End of year may exam business test Flashcards
(25 cards)
What are the three sectors of the economy?
- Private Sector
- Public Sector
- Third Sector
Each sector has distinct objectives and methods of financing.
What is the main objective of the Private Sector?
Profit maximisation
The Private Sector is set up and owned by private individuals.
How is the Public Sector financed?
Through taxation
The Public Sector provides quality services such as hospitals and schools.
What is the main objective of the Third Sector?
To provide a service that Private and Public sectors do not
Examples include charities and social enterprises.
What is a Sole Trader?
Owned and controlled by one person
This type of business has unlimited liability.
What are the advantages of being a Sole Trader?
- Easy to set up
- Keeps all profits
- Complete control
- Flexible working hours
Limited legal requirements are needed to establish this business structure.
What is the disadvantage of unlimited liability?
Owner’s personal assets can be sold to cover business debts
This is a significant risk for Sole Traders.
What are the features of a Private Limited Company?
- Owned by shareholders
- Run by a Board of Directors
- Shares sold privately
- Limited liability
Shareholders receive dividends based on the company’s profits.
What are the advantages of a Private Limited Company?
- Limited liability
- Easier to raise finance
- Diverse skills from directors and shareholders
This structure requires legal documents like the Memorandum of Association.
What is the primary objective of charities?
To meet the needs of the people they support
Charities are financed by donations and fundraising activities.
What is a social enterprise?
A business aiming to change the world for the better
Examples include Big Issue and Social Bite.
Who are considered internal stakeholders?
- Owners/shareholders
- Managers
- Employees
They have a direct influence on the success of the organization.
What is the interest of external stakeholders like customers?
Value for money and quality products
Customers can influence business success by choosing whether to buy.
What are some sources of finance for businesses?
- Shareholder investment
- Bank loan
- Mortgage
- Hire purchase
- Leasing
- Overdraft
- Trade credit
Different sources have varying implications for business operations.
What are the features of good customer service?
- Well-trained staff
- Quality product/service
- Quick customer service
- Clean premises
- Complaints procedure
- Guarantees and warranties
- Regular feedback collection
Good customer service can lead to increased customer loyalty.
What are the benefits of good customer service?
- Repeat customers
- Recommendations
- Increased sales
- Higher profits
- Fewer complaints
- Happy staff
- Good reputation
- Low staff turnover
These benefits contribute to long-term business success.
What is market segmentation?
Dividing the market into smaller groups based on shared characteristics
Characteristics can include age, income, and lifestyle.
What are the four elements of the marketing mix?
- Product
- Price
- Place
- Promotion
These elements work together to market a product effectively.
What are the stages of the Product Life Cycle?
- Introduction
- Growth
- Maturity
- Decline
Each stage has different sales and profit characteristics.
What is a brand?
A name, symbol, or logo associated with a product
Branding can influence consumer perceptions of quality.
What are the benefits of branding?
- Distinction from competitors
- Brand loyalty
- Higher price potential
- Easier introduction of new products
Effective branding can lead to increased market share.
What is the impact of poor packaging?
- Adds to cost per unit
- Can deter environmentally conscious consumers
Packaging should balance protection and marketing appeal.
What are some methods of surveying customer satisfaction?
- Questionnaire
- Interview
- Focus Group
- Comments Cards
Each method has its strengths and weaknesses in gathering feedback.
What is desk research?
Gathering existing information from secondary sources
Common sources include internet searches, government statistics, and trade journals.
