Exam content Flashcards
(125 cards)
1
Q
Sectors of economy
A
Private, public, third
2
Q
Private sector of economy definition
A
The sector of economy made up of businesses which are owned and controlled by private individuals which want to maximise profit and grow the business.
3
Q
Public sector definition
A
The sector of economy which is made up of non profit businesses which are owned and controlled by the government and have the goal of providing a high quality service to the public.
4
Q
Third sector of economy definition
A
The sector of economy made up of non profit organisations which want to develop the community and help raise funding and awareness for ethical causes.
5
Q
Private sector goals
A
Maximise profit
Grow the business
Good corporate social responsibility
High customer satisfaction
6
Q
Types of private sector businesses
A
Sole trader,
Partnership,
Private limited company
7
Q
Public sector goals
A
Provide high quality service
Good corporate social responsibility
Stay within allocated spending budget
8
Q
Third sector business goals
A
Increase awareness of a cause
Increase funding for a cause
Develop the local community
9
Q
Types of third sector business
A
Charity
Social enterprise
Voluntary organisations
10
Q
Sole trader features
A
Private sector of economy
Unlimited liability
One owner and one controller
No legal work needed for setup
11
Q
Partnership features
A
Private sector
Unlimited liability
2-20 owners and controllers
Needs a deed of partnership for setup
12
Q
Private limited company features
A
Private sector of economy Owned by shareholders Controlled by directors Limited liability Memorandum and article of association necessary for setup.
13
Q
Government organisations features
A
Owned by the government
Controlled by the government
Financed through taxes and budget
Public sector of economy
14
Q
Social enterprise feature
A
A business in the third sector of economy
Functions like a private sector business
Owned by private individuals
Controlled by the owners
Has to invest half of profit to ethical causes
Other half of profit has to go into growing the business
Profit doesn’t reward owners.
15
Q
Charity features
A
Third sector of economy
Owned and controlled by a trust
Non profit
Goal of raising funds and awareness
16
Q
Voluntary organisations features
A
Controlled by board members
Third sector of economy
Purpose of developing the community
17
Q
Private sector business objective
A
Maximise profit Maximise sales Maximise market share Good CSR Grow the business
18
Q
Public sector business goals
A
Provide high quality service to the public
Good CSR
Stay within budget
19
Q
Third sector business goals
A
Maximise awareness and funds through profit/donations
Help develop community
20
Q
External factors definition
A
Factors outside of a business which affect the success of the business.
21
Q
External factors types
A
Political Economic Social Technological Environmental Competitive PESTEC
22
Q
Political external factor explain
A
An example of a political external factor is an introduction of new legislation. New legislation can lead to a business spending extra time training staff to abide to these laws, therefore this can lead to a decrease in productivity.
23
Q
Economic external factor explain
A
An example of an economic external factor is a boom . This is an increase in gross domestic product which will make the income of the public more disposable, therefore this can lead to an increase of sales in the business.
24
Q
Social factor explain
A
An example of a social factor is a change in tastes and trends. This will lead to products going out of fashion and the business having to do market research to make their products appealing to their target market.
25
Technological external factors explain
An example of a technological factor is new machinery. New machinery can allow for the product to be produced faster and more cost effectively. Therefore this will lead to an increase of productivity or profit.
26
Environmental factors explain
An example of an environmental factor is plastic use. If a business uses a lot of plastic that isn’t recyclable in its products this will lead to a decrease of corporate social responsibility because the business is harming the environment.
27
Competitive external factor explain
An example of a competitive factor is competitor price drops. This can lead to a decrease of market share as the competition will steal customers away from your business and a decrease in market share.
28
Examples of political factors
```
Legislation
Income tax change
Corporation tax change
VAT change
Brexit
```
29
Examples of economic factors
```
Boom
Recession
Tariffs
Interest rates
Exchange rates
```
30
Social factors
Tastes and trends
Life expectancy
More awareness about ethics
31
Technological factors
New medical research
New machinery and equipment
E commerce
32
Environmental factors
Plastic use
Weather
Pollution / carbon footprint
33
Competitive factors
Competitor price drops
| Competitor new products
34
Stakeholders examples
```
Owners
Shareholders
Employees
Banks
Customers
Suppliers
Local community
Local government
National government
```
35
Internal stakeholders definition
An internal stakeholder is anyone who has an interest in the success of the business inside the business.
36
External stakeholders definition
Anyone who has an interest in the success of the business outside of the business
37
Internal stakeholders examples
```
Owners
Managers
Employees
Shareholders
Directors
```
38
External stakeholders examples
```
Customers
Local community
Government
Banks
Suppliers
```
39
Types of market research
Field and desk
40
Methods of field research
```
Online survey
Postal survey
Face to face interview
Hall tests
Focus groups
```
41
Methods of desk research
Newspapers
Books/textbooks
Government statistics
Websites
42
Field research definition
Where a business goes and collects primary information for a specific purpose by carrying out their own research.
