Theme 2 Flashcards
(140 cards)
1
Q
What are the two main types of business growth?
A
Internal growth and external growth
Internal growth is also known as organic growth, while external growth is referred to as inorganic growth.
2
Q
Define internal growth in a business context.
A
Expansion by itself, entering new markets or bringing out new products.
3
Q
What does innovation in business refer to?
A
Creating new products or services.
4
Q
What is a potential risk associated with innovation?
A
Higher risk due to uncertainty of success.
5
Q
What is the significance of market research in innovation?
A
Identifying gaps in the market and assessing customer demand.
6
Q
What is external growth in a business?
A
Growth by joining with another business through mergers or takeovers.
7
Q
What are mergers?
A
When two or more businesses agree to join together.
8
Q
What is a takeover?
A
When one business takes control of another.
9
Q
What are some advantages of becoming a public limited company (plc)?
A
- Raise additional finance through selling shares
- Seen as more reliable and prestigious
- May buy in bulk for better prices
10
Q
List disadvantages of being a public limited company.
A
- Greater risk of being taken over
- Loss of control due to share ownership
- Requirement to declare financial records
- Increased media attention
11
Q
What defines a multinational business?
A
A business operating in more than one country.
12
Q
What are advantages of multinationals?
A
- Wider target market
- Good reputation
- Spread risk of failure
- Access to cheaper labor
13
Q
What are disadvantages of multinationals?
A
- Cultural and language differences
- Potential negative publicity
- Profit uncertainty due to exchange rate fluctuations
14
Q
What are retained profits?
A
Profits made from previous years reinvested in the business.
15
Q
What is a disadvantage of using retained profits?
A
Less available for shareholders as dividends.
16
Q
What does selling assets involve?
A
Selling land, buildings, or machinery to raise funds.
17
Q
What is a bank loan?
A
Borrowing money that needs to be repaid with interest.
18
Q
Differentiate between a bank loan and a mortgage.
A
- Bank loan: shorter term (1-7 years)
- Mortgage: longer term (20-30 years)
19
Q
What is the purpose of new share issues?
A
To raise finance by selling shares to the public.
20
Q
What is a trading bloc?
A
A group of countries that trade freely with each other.
21
Q
What is globalisation in business?
A
Operating on an international scale, selling and buying in multiple countries.
22
Q
What are imports?
A
Items bought from abroad.
23
Q
What are exports?
A
Goods produced in one country and sold in another.
24
Q
What is a tariff?
A
A tax imposed on imported goods to protect local businesses.
25
How does e-commerce influence global business?
It allows businesses to compete internationally and communicate globally.
26
What is the impact of ethical considerations on business?
Guides actions like fair treatment of workers and consumers.
27
What are potential trade-offs between ethics and profit?
Ethical practices may increase costs but can enhance reputation and sales.
28
Define sustainability in a business context.
Using natural resources responsibly to protect the environment.
29
What is the impact of pressure groups on businesses?
They influence public opinion and business practices.
30
What changes might a business make in response to new technology?
Incorporate technology into objectives and operations.
31
Fill in the blank: A business may change its objectives due to _______.
[market conditions, technology, performance, legislation, internal reasons]
32
What is sustainability?
Making sure that natural resources are used responsibly to protect the environment for the future.
33
What is a pressure group?
A group of people with a similar aim or interest who join together to influence public opinion on government policy or actions.
34
What are some actions pressure groups can take?
* Boycotting products
* Raising petitions
* Protesting in public
* Running media campaigns
* Lobbying politicians
35
Define the design mix.
The three fundamental elements of product or service design: aesthetics, function, and cost.
36
What does 'function' refer to in the design mix?
How well a product does its job, ease of use, speed, or convenience.
37
What is meant by 'aesthetics' in product design?
The look, feel, and visual appeal of an item.
38
What does 'cost' refer to in the design mix?
The expense incurred to make the product.
39
What is the product life cycle?
The progression of a product through five main stages: development, introduction, growth, maturity, and decline.
40
What occurs during the development stage of the product life cycle?
Initial idea generation, product development, and testing, which is a costly stage with no sales.
41
What marks the introduction stage of the product life cycle?
The product is launched and first sales are made, requiring significant promotional spending.
