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A level edexcel Business 2024 > Theme 1 > Flashcards

Theme 1 Flashcards

1
Q

What is motivation

A

The will or desire to work due to enjoyment of work itself

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2
Q

Why is motivation important

A

-increase retention, reduces recruitment costs, increases productivity

- improve reputations, due to better customer service

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3
Q

What are the 4 theorists

A
  • Taylor
  • Maslow
  • Herzberg
  • mayo
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4
Q

Taylor features

A
  • scientific management
  • money motivates
  • piece rate
  • specialisation/division of labour
  • autocratic
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5
Q

Herzberg theory

A
  • 2 factor theory
  • hygiene factors
  • motivators
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6
Q

What are hygiene factors

A
  • hygiene factor: necessary to go to work, not motivating.

E.g. Pay, working environment

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7
Q

What are motivators

A
  • motivators: factors that motivate.

E.g. Training, bonus

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8
Q

Maslow theory

A 
- hierarchy of needs
Self actualisation (H)
Esteem (H)
Social belonging (H)
Safety (L)
Physiological (L)
- assumed all motivated by the above in order.
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9
Q

Mayo theory

A

workers motivated by having social needs met

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10
Q

What is a mass market

A
  • where a business sells into the largest part of the market

- where there are many similar products on offer

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11
Q

What is a niche market

A
  • where a business targets a smaller segment of a larger market - where customers have specific needs and wants
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12
Q

Mass markets characteristics

A
  • customers form majority of market
  • needs and wants more general
  • higher output and capacity
  • low cost, wide distribution
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13
Q

Niche market characteristics

A
  • loyal customers
  • higher profit margins
  • lack economies of scale
  • can attract competition if successful
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14
Q

What is market size

A
  • the total volume of a market

- in terms of no.of sales or value of sales

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15
Q

What is market share

A
  • the percentage/segment of a market which a business controls
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16
Q

Why are brands useful

A
  • product can be given ‘personality’

- product differentiation

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17
Q

What is a dynamic market

A
  • a market which is constantly changing
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18
Q

Four key factors to consider in dynamic markets

A
  • online retailing
  • how markets change
  • innovation and market growth
  • adapting to change
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19
Q

How does online retailing impact a dynamic market

A
  • development of technology
  • increase in online retailers
  • can cause store based retailers to lose market share
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20
Q

How does competition affect dynamic markets

A
  • can reduce market share of other companies
  • can stimulate innovation
  • can prevent monopolies
  • lower prices
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21
Q

Difference between product and market orientation

A
  • product, where a business chooses to focus on what it does best
  • market, where a business focuses on customer preferences
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22
Q

Pros and cons of secondary market research

A
  • cheap
  • usually based on sales figures
  • outdated
  • not specific
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23
Q

Pros and cons of primary research

A
  • specific to objectives
  • latest info
  • expensive
  • bias
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24
Q

Qualitative data examples

A
  • focus groups

- interviews

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25
Q

Quantitative research examples

A
  • sampling

- questionnaire

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26
Q

Limitations of market research

A
  • sample size

- sample bias

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27
Q

Uses of IT to support market research

A
  • social media
  • databases
  • websites
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28
Q

What is market segmentation

A
  • finding ways to divide a market up to identify untapped opportunities
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29
Q

Segmentation methods useful for larger businesses

A
  • add one niche product to portfolio

- multiple segmentation

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30
Q

What is market mapping

A
  • a visual way for a business to identify their position in the market and identify gaps in the market
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31
Q

Purpose of product differentiation

A
  • enables business to increase prices if costs increase

- protect product from competitors

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32
Q

What is adding value

A
  • the process of increasing worth of resources by modifying them
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33
Q

How can you add value

A
  • create a brand image
  • increase quality
  • branding/packaging
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34
Q

Factors leading to change in demand

A
  • price
  • competition
  • change in consumer income
  • trends
  • advertising
  • demographics
  • external factors
  • seasonal
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35
Q

Factors leading to change in supply

A
  • change in cost of production
  • new technology, lower prod costs
  • indirect taxes (VAT)
  • government subsidies, financial contribution
  • external factors
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36
Q

Supply axis

A

X axis - quantity

Y axis - price

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37
Q

PED

A

(%change in QD)/(%change in price)