43
Desk research definition
Where a business uses existing sources to gather secondary information about the market or product.
44
Advantages of field research
Not available to competition
More relevant
Up to date
45
Disadvantages of field research
Still can be unreliable
More expensive than desk
More time consuming than desk
Needs trained professionals
46
Advantages of desk research
Cheaper than field
Quicker than field
Doesn’t need trained professionals
Large quantities can be gathered
47
Disadvantages of desk
```
Can be:
difficult to interpret
Out of date
Irrelevant
Available to competitors
```
48
Market research advantages
Gather feedback on how to improve products
Gather info on the marketing mix of a product
Find out if there is a demand for a product
49
Market research disadvantages
Expensive and wastes time
Could be inaccurate
Could lead to bad business decisions
50
Product development stages
```
Generate the idea
Analyse the idea
Produce the prototype
Test the market
Alter the product
Produce the product
```
51
Generate the idea
Where the business comes up with the idea of the product that will be sold to customers
52
Analyse the idea
The stage where the business looks to see if the product is possible, checks for existing products, competitors and to see if it is legal.
53
Produce the prototype
Where the business manufactures a one off product to see what it looks like, test it’s safety and its performance.
54
Test the market
Where the business carries out market research to ensure the public have a demand for the product and for constructive criticism to make the product better.
55
Alter the product
Where the product is altered based on feedback from the public to make the product more appealing to the public.
56
Alter the product
Where the product is altered based on feedback from the market research to make the product more appealing to the public.
57
Produce the product
This is where the first units of products are manufactured to be sold to the public.
58
Branding definition
Where a recognisable character is given to a business /product or product ranges to make them stand out form competitors.
59
Branding definition
Where a recognisable character is given to a business /product or product ranges to make them stand out form competitors.
60
Advantages of Branding
```
More memorable
Higher quality
Stand out from competition
Increase sales
Can release new products without great risk.
```
61
Disadvantages of branding
Expensive to maintain
Bad publicity can tarnish entire product ranges
Failed products can tarnish entire product ranges
62
Packaging advantages
Protects the product
Can be branded
Gives extra necessary information
63
Disadvantages of packaging
Can be bad for the environment
Has to show contents of product for food so can off put customers
Leads to bad CSR
64
Pricing strategies
```
Premium
Low
Cost plus
Competitive
Promotional
```
65
Promotional pricing definition
Where the business uses sales promotional strategies like discounts on products to pressure customers into buying the product.
66
Cost plus pricing definition
Where the business adds a markup cost to the manufacturing cost to get their final product price so they know exactly how much gross profit they are making per sale.
67
Competitive pricing definition
Where the business equals their competition’s product prices in hopes of stealing their loyal customers away from them, if successful this can increase market share but a better marketing mix is necessary for this to work.
68
Premium pricing
Where the business charges more money for their product to give it an image of being of higher quality.
69
Low pricing
Where the business charges as little as possible for their production hopes of maximising sales.
70
Methods of advertising
```
TV
Social media
Radio
Billboards
Apps
Celebrity endorsement
Newspapers
```
71
Tv advantages
Can show the product to the audience and reaches across countries or worldwide
72
Social media advantages
Reaches younger generations and worldwide audience
73
Radio advantages
Target the local community or nationally and allows for jingles and slogans to be played.
74
Billboards advantages
Can attract a lot of attention in populated areas
| Can show logos
75
Apps advantages
Targets specific types of consumers in the market and broadcast worldwide
76
Disadvantages of tv
Extremely expensive
77
Disadvantages of social media
Restricts older generations and ads disrupt and annoy consumers
78
Billboards disadvantages
Only works in populated areas, can’t use a jingle to make the product memorable.
79
Apps disadvantages
Disrupting and irritating
80
Advertising definition
Where a business uses media to promote and inform the public about a product.
81
Factors to consider when choosing a location
```
Size of property
Population of the local area
Cost of the property
Distance from target market
Distance from supplier
Government incentives
Distance from competitors
```
82
Technology in marketing examples
```
Website
Database
Desktop publisher
Email
Online survey
Social media
```
83
Websites (TM)
Allows for information about products to be distributed to customers and also allows for e - commerce
84
Database (TM)
Store customer information
| Store market research documents
85
Desktop publisher TM
Creates posters and billboards for advertising
86
Email TM
Used to contact customers to inform them about promotional deals
87
Social media TM
Advertise the product and promote the business
| Generate CSR by showing ethical activities
88
Factors affecting suppliers
```
Price
Quality
Distance
Lead time
Reliability
Credit terms and economies of scale
```
89
Inventory management types
Computerised and manual
90
Computerised inventory control
Where the business uses a computer to manage and keep track of the inventory level in the business
91
Manual inventory control
Where a business uses staff to update and manage the level of inventory in the business.
