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Business Component 1 > Enterprise > Flashcards

Enterprise Flashcards

1
Q

What is the definition of an SME, turnover

A

Small and medium-sized enterprise. Less than 50m

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2
Q

Definition of enterprise

A

A new business or development of a new good or service being introduced to the market

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3
Q

What is the primary sector and examples

A

First stage of production, use raw materials. Farms, oil, fishing fleets

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4
Q

Secondary sector - what it is, examples

A

Using primary resources to turn them into products. Manufactures and printers

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5
Q

Tertiary sector - what it is, examples

A

Provide services. Estate agents and delivery businesses

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6
Q

SME employees - small and medium

A

Small = less than 50, medium = less than 250

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7
Q

What types of businesses do SME’s tend to be

A

Sold traders, partnerships, private limited companies

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8
Q

SME’s - uk population + effect

A

Make up 99.9% of uk population, important to economy. Provide millions of employment for people, key driver of economic growth and sustainability

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9
Q

Importance of SME to uk economy - factors + expantion

A
  • Create jobs (pay tax and spend income on other products going into economy. 67% of uk private sector, 50% GDP)
  • create demand for products (more jobs created)
  • buy products from other businesses (generates wealth in economy)
  • pay tax to gov (pays for hospitals, police)
  • introduce new tech + innovation to market
  • create competition (good for consumer + growth)
  • encourage exports + investments in the UK
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10
Q

Drawbacks of SME’s - factors + expansion

A
  • Small scale (likely to fail in recession and hard ship)
  • smaller budgets (don’t have funds to compete with larger organisations, can’t invest as much into R&D, advanced tech, marketing/promotions -> affect ability to offer high quality solutions to customers)
  • less recognition, harder to compete
  • harder to raise finance and do not obtain economies of a similar scale compared to larger businesses
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11
Q

Needs - definition, examples

A

Limited number of needs, these must be satisfied in order to survive. Food, shelter, water, warmth, clothing

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12
Q

Wants- definition, examples

A

Infinite, something that humans desire. Designer clothes, holidays, mobile phones

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13
Q

What are some examples of gaps in the market

A
  • can it satisfy needs and wants
  • is there a gap in the market, will it be filled
    Does it offer a solution to a problem
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14
Q

What is always happening to the market

A

It is always changing, new opportunities constantly arise

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15
Q

What does an entrepreneur do

A
  • provide goods/services customers want or need
  • create and set up a business involving business idea and financial capacity to make it a reality
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16
Q

What is an entrepreneur

A

Someone who starts and runs a business

17
Q

What are the roles of entrepreneurs - factors, examples

A
  • setting up and owning/leading a business
  • organisation/managing/planing (setting up machinery, hiring staff, marketing)
  • risk taking (pay well lose money put into setting up business as no guarantee of success)
  • decision making (finance, employment, marketing)
  • create employment
    Acting as innovator (bring new products/services to market)
  • securing finance (internal, external)
  • business plan (sets out vision)
  • undertaking market research (degree of competition, whether or not gap exists in market)
18
Q

Entrepreneurial motives (drive for person to set up business) - factors, expansion

A
  • earn a profit (profit maximisation)
  • turn hobby or pastime into a business (tend to balance work, customer satisfaction and their freedom)
  • use redundancy money/create employment (losing job, with little chance of finding another, use this as start up capital)
  • be their own boss (control own destiny, freedom, fit commitments and family)
  • take ethical stance (intention of helping others)
  • social entrepreneurship (create sustainable profit making business also benefiting community
19
Q

Key characteristics of an entrepreneur - factors, analysis

A
  • risk taker (risk capital and time to create profits)
  • take initiative and proactive (don’t panic or get overwhelm, able to change when needed)
  • organiser (undertake a wide range of activities)
  • creative, innovative (coming up with innovative concepts and ideas, develop a better way of doing things)
  • hard working (52 hours per week, 40 hours thinking/worrying about business venture. Average working week for an employed person is 38 hours)
  • determined and perseverance (low success rates, be willing to keep trying if initial ideas fail)
20
Q

Importance of entrepreneurs

A
  • single minded, work hard, passionate, determined, take risks, organise production
  • innovators so bring new ideas to market and drive development of new tech
  • provide better way of doing things
  • help economy by creating new jobs
  • government taxation
21
Q

Definition of a stakeholder

A

A person, group or organisation that is affected by and/or has an interest in the operations and objectives of a business

22
Q

Examples of internal stakeholders

A

Employees, manager, owners

23
Q

External stakeholder examples

A

Suppliers, society, government, creditors, shareholders, customers

24
Q

Definition of stakeholders

A

They are groups within a business

25
Q

Shareholders - in theory common goals

A

Common objective of sustained long-term growth, the outcome of which provides capital gain and increases income

26
Q

Difference between institutional shareholders and small private shareholders

A

1) driven by need to acheieve short term goals. Require high dividends and stragtergies to achieve short term growth from business invested in
2) different to those wanting long term growth through reinvestment of profits and brand value

27
Q

What are shareholders looking for

A

High profits, high dividends, long term growth, prospect of capital gain, say in the business, a positive corporate image, preferential treatment as customers

28
Q

What do Directors and managers

A

achieving the long-term objectives of the business, gain most assests they manage. Protection of their position. Self preservation. Maximise salaries and benefits while cutting costs through reduncancies

29
Q

What do employees and workers want

A

receive a wage and possibly fringe benefits such as pensions, job security. Tech introduces = scared to reduce size of workforce. Can lead to industrial action. High pay, good working conditions, fair treatment, health and safety, promotion prospects, training opportunities

30
Q

What do customers want

A

satisfying the profitable needs of customers leads to financial success thus satisfy the other stakeholders. efficient service and a quality product, competitive price. Feel needed and respected. low prices, value for money, high quality products,, innovation, certain and regular supply, choice of goods, clear and accurate information

31
Q

What do suppliers want

A

depend upon the success of businesses for their sales, businesses depend upon suppliers in order to carry on their operations. mutually dependent. They want fair prices, businesses minimise costs.

32
Q

What do the government want

A

concerned with whether or not a business is operating within the constraints of the law, how many jobs a business is providing and how much tax a business has to pay. Benefits from businesses by increased tax revenues, higher employment, lower benefit payments however it also means increased pollution, increased traffic, loss of greenfield sites. balance business and economic growth against external costs of business activity

33
Q

What do local communities want

A

Benefit from employment prospects, increased regional wealth, improved facilities and infrastructure. Conflicts occur due to potential pollution, environmental damage, loss of open space

34
Q

Competitions as stake holders

A

interested in what other businesses offering similar products and services are doing, risk losing customers to rivals vice versa. Examples of looking sales offers, income/turnover, product variety, opening of new stores, opening hours, wages rates

35
Q

Stakeholder conflict

A

Difficult to meet all needs of stakeholders, needs may overlap, in which case they can join together to increase their power. needs may conflict, in which case the actions of one group may weaken the power of another

Business Component 1 (42 decks)

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