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38
Q

Factors affecting PED

A
  • product differentiation
  • substitute goods
  • branding and brand loyalty
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39
Q

Classifying PED

A

0 = Perfectly inelastic
0 - 1 = inelastic
1 + = elastic

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40
Q

Value of PED to businesses

A
  • sales forecasting

- pricing strategy

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41
Q

How to reduce PED

A
  • product differentiation

- eliminate competition (predatory pricing)

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42
Q

Calculate YED

A

(%change in QD)/(%change in income)

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43
Q

Interpreting values of YED

A
  • Necessity (+ve YED 0 - 1)
  • luxury good (+ve YED 1+)
  • inferior good (-ve YED)
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44
Q

Factors influencing YED

A
  • necessity or self indulgence

- type of customer (affluent?)

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45
Q

Significance of income elasticity to businesses

A
  • sales forecasting

- financial planning

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46
Q

What aspects are in the design mix

A
  • aesthetics
  • function
  • economic manufacture
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47
Q

Changes in the design mix that reflect social trends

A
  • concern over resource depletion, sustainability
  • designing for waste minimisation and reuse , CAD
  • recycling
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48
Q

Benefits of branding

A
  • added value
  • premium prices
  • reduced PED
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49
Q

Types of branding

A

○ Manufacturer brand
○ Own-label brands
○ Generic brand

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50
Q

Manufacturer brand

A

created by the producers of goods/services.

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51
Q

Own-label brands

A

where the product are manufactured for the wholesalers/retailers.

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52
Q

Generic brand

A

where the products only contain the name of the product category

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53
Q

How to build a brand

A

USP/differentiation
advertising
sponsorship
social media

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54
Q

Changes in branding and promotion which reflects social trends

A
  • viral marketing
  • social media target market + crowdfunding
  • emotional branding
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55
Q

Promotion types

A
  • persuasive advertising, distinctive image
  • public relations, good relationship with journalists etc.
  • buy 1 get 1 free, stimulate demand
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56
Q

Pricing strategies

A
  • skimming
  • penetration
  • cost plus
  • competitive
  • predatory, eliminate rivals through low price
  • psychological
57
Q

Factors determining pricing strategy

A

USPs
PED
competition
strength of brand
stage in the product life cycle
costs and the need to make a profit

58
Q

Distribution channels

A
  • Four Stage Distribution Channel (traditional)
  • Three Stage Distribution Channel
  • Two Stage Distribution Channel
59
Q

Four Stage Distribution Channel

A

producer, wholesaler, retailer, and consumer

60
Q

Three Stage Distribution Channel

A

eliminates the wholesaler stage, with the producer selling directly to the retailer

61
Q

Two Stage Distribution Channel

A

eliminates both the wholesaler and retailer stages, with the manufacturer selling directly to the end consumer

62
Q

Stages of product life cycle

A

development
introduction
-growth
-maturity
-decline

63
Q

What is the use of the product life cycle

A
  • plan marketing strategy

- identify time of maturity and decline

64
Q

Extension strategies examples

A
  • new product
  • modified product
  • promotion, advertising campaign
65
Q

Methods used for product portfolio analysis

A
  • Boston matrix
66
Q

Boston matrix categories

A
  • cash cow (botton left)
  • rising star (top left)
  • question mark ( top right)
  • dogs ( bottom right)
67
Q

boston matrix axis

A

Y axis - market growth rate
X axis - Relative market share

68
Q

Purpose of product portfolio anlysis

A
  • building: identify where investment in marketing is needed
  • holding: maintaining sales
  • milking: taking profits without a lot of investment
  • divesting: selling off product
69
Q

Marketing strategy

A
  • plan for future marketing activity in order to achieve business objectives
70
Q

Marketing strategy for mass market

A

building brand awareness and appealing to a broad audience (Advertising campaign on TV and radio)

71
Q

niche market

A

smaller groups of customers with specific needs and want. e.g organic food stores, luxury car dealerships

72
Q

Marketing strategy for B2B

A

B2B marketing focuses on selling products to other businesses e.g. software companies selling to other businesses; manufacturers selling parts to other manufacturers

73
Q

Marketing strategy for B2C

A

B2C marketing focuses on selling products/services directly to consumers e.g clothing retailers

