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Business > M C1 > Flashcards

M C1 Flashcards

1
Q

What is an SME?

And what is an SME defined by?

A

An SME is a small medium enterprise (business)

Defined by the number of employees turnover (sales) and net worth shown on a balance sheet

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2
Q

What are the 4 factors of production?

A

Capital

Enterprise

Land

Labour

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3
Q

What is an entrepreneur?

A

Someone who spots an opportunity and shows initiative and a willingness to take risks in order to benefit from the reward.

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4
Q

Creating and setting up a business will involve a number of steps including:

A
  • Generating an idea
  • asking if the idea can add value
  • conducting market research
  • drawing up a business plan
  • deciding on legal structure
  • raising finance
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5
Q

Running and developing a business will involve a number of activities including:

A
  • generating a customer base
  • designing a marketing mix
  • Sourcing supplies and managing stock
  • keep financial records
  • abiding by legislation
  • employing staff
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6
Q

FINANCIAL MOTIVES

what is profit maximisation?

A

-To make as much profit as possible

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7
Q

FINANCIAL MOTIVES

Formula for profit

A

Profit= sales revenue-total costs

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8
Q

FINANCIAL MOTIVES

What is profit satisfying?

A

To make enough profit to be satisfied but not be purely motivated by a profit.

May profit satisfy to maintain a work life balance.

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9
Q

NON FINANCIAL MOTIVES

Ethical stance

A

To behave in a manner deemed to be morally correct.

Provide a good or service that meet ethical beliefs eg cosmetics not tested on animals or clothes made from fair trade cotton.

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10
Q

NON FINANCIAL MOTIVES

what is social entrepreneurship?

A

Motivated by supporting a course rather than making a profit.
Any surplus revenue earned is used to further support that cause
Eg support the community or fund research.

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11
Q

NON FINANCIAL MOTIVES

Independence

A

Be your own boss and make your own decisions.

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12
Q

NON FINANCIAL MOTIVES

homeworking

A

Match family commitment to work commitments.

Work life balance.

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13
Q

SECTORS OF BUSINESS

Primary sector

A

Business that extract natural resources that can then be used by others to produce resources

Eg: Farming, fishing and extracting minerals
Raw materials

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14
Q

SECTORS OF BUSINESS

Secondary sector

A

Businesses that turn raw materials into finishes goods or components.
Value is added through the manufacturing process.

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15
Q

SECTORS OF BUSINESS

Tertiary sector

A

Business that provide services to individuals (B2C) or other businesses (B2B)

Eg: banking, retail and telecommunications

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16
Q

Entrepreneurs and SMEs impact on businesses in a number of ways:

A
  • creates competition
  • supply goods and services
  • offers specialism and expertises
  • buys goods and services
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17
Q

Entrepreneurs and SMES impact on the economy in a number of ways:

A
  • provide employment
  • pay taxes
  • social benefits
18
Q

Stakeholders

Internal

A
  • employees
  • owners
  • shareholders
  • supplies
19
Q

Stakeholders

External

A
  • customers
  • community
  • competitors
  • government
  • financial institutions
20
Q

GOOD AND SERVICES

consumer goods

A

Goods that are used directly by consumers to satisfy their needs and wants.

Normally bought in shops and online

B2C

21
Q

GOODS AND SERVICES

Producer goods

A

Goods that are used by businesses to make other goods or help them run their business.

These goods tend not not to be available in shops but from a specialist suppliers.

B2B

22
Q

GOOD AND SERVICES

Durable goods

A

These goods tend to have a long life span. They will be used until they break or are replaced.
There is no fixed time in durable goods but are expected to last at least 3 years.

23
Q

GOODS AND SERVICES

Non-durable goods

A

These are goods which are used or consumed for a single time or only once.

Often used immediately.
Life span is less then three years.

24
Q

DYNAMIC ENVIRONMENT

Competition

A

This is the rivalry between businesses who operate in the same market.

Compete to gain customers.

Achieved by altering elements of the business.

25
Q

DYNAMIC ENVIRONMENT

Perfect competition

A

Lots of competitors in a market this will increase the power of the consumer who will have a range of businesses that they can buy there products from.

26
Q

DYNAMIC ENVIRONMENT

Oligopoly

A

Where there are a few large competitors in the market

Will compete on factors other then price
Eg brand recognition and customer service

27
Q

DYNAMIC ENVIRONMENT

Monopoly

A

Where there is only one business selling a good or a service so are able to charge whatever price they want especially if the product is a necessity.

28
Q

DYNAMIC ENVIRONMENT

5 influences on the dynamic environment

PECTS

A
  • Political changes (new laws)
  • Economy
  • Competition
  • Technology
  • Social needs
29
Q

STAKEHOLDERS

Customers needs

A

Product range, quantity, price, access to location, success of business

30
Q

STAKEHOLDERS

Employees needs

A 
Wages 
Profit of the business 
Expansion 
Ethics 
Job security 
Good working conditions 
Health and safety
31
Q

STAKEHOLDERS

Shareholders needs

A

Profit of the business (dividends)
Expansion
Want to their investment grow

32
Q

STAKEHOLDERS

Governments needs

A

Profit of business (taxes)

Employment

33
Q

STAKEHOLDERS

Community’s needs

A

Employment
Expansion
Noise and traffic pollution etc

34
Q

STAKEHOLDERS

Suppliers needs

A

Cash flow-making sure they will get paid and making sure it’ll be on time
Loyalty
repeat customers
Ethics

35
Q

STAKEHOLDERS

Financial institutions

A

Profits of the business(how quickly they can be paid back-loans-bank)

36
Q

MARKETS

Mass market

A

Aimed at the majority but not everyone

37
Q

MARKETS

Niche

A

Aimed at a small section of the community

38
Q

MARKETS

Competition

A

Number of firms selling similar products to the same target market.

39
Q

MARKETS

Market size

A

This is the total value or the volume of sales in the market. It can be measured in the money terms eg £20m or by the amount sold eg 1m cars

40
Q

MARKETS

Formula for market size

A

Number of units sold x price

41
Q

MARKET

Market share

A

This is the proportion of total market sales that a firm has.

42
Q

MARKET

Formula for market share

A

Sales of one firm
————————— X 100
Total market sales

Business (6 decks)

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