty
-strong brand identities
-barriers to entry
87
what is monopolistic competition?
when a large number of firms compete in a market, however each have a differentiation
88
give 2 features of monopolistic competition
-easy for new firms to enter the market
-product differentiation
89
what is perfect competition?
when there are a large number of similar sellers who are too small to influence the price of the product
90
give 2 features of perfect competition
-all sellers produce very similar products
-freedom of entry for new businesses
91
give 3 pros of SMEs
-create jobs
-pay tax to the government
-create competition
92
give 3 cons of SMEs
-small scale and more likely to fail in hard times
-smaller budgets so hard to compete
-harder to raise finance eg less branding
93
give 2 pros of PLCs
-can raise finance by selling shares on stock exchange
-reputation as well established
94
give 2 cons of PLCs
-risk of takeover
-financial information available to anyone
95
give 4 internal factors that influence a business
-finance
-marketing
-operations
-human resources
96
give 4 external factors that influence a business
-political factors
-customers
-suppliers
-competition
97
give 3 ways of how a business can improve competitiveness
-improved marketing
-reducing costs
-improved quality
98
give 2 reasons why competition benefits the government
-provides jobs = less unemployment
-more disposable income = more tax
99
what is demand?
the amount of a product of service that consumers are willing or able to buy at any given price
100
give 5 factors that influence demand
-tastes and fashion
-seasonal factors
-price
-incomes and wealth
-marketing
101
what is market equilibrium?
the point at which consumers are willing to purchase at a given price and suppliers are willing to sell at the given price (where consumers and suppliers both agree)
102
why may market equilibriums shift/change?
due to patterns of demand and supply
103
what does price elasticity of demand mean?
how sensitive demand is to a change in price
104
what does it mean if demand is elastic?
demand is sensitive to a change in certain factors eg price or income
105
what does it mean if demand is inelastic?
demand isn't sensitive to a change in price
106
give 3 things that influence pricing decisions
-costs of production
-competition
-customer demand
107
what is the equation for price elasticity of demand? how can you tell if it is elastic or inelastic?
%change in quantity demanded/%change in price
if answer is 1+ = elastic
if answer is 1- = inelastic
108
give 3 types of product with examples
-luxury (iphone 15)
-normal (walkers crisps)
-inferior (Aldi crisps)
109
what is market research?
finding out information about the wants and needs of customers in order to identify and satisfy demand
110
give the 3 steps for market research
-identify
-anticipate
-satisfy
111
what is primary research?
collecting information first hand
112
give 3 methods of primary research
-focus groups
-questionnaires
-interviews
113
give 2 pros of primary research
-up to date
-relevant to business
114
give 2 cons of primary research
-may be expensive
-time consuming
115
what is secondary research
-collecting already existing information
116
give 3 methods of secondary research
-census
-magazines
-newspapers
117
give 2 pros of secondary research
-readily available
-cheap
118
give 2 cons of secondary research
-may not be relevant to the business
-may not be up to date
119
give 2 types of data
-qualitative and quantitative
120
what is qualitative data
the collection of information based on subjective factors eg opinions and reasons
121
what is quantitative data?
the collection of information based on numerical values (usually gathered by closed questions)
122
give 3 pros of being a sole trader
-full control
-keep all profits
-quick decision making with less conflict
123
give 3 cons of being a sole trader
-unlimited liability
-limited skillsets
-more responsibility and work load
124
give 3 pros of being an LTD
-limited liability
-shared workload
-varied skillsets
125
give 3 cons of being an LTD
-profits shared
-more potential conflict
-slower decision making
126
give 2 pros of break even analysis
-helps planning and target setting
-cheap to construct and can be carried out quickly
127
give 2 cons of break even analysis
-factors may change so may be misleading
-assumes all output is sold
128
what are the 4 business ownership types?
-LTD
-PLC
-sole trader
-partnership
129
give 3 pros of a partnership
-shared workload
-varied skillset
-more sources of finance
130
give 3 cons of a partnership
-unlimited liability
-potential conflict
-profits split
131
give 3 business oportunities
-increase in customer demand
-gap in the market
-new developing market occurs
132
give 3 sources of guidance available to entrepreneurs
-already established businesses
-banks (loans)
-accountants (advise)
133
give 3 reasons why consumers need protection from exploitation by businesses
-to ensure consumer satisfaction of purchase
-to ensure goods sold don't contain harmful side affects
-to protect from misleading advertisement
134
what are subsides?
Financial assistance provided by the government to support economic activities (businesses) that it wishes to encourage.
135
give 4 factors that impact the supply of a product
-cost of production
-technology
-number of existing firms
-subsides
136
state 3 business opportunities for entrepreneurs
-can be own boss
-make a profit
-fulfil and interest
137
what are inferior goods?
goods that will increase in demand when incomes fall (elastic)
138
give an example of an inferior good
supermarket own branded food
139
what is a normal good?
a good that is least affected by income. these are usually a need (usually inelastic)
140
give 2 examples of normal goods
bread and milk
141
what is a luxury good?
a good that will increase in demand as income increases (these are elastic)
142
give an example of a luxury good
designer clothing
143
give 2 advantages of margin of safety
-helps the business to understand the level of cushioning they have
-helps alert the business about financial threats and indicates them to change selling price
144
give 2 disadvantages to margin of safety
-doesn't guarantee returns, only an indication to the business so doesn't prevent loss
-business may choose to ignore their margin of safety, making it ineffective
145
what is quantitative data?
data involving numerical values and can be measured
146