74
Q

How to develop customer loyalty

A

Customer service
Loyalty cards
Saver schemes

75
Q

Keys to a successful marketing strategy

A
  • specific
  • achievable
  • sustainable
76
Q

Approaches to staffing

A
  • staff as an asset, (pay pensions)
    staff as a cost, (zero hour contracts)

-

77
Q

Qualities of a flexible workforce

A
  • multi skilling, workers given variety of tasks
  • part time and temporary
  • flexible hours and home working
  • outsourcing
78
Q

What is a trade union and collective bargaining

A
  • organisation that employees pay to join in order to gain greater power and security at work
  • union bargains with employers on behalf of all workers
79
Q

What is individual bargaining

A
  • where an employee negotiates or bargains with employer on their own
80
Q

The recruitment process

A
  • job description
  • person specification
  • advertise
  • shortlist
  • selection
  • recruitment
81
Q

Methods of external recruitment

A
  • media advertising
  • job centres
  • commercial recruitment agencies
82
Q

+ve and -ve of internal recruitment

A
  • reduce recruitment/selection costs
  • promotion opportunity
  • lack of innovation
  • conflicts
83
Q

+ve and -ve of external recruitment

A
  • wider pool of candidates
  • increase innovation
  • expensive
  • demotivate workers
84
Q

Factors influencing choice of external recruitment

A
  • cost of recruitment method
  • size of the recruitment budget
  • location and characteristics of the likely candidates
85
Q

Methods of selection

A
  • interviews
  • testing and profiling, aptitude, examines personality
  • assessment centres
86
Q

+ve and -ve of induction training

A
  • allows to make new staff fully productive asap
  • avoids costly mistakes at work
  • not as productive as on the job
87
Q

+ve and -ve of on the job training

A
  • learn whilst working
  • specific to workplace
  • costly mistakes
88
Q

+ve and -ve of off the job training

A
  • allows employee to concentrate fully on learning
  • allow access to more experienced instructors
  • not productive
89
Q

What is levels of hierarchy

A
  • the number of different levels of management throughout an organisational structure
90
Q

What is span of control

A
  • the number of people directly under the supervision of a manager
91
Q

What is chain of command

A
  • the route through which information travels throughout the organisation
92
Q

What is centralisation

A
  • where decision making and power remains at the top management levels
93
Q

What is decentralisation

A
  • where decision making power is delegated to workers lower down in the organisation
94
Q

Type of organisational structures

A
  • tall
  • flat
  • matrix
95
Q

Tall organisational structure

A
  • small span of control

- long chan of command

96
Q

Flat organisational structure

A
  • large span of control

- short chain of command

97
Q

Matrix organisational structure

A
  • cross functional

- employees form different departments work as teams

98
Q

+ve and -ve of matrix organisational structure

A
  • encourages innovation
  • job enrichment
  • usually specialist, expensive
  • conflicts
99
Q

Why is organisational structure important

A

Poor organisational structure leads to:

  • poor communication leads to mistakes
  • duplication of tasks
  • task being overlooked
  • departments failing to work efficiently
100
Q

Consultation

A
  • asking views of the staff you manage and take their opinions into account
101
Q

Team working

A
  • attempt to maximise staff satisfaction and involvement
102
Q

Flexible working examples

A
  • flexitime
  • home working
  • job sharing
  • maternity leave
103
Q

Job enlargement

A
  • anything that increases the scope of a job
104
Q

Methods of job enlargement

A
  • job rotation

- job enrichment

105
Q

Types of leadership style

A
  • autocratic
  • democratic
  • paternalistic
  • laissez faire
106
Q

+ve and -ve of limited company

A

+ shareholders limited liability
+ gain access to wider range of borrowing opportunities
- public financial information
- follow more expensive rules

107
Q

+ve and -ve of unlimited company

A

+ dont have to disclose financial information
- legally no distinction between owners and business
-have to se their personal assets to pay debts or legal fees

108
Q

Ways of generating business ideas

A
  • observation
  • brain storming
  • thinking to future
  • personal/business experience
  • innovations
109
Q

What is an intrapreneur

A
  • characteristics of an entrepreneur but works within a large organisation
110
Q