42
What happens during the growth stage of the product life cycle?
Sales increase rapidly and more distribution points are needed.
43
What characterizes the maturity stage of the product life cycle?
Sales slow down, competition may increase, and businesses start evaluating promotion and pricing strategies.
44
What defines the decline stage of the product life cycle?
Sales start to fall, and decisions are made on whether to let the product die or boost sales.
45
What are extension strategies?
* Dropping price
* More advertising
* Persuading customers to buy more
* Selling abroad
* Changing packaging
46
What is differentiation in marketing?
Creating a distinctive or unique aspect about a product or service to succeed in a competitive market.
47
What factors influence pricing strategies?
* Cost of production
* Demand for the product
* Competition
* Business objectives
48
What is high-volume pricing?
Producing many items at low cost, allowing for a low selling price.
49
What is high-margin pricing?
A significant difference between production cost and selling price, often for higher quality or exclusive items.
50
True or False: Technology influences pricing strategy.
True
51
What are the main types of advertising media?
* TV
* Radio
* Digital
* Print
* Outdoor
52
What is sponsorship in marketing?
Supporting a team, individual, or event for publicity.
53
What are product trials?
Offering free access or giving items away initially to encourage future purchases.
54
What are special offers in marketing?
Sales promotions designed to boost sales over a short period.
55
What is branding?
Creating a reputation and image for a product or business to attract customers.
56
What is zero level distribution?
There are no intermediaries between the producer and customer.
57
What is one level distribution?
There is one intermediary between the producer and customer.
58
What is two level distribution?
There are two intermediaries between the producer and customer.
59
What are the potential benefits of using intermediaries in distribution?
* Reach a larger customer base
* Save costs in distribution
* Provide product comparison opportunities
60
What factors should be considered when selecting a distribution channel?
* Costs
* Control
* Product type
* Sales impact
61
What is the impact of distribution on sales?
If a product is not available when a customer wants it, sales will fall.
62
What is the impact of distribution on the final price of a product?
Costs and distribution methods affect the final price. More intermediaries increase final price as each needs to make a profit.
## Footnote
High quality brands avoid cheap stores to protect their image.
63
Why is 'place' an important element in the marketing mix?
'Place' is crucial because effective distribution ensures products are available where customers want to buy them, influencing purchasing decisions.
## Footnote
If a product isn't available, customers may choose alternatives.
64
How do promotion and price influence each other?
High premium pricing may require effective promotion to convince customers of its value.
## Footnote
Aesthetic and feature promotion can justify higher prices.
65
What is the relationship between promotion and place?
Effective promotion creates demand, necessitating accessible locations for purchase. Poor accessibility can limit sales despite promotion efforts.
## Footnote
Online sales are essential for accessibility.
66
Are all elements of the marketing mix equally important?
It depends on the product or service and competition; some elements may be more critical than others.
## Footnote
High-end products may sell regardless of price.
67
What is the transformation process in business operations?
The transformation process is converting inputs (land, labor, capital, materials) into outputs (finished products or services).
68
What are the key factors measured in the transformation process?
* Productivity
* Efficiency
* Flexibility
* Quality
69
What is job production?
Job production is creating items tailored to individual customer needs, typically used for small volumes.
## Footnote
Examples include custom wedding dresses and personal trainers.
70
What are the advantages of batch production?
* Speed due to machinery
* Ability to produce large quantities
* Specialization of tasks
71
What are the disadvantages of batch production?
* Risk of unsold products
* Need for accurate sales estimation
72
What is flow production?
Flow production involves continuous movement of items through production stages, suitable for large volumes of identical products.
73
What are the advantages of flow production?
* High volume output
* Specialization increases efficiency
* Lower average costs
74
What are the disadvantages of flow production?
* High initial setup costs
* Lack of flexibility
* Potential worker dissatisfaction due to repetitive tasks
75
How can efficiency in production be improved?
By increasing outputs from the same or fewer resources, often through technology, which can also reduce costs.
## Footnote
Technology enables 24-hour production.
76
What is procurement?
Procurement is the process of buying items from suppliers, involving agreements on prices, delivery, quality, and trust.
77
What are the two forms of stock in a business?
* Raw materials
* Finished products
78
What are the consequences of poor stock management?
