Evaluation / Pros And Cons

Question 1

What qualities does an entrepreneur need

Answer 1

• Well rounded
• innovative
• resilient ( able to bounce back )
• risk taker
• committed

Question 2

Pros of private sector

Answer 2

Focus on profits means a business wants to provide what is demanded to a high quality

Focus on profits means business want to be efficient and not waste resources

Question 3

Pros of Public sector

Answer 3

Focus on what is beneficial for society rather than profitable

Doesn’t exploit or mislead customers

Question 4

Pros of sole trader

Answer 4

Making own decisions can be motivating
Setting up is easy
Decisions making is quick and responds rapidly to change in market
Take home all/ most profits

Question 5

Cons of sole trader

Answer 5

Source of finance limited
UNLIMITED LIABILITY
Rely on your decisions only
May have to work long hours and have limited holidays

Question 6

Pros and cons of partnership

Answer 6

Share resources
More sources of finance than sole trader
Cover is someone is absent

Share profits
May disagree over decisions
Unlimited liability

Question 7

Eval of franchise

Answer 7

Less risky
Pre established customer basis / loyalty
Will have support of franchisor

Costs alot of money
Profits hard to make

Question 8

Eval of joint ventures

Answer 8

Can share skills/ resources/ expertise and experience
Can collaborate without merging - easier

Agreeing on division of profits
Different views on decision making- conflict

Question 9

Eval of small business

Answer 9

Easy to set up
Flexible - not many workers
Often run by motivated individuals
Oftener creative aswell

Lack power ( market share)
Lack experience
Hard to raise finance

Question 10

Pros of training

Answer 10

Improve employee performance by developing new skills
Improve morale and productivity
Reputation for training will continue to attract and retain high quality and productive employees

Question 11

Cons of training

Answer 11

Could use up valuable resources
Time and money
Attendance at training may result in production suffering consequences

Question 12

Explain motivation theorists

Answer 12

McClelland - 3 A’s
Taylor - piece rate, division of Labour
Maslow - hierarchy
Hertzberg - hygiene and motivator
Vroom - Expect, instrum and valence
Mayo - social needs and teamwork

Question 13

Fayol 14 principles
(DADUUIRCSOESIE)

Answer 13

Division of work
Authority
Discipline
Unity of command
Unity of direction
Individual interest to general interest
Remuneration
Centralisation
Schalar chain
Order
Equity
Stability
Initiative
Espirit de corps

Question 14

Mintzbergs Roles of management

Answer 14

Interpersonal - leader, figurehead

Informational - monitor, spokesperson

Decisional - entrepreneur negotiator
( uses informational to make decisions )

Question 15

Eval of Autocratic leadership

Answer 15

Where rapid decision needed
Important message needs to be given out
For large numbers

Highly complex decisions
When lesson talented self motivated group

Question 16

Theory X and theory Y

Answer 16

X = money
Y = satisfaction/ commitment

Question 17

What are 5 Influences on demand

Answer 17

Competitors
Price
Income
Population
Promotional activities

Question 18

Eval of niche market

Answer 18

Targeted market
Larger firms = interest
High price for targeted products

Small market so returns not high

Question 19

Eval of mass market

Answer 19

Large scale = lower unit costs and lower prices
Large target market so sales and revenue will be high

Products do not differentiate or change to customer needs

Question 20

Market segmentation

Answer 20

Geographic - location ( weather / environment )
Demographic - age gender income occupation
Psychographic - personality lifestyle social class

Allows business to meet needs of customers more closely

Question 21

Marketing mix

Answer 21

Product
Place
Price
Promotion

Question 22

Product portfolio life cycle

Answer 22

Research and development, introduction, growth , maturity and decline

Question 23

Boston matrix

Answer 23

High high - Star
High MG and Low MS -Question mark
High MS and Low MS- Cash cow
Low low - Dog

Question 24

Eval of promotional methods
A, DP , SP, DP, PS

Answer 24

Advertising - Wide coverage, build loyalty and control of message - Expensive

Direct promotion - Cheap / may not be read

Sales promotion - entertain and interest customers - often ST

Personal selling - Two way com, answer enquires - expensive and only reach certain amount of customers

Digital promotion - very targeted, use influencers to attract - need to target effectively, will not reach those not online

Question 25

How to increase productivity

Answer 25

Training Longer working hours Investment in equipment and technology Motivation strategies Changing way work is done

Question 26

Eval of being sustainable

Answer 26

Good for environment and society Attract customer Avoiding negative comment in media Need to reconsider what is produced Reconsider how products are produced Reconsider packaging used

Question 27

Eval of Labour intensive

Answer 27

Production may be flexible Less expensive than set up of capital intensive Employees can use skills to Ben creative May take time to train May vary in consistency Volumes produced may be low

Question 28

Capital intensive evaluation

Answer 28

Can produce high volumes Output can be standardised/ consistent May be able to procure continuously Can be expensive to set up High fixed costs increasing BE Very difficult to customise products for individual customers

Question 29

Types of operation processes

Answer 29

Batch - items move together ( cup cakes) Flow - large scale ( bottled water) Mass customisation large scale but had flexibility ( Range Rover ) Job process - one off production

Question 30

Eval of Inventory

Answer 30

Products ready if needed Any delays / production not stopped Cost of storage Opportunity costs Security costs Risk of inventory becoming out of date

Question 31

Eval of just in time

Answer 31

Increases flexibility Decreases costs ( no storage) Minimise waste Relies on suppliers No buffer inventory Vulnerable Lose bill discounts

Question 32

Eval debt factoring

Answer 32

Can generate large and immediate inflows of cash Can reduce amount of profit in each sale May not be viable for businesses making very small profits

Question 33

Eval of sale and leaseback

Answer 33

Avoids need for any interest payments Retains the use of asses for the business and can raise large sums of finance Only business with saleable assets can engage Reduce business long term profits

Question 34

Eval of full costing

Answer 34

Allows to take all costs into account before making pricing decision Recommended by IFRS difficult to allocate indirect costs accurately - the allocations of often based in proportions of direct costs

Question 35

Uses of Break even

Answer 35

Help decide whether idea will be profitable Help decide level of output and sales to generate profit Support application for a business loan from a bank

Question 36

Eval of Break even

Answer 36

Simple allowing most entrepreneurs to use it Technique that can be completed quickly Add value in supporting a business for a loan It assumes all products are sold Simplification if real world Costs do not rise steadily as technique suggests

Question 37

Eval of budgets

Answer 37

Allows managers to endure a business does not overspend - should keep expenditure under control Can be used to motivate employees - increase satisfaction if stayed within budget If budgets get assigned to many employees training may be required Allocating budgets fairly in the interest of the business can be very difficult