Why is it risky to expand a small business rapidly

A
  • pressure on firms resources

- outstrip entrepreneurs capacity

111
Q

Skills required to be a successful entrepreneur

A
  • financial understanding
  • persuasive abilities
  • problem solving skills
  • networking skills
112
Q

What is profit satisficing

A
  • finding the ideal measure of profit without compromising sustainability
113
Q

Non financial motives for becoming an entrepreneur

A
  • independence
  • home working
  • ethical stance
  • social entrepreneurship
114
Q

Mission statement

A
  • summary of aims and values of a company
115
Q

Common business objectives

A
  • survival
  • profit maximisation
  • sales maximisation
  • market share
  • cost efficiency
  • employee welfare
  • customer satisfaction
  • social objectives
116
Q

Businesses with unlimited liability

A
  • sole traders

- partnerships

117
Q

Businesses with limited liability

A
  • private limited

- public limited

118
Q

What is psychological pricing

A

This pricing strategy takes into account the customer’s emotions, beliefs, and attitudes towards the product/service E.g. a business may set its prices at £9.99 instead of £10 as customers perceive the former as a better value

119
Q

What is market flotation

A
  • the process of changing an LTD to a PLC

- by issuing shares and getting public to buy them

120
Q

Other forms of businesses

A
  • franchise
  • social enterprise
  • lifestyle businesses
  • online businesses
121
Q

Opportunity coasts in developing a business idea

A
  • personal opportunity cost, long hours, stress

- opportunity coats of choosing one idea over another

122
Q

How do businesses decide between opportunities

A
  • predict potential sales
  • consider cash requirements
  • deciding whether time is right
  • deciding whether it is feasible skill wise
123
Q

Risks of overtrading

A
  • liquidity problems, if payment is not quick
  • inadequate funding
  • unable to pay staff or suppliers
124
Q

What does the creation of a marketing process involve for a business?

A
  • Decision 1: Choose which customers to serve
    This involves:
  • Market segmentation (analysing the different parts of a market).
  • Targeting (deciding with market segments to enter)

Decision 2: Choose how to serve those customers

  • This also involves two important parts of marketing strategy:
  • Product differentiation (what makes it difference from the competition)
  • Market positioning (how customers perceive the product)
125
Q

What is market positioning?

A
  • Market positioning refers to the consumer’s perception of a brand or product in relation to competing brands or products.
  • A market map/positioning map can be used to identify a range of positions a product can take in a market, using 2 dimensions important to customers.
126
Q

Possible dimensions for a market/positioning map?

A
  • Low price/high price
  • Basic quality/high quality
  • Necessity/luxury
  • Low volume/high volume
127
Q

Advantages and disadvantages of market/positioning maps?

A

+ spot gaps in market
+ analyse competitors
- gap doesn’t = demand
- dependant on reliability of research

128
Q

Importance of market positioning to a business?

A
  • Known identity allows business to target certain demographics.
  • Helps staff understand what is expected by customers from their service.
  • effective positioning conveys why the company is better than others.
129
Q

Difference between empowerment and delegation

A
  • empowerment worker as authority to manage and scope to decide what task
  • delegation passing authority down
130
Q

Methods of financial reward systems

A
  • piecework
  • commission
  • profit share
  • performance related pay
131
Q

What is cost plus pricing

A

The business calculates the cost of production and then adds a markup to determine the final price

132
Q

What is Price skimming

A

The business sets a high price for a new product/service when it is first introduced to the market

133
Q

What is Penetration pricing

A

The business sets a low price for a new product/service when it is first introduced

134
Q

What is predatory pricing

A

The business sets prices so low that it drives its competitors out of the market

135
Q

What is competitive pricing

A

The business sets its prices based on its competitors’ prices

136
Q

What is a public limited company

A

is a company that is able to offer its shares to the public. They don’t have to offer those shares to the public, but they can.

137
Q

Disadvantages for a public limited company

A

Additional regulatory requirements
Higher levels of transparency required
More vulnerable to takeovers

138
Q

Advantages for a public limited company

A

Better access to capital
Liquidity
Value of shares
Prestigious profile

139
Q

What is an entrepreneur

A

individuals who spot business opportunities and seize them by taking on risks.

A level edexcel Business 2024 (9 decks)

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