92
Advantages of computerised stock control
More secure than manual
Costs less than hiring an employee in the long run
More accurate than manual due to no human error
automatically contacts supplier
93
Disadvantages of computerised stock control
Glitches or power cuts can cause the system to crash or could lose information on inventory level.
High capital start up cost means it isn’t available to small businesses
94
Advantages of manual inventory control
Has a low start up cost
Good for businesses that don’t sell large numbers of units
Doesn’t shut down with glitches and power cuts
95
Disadvantages of manual stock control
Less accurate (more human error) than computerised
Less secure than computerised
Someone needs to contact supplier
Costs more in the long run than computerised
95
Disadvantages of manual stock control
Less accurate (more human error) than computerised
Less secure than computerised
Someone needs to contact supplier
Costs more in the long run than computerised
96
Methods of production
Job
Batch
Flow
97
Job production definition
Where a business receives an order from a customer and an employee/ employees will manufacture the product from start to finish with the customers exact requirements and needs being fulfilled.
98
Advantages of job production
Customisable
Seen as higher quality
Can charge a higher price
Labour intensive so no large startup cost
99
Disadvantages of job production
Labour intensive so needs skilled workers
Can’t manufacture the product quickly
Likely to be human error
No economies of scale or bulk buying
100
Batch production definition
Where a business manufactures their products in groups, the products within each group are identical but the groups have slight differences.
101
Advantages of batch production
```
Can be capital or Labour intensive
Can produce a variety of different products quickly
Raw materials can get scales of economy
Batches are identical
Faster than job production
```
102
Disadvantages of batch production
Slower than flow production
Workers can be idle in between batches
Mistakes ruin entire batches
Not completely customisable like job .
103
Flow production definition
Where a business manufactures their product on a capital intensive production line, where components are added to the product. Each product is standardised and identical with very little customisable potential.
104
Advantages of flow
```
Capital intensive so no human error
Good economies of scales
Works 24/7
Standardised products
Low wages due to low skill levels
```
105
Disadvantages of flow
Can’t customise the product
The entire production line can stop if one machine breaks down
Demotivated staff
High startup cost prevents small businesses utilising this method
106
Ethical operation definition
Where a business ensures that the manufacturing and transport of their product don’t negatively impact on the environment or on the welfare of people and animals and the community
107
Advantages of ethical operations
Good CSR
Attracts good employees
Marketing strategy
108
Disadvantages of ethical operations
Makes the product more expensive to manufacture
| Lose access to inethical suppliers making it difficult to get raw materials
109
Methods of quality endurance
Quality control
Quality assurance
Quality training
High quality raw materials
110
Quality control
Where a business checks the standards of the product at the end of production to save time
111
Quality assurance
Where the business checks the standard of the product at the end of each stage of production to decrease waste.
112
Quality training
Where a business teaches their staff to complete their tasks to a higher standard, faster and with less mistakes
113
High quality raw materials
Where a business uses a high standard of supplier and only the best raw materials to ensure the final product is a higher standard.
114
Recruitment stages
```
Identify job vacancy
Analyse job vacancy
Create a job description
Create a person specification
Advertise the vacancy
Send out applications /ask for CV’s
```
115
Selection stages
Take in applications
Create a shortlist
Refine the selection
Appoint the most suitable candidate
116
Technology in HR
```
Video conferencing
Email
Websites
Social media
Database
word
```
117
Word HRT
Used to make HR documents such as contract of employment, job description and person specification
118
Email HRT
Used to send out applications in recruitment
119
Websites HRT
Used to advertise the job vacancy in the recruitment stage
120
Databases HRT
Databases can be used to store important employee information and important employee documents such as a contract of employment securely.
121
Video conferencing HRT
Used in HR to quickly set up meetings between branches allowing for quicker meetings to be held and employees to have the chance to work from home.
122
Sources of finance
```
Bank loan
Mortgage
Own equity
Share issue
Government grant
Bank overdraft
Taking on an additional partner
```
123
Cash budget features
```
Opening balance
Receipts
Total cash available
Payments
Total payments
Closing balance
```
124
Income statements features
```
Sales revenue
Less: cost of sales
Opening stock
Closing stock
Gross profit
Expenses
Total expenses
Profit for the year
```