* Running out of materials affects production
* Excess stock increases costs and waste
79
What is just-in-time stock control?
Just-in-time stock control means producing items only when there is an order, minimizing stock levels.
## Footnote
Nissan uses this method for efficiency.
80
What defines good quality in a product?
Good quality is when a product meets or exceeds customer expectations, which can vary widely.
81
What are some methods for measuring quality?
* Customer feedback
* Mystery visitors
* Staff inspections
82
What are costs associated with achieving better quality?
* Inspection and checking costs
* Training costs for staff
83
What are the costs of poor quality?
* Product recalls
* Replacing faulty goods
* Legal actions
84
Why does quality matter to a business?
Quality fosters customer loyalty, reduces costs from mistakes, and provides a competitive advantage.
## Footnote
Good quality products are seen as excellent value for money.
85
What is the importance of good product knowledge in sales?
Good product knowledge enhances customer satisfaction by demonstrating how products meet their needs.
86
What is the primary goal of quality management?
To set and achieve targets that customers want repeatedly.
## Footnote
Achieving good quality may require initial investment but can save money in the long run.
87
What are the two approaches to customer engagement in sales?
* Hard approach: actively engages customers to encourage purchases
* Soft approach: allows customers to browse and approach when needed.
88
Why is speed and efficiency important in service delivery?
Customers may go elsewhere if they have to wait too long.
89
What is essential for customer engagement during sales transactions?
Continual engagement is crucial, especially for large purchases.
90
What role does post-sales service play in customer satisfaction?
It provides guidance and support for product use and addresses complaints.
91
How can customer feedback improve business processes?
It helps businesses identify areas for improvement in their sales process.
92
What is the impact of good customer service on customer loyalty?
Good service can result in higher customer loyalty and competitive advantage.
93
What is the purpose of using mystery shoppers?
To evaluate the quality of the sales process and gather feedback on service.
94
What is a Profit and Loss Account (P&L)?
A financial statement that businesses must produce to show revenue, costs, and profits.
95
What is the difference between Gross Profit and Net Profit?
* Gross Profit: profit after deducting cost of sales
* Net Profit: profit after all costs are deducted.
96
What does the Gross Profit Margin indicate?
It compares gross profit to sales revenue, showing how efficiently a business produces its products.
97
What is the formula for calculating Net Profit Margin?
Net Profit Margin = (Net Profit x 100) / Revenue.
98
What is the Average Rate of Return used for?
It helps in making investment decisions by evaluating the annual income generated over the investment's lifetime.
99
What is the significance of reading performance data?
It allows businesses to monitor performance trends over time.
100
What types of data are important for market analysis?
* Market size
* Number of competitors
* Average prices
* Average incomes
* Population changes
* Unemployment rates.
101
What is the difference between Quantitative and Qualitative data?
* Quantitative: numerical data that can be easily measured
* Qualitative: descriptive data about individual opinions and attitudes.
102
What are the impacts of time delays in financial information?
Information can become out of date and hinder decision-making.
103
What is a Tall Organization Structure?
An organization with many levels of authority and a narrow span of control.
104
What is a Flat Organization Structure?
An organization with fewer levels of authority and a wide span of control.
105
What does Centralisation in management refer to?
A structure where senior managers make all decisions with little input from junior employees.
106
How does Decentralisation benefit a business?
It reduces pressure on senior managers and empowers employees to make decisions.
107
What are some barriers to effective communication?
* Spelling errors
* Different languages
* Jargon
* Cultural differences.
108
What are the stages of the recruitment process?
* Identify need for new employees
* Create a job description and person specification
* Advertise the job
* Receive applications.
109
What is included in a Job Description?
Title, duties, hours, and reporting structure.
110
What does a Person Specification outline?
Skills, experience, and qualifications needed for the job.
111
What types of contracts can temporary workers have?
* Fixed-term contracts
* Seasonal contracts.
112
What is the impact of technology on communication?
Technology improves efficiency and allows for faster communication.
113
What does the person specification consider?
Skills, experience, and qualifications needed for the job.
## Footnote
Some qualities and qualifications are essential while others are desirable.
114
Where can job adverts be placed?
Local or national newspapers, specialist magazines, