paper 2 revision

Question 1

why person may set up their own business

Answer 1

made redundant
own boss
flexible working hours
profit
recognition and status
creative / own ideas

Question 2

advantages of part time employees

Answer 2

flexible hours
more hours when busy
easier to recruit
willing to accept lower pay / only work when busy

Question 3

advantages of full time employees

Answer 3

trained
more committed
promotion
easier to communicate with

Question 4

features of leaflets

Answer 4

cheap printing costs
wide range of people
can contain promotion
can be kept for later use
may be seen as junk (-)

Question 5

features of the local newspaper

Answer 5

target market
not seen by young people
cheaper than national advertising
a lot of info
black and white

Question 6

features of social media

Answer 6

free
backs up reputation
video and audio can be added
can be targeted
may be seen as fake/scam

Question 7

ways break-even analysis = useful for business

Answer 7

sales needed for break even
safety / profit margin
profits/loss depending on output
effect of change in price OR costs on break even 
persuade bank manager --> loan

Question 8

roles of marketing

Answer 8

identify customer needs
satisfy customer needs
maintain customer loyalty
gain information about customers
anticipate changes in customer needs

Question 9

importance of quality

Answer 9

establishes a brand image
brand loyalty
good reputation
increases sales
attracts new customers
can charge a higher price
ensure food safety regulations are met
avoids costs of defects/waste
increases market share

Question 10

reasons why finance is needed

Answer 10

capital expenditure - machinery, owners capital insufficient
working capital - wages, output depends on it, prevents cash flow problems / illiquidity
new product - market research, outflow without inflow
start up - raw materials, not enough owners capital, time required to generate enough cash to pay for assets

Question 11

quality control (-)

Answer 11

costs of inspector
source of fault unknown
doesn’t eliminate faulty process
high costs of fixing defects

Question 12

quality assurance (+)

Answer 12

(define)
less customer complaints
less costs due to less defects
employees feel trusted = motivator

Question 13

quality assurance (-)

Answer 13

expensive to train employees
rely heavily on employees
longer to produce output

Question 14

application forms

Answer 14

wide range of written information
easier to compare applicants
time to review
applicants may lie
shows qualifications

Question 15

interview

Answer 15

can easily assess personality
tests for team work
if unfriendly...
increases costs
can explain questions

Question 16

aptitude test

Answer 16

cant lie about own skills
prevents unsuitable person being employed
easier to select most skillful person
expensive and time consuming

Question 17

increase in minimum wage

Answer 17

improved motivation
increased costs
costs may not changed if already above minimum wage 
competition for workers
increase in potential customers

Question 18

advertisement control

Answer 18

may need to be changed - less attractive
if truthful - no difference
competitors have to tell truth - may increase sales

Question 19

no waste plastic to landfills

Answer 19

increase costs to remove waste
if competitors have more waste - business has increased sales
train workers to be efficient

Question 20

environmentally friendly as a goal

Answer 20

brand image
less legal problems
employees prefer it
less pressure groups
...
higher costs
less competitive

Question 21

increase market share as a goal

Answer 21

higher sales
more dominant - influence prices
...
higher costs of marketing
may be higher than increase in revenue
no increase in market share if market growing same as sales

Question 22

survival as goal

Answer 22

avoid making a loss
easier to achieve other objectives
protects investments
...
not long term
may need to borrow if not making enough profit

Question 23

CAD adv

Answer 23

less labour
greater output
improved quality
less waste

Question 24

CAD dis

Answer 24

high costs
redundancy costs
training costs
may need to recruit skilled workers```

Question 25

improving employee skills adv

Answer 25

lower unit costs motivation greater output

Question 26

improving employee skills dis

Answer 26

higher training costs off-the-job = disruptive higher wages may find new jobs with new skills

Question 27

piece rate

Answer 27

``` taylors theory - money motivates higher pay for higher output higher wages quality may drop not for office staff ```

Question 28

profit sharing

Answer 28

``` payment from dividends higher rewards maslow - belonging less control less dividends / retained profit workers may prefer cash ```

Question 29

job rotation

Answer 29

``` less boring changes tasks more training less quality may do a job they dont like motivating until used to new tasks ```

Question 30

reducing marketing budget

Answer 30

``` reduces advertising costs loyal customers - dont need it known brand ... falling sales competitors less market research (in home and host country) ```

Question 31

increased investment in automated equipment

Answer 31

``` efficiency lower unit costs quality less employees ... higher costs redundancy debt training costs ```

Question 32

cheaper supplier

Answer 32

``` lower variable costs increases profit margin ... lower quality transport costs ```

Question 33

methods of primary research

Answer 33

``` questionnaire - cheap survey - cheap interview - face to face focus group consumer panel observation ```

Question 34

retailers

Answer 34

``` knowledge of market sets up outlets distribution costs ... less profit less control ```

Question 35

online selling

Answer 35

``` profit margin market research due to direct selling wider market cheaper price due to lower costs ... packaging and delivery broken in delivery access to internet fraud/hacking difficult to refund storage costs ```

Question 36

locating in country adv

Answer 36

``` jobs incomes + tax less imports competition = lower prices competition = wider choice ```

Question 37

locating in country dis

Answer 37

``` competition = local businesses suffer repatriation pollution depletion of natural resources less jobs if employees brought in ```

Question 38

importance of a brand image

Answer 38

``` give the product a USP differentiate a product from competitors encourages customer loyalty higher quality product than unbranded products can charge a higher price ```

Question 39

ways to use the internet

Answer 39

``` advertise online research competitor prices research different suppliers sell online email customers/supplier/employees pay invoices/internet banking video conferencing ```

Question 40

benefits of a organisation chart

Answer 40

shows how everybody is linked together in the organisation each individual can see their own position in the organisation it shows the links and relationship between different departments employees can see their position = belonging`

Question 41

reasons why batch production is suitable

Answer 41

demand for product/size of market nature of product size of business nature of demand

Question 42

effect on new production line on employees

Answer 42

``` increased output = higher wages training = job satisfaction new jobs = higher wages easier job ... some may lose their jobs may not like new job lose job = lower living standard = buy less products ```

Question 43

effect on new production line on shareholders

Answer 43

increased profit in LT share price increases ... reduced dividends in ST

Question 44

effect on new production line on banks

Answer 44

expansion = repay loans need additional loans makes profit from interest on loans ... investments takes time to increase revenue = delay in repaying loan if fails, bank loan not returned = loss of money

Question 45

bank loan as source of finance

Answer 45

``` large capital installments ... interest higher expenses collateral ```

Question 46

lease as source of finance

Answer 46

``` no capital maintenance covered ... not business's asset expensive ```

Question 47

retained profit as source of finance

Answer 47

``` no interest not repaid ... not enough opportunity cost ```

Question 48

competitive pricing dis

Answer 48

research costs disregard to quality many competitors - doesnt stand out

Question 49

adv of promotional pricing

Answer 49

getting rid of old products help to renew interests attracts more customers

Question 50

characteristics of employees

Answer 50

``` experience in job qualifications in job polite honest reliable good communicator hard working ```

Question 51

problems of high inventory

Answer 51

``` capital tied up costs of storage space inventory may worsen and wasted - loss of profit inventory may go out of date maintenance costs ```