Key Words Flashcards
(23 cards)
Mission statement
A short way of a business expressing their main intent
What is the purpose of a mission statement?
- sets purpose and primary objectives of a business
- memorable
- inspiring
- looks towards the future and where the business would like to be
Corporate objectives
Using the mission statement to create bigger objectives
What is the purpose of a corporate objective?
Aimed to satisfy shareholders (could relate to profit or dividends)
Entrepreneur
A person with a willingness to take a risk in order to achieve business success
What are the 4 factors of production?
1) land- location eg field
2) labour force
3) capital- money, assets
4) enterprise- entrepreneur makes the decisions
What are the four rewards for the four factors of production?
Land- rent
Labour- wages/salaries
Capital- interest
Enterprise- profit
What are some incentives for being an entrepreneur?
- money
- control over working life
- opportunity
- becoming redundant
- balance work with home life
- build on experience as an employee
- couldnt find a job
What is an intrapreneur?
A manager within a company who promote innovative product development and marketing
What is a patent?
The exclusive right to an inventor to manufacture, use and sell an invention (physical)
What is copyright?
The exclusive legal right given to the originator to publish and perform etc the material (e.g. Writing, music)
What do you understand about management?
Planning
Leading
Organising
Controlling
What are some management activities of an entrepreneur?
- problem solving
- manage people
- writing business plan
- research
- marketing/advertising
- production
- finance
- purchasing
What are the positives and negatives of becoming a partnership?
+each person specialises
+easier to raise capital
+more experience/help
- share profit
- share control
- unlimited liability
What are the positives and negatives of becoming a sole trader?
+keep profit
+control
_have to do all work
_unlimited liability
What are the positives and negatives of becoming a private limited company?
+can control number of shareholders
+limited liability
_lack of shareholders/public not involved
_little growth
What are the positives and negatives of becoming a public limited company?
\+anyone can buy shares \+limited liability \+greater potential for expansion -takeover from shareholders/lack of control -hard to come to agreement/decisions
Mass market
The dominant market, aimed at the general population. There is lots of competition in this market. E.g Colgate toothpaste aimed at everyone.
Niche market
A subset of the main market that addresses a specific type of person. They can charge higher prices as the is less competition. E.g sensodyne sensitive toothpaste
Pros of a mass market
- large scale production- economies of scale
- straight forward
- large volume sales- high revenue
- revenue can be used for r & d
Cons of a mass market
- competition
- marketing expensive
- high volume production not flexible to demand changes
- homogenous (all the same) products need to be differentiated
Pros of niche market
- charge premium price
- easier to target customers
- small scale production can he flexible and follow trends
- less competition
Cons of niche market
- very risky- demand not constant
* higher unit costs so no economies of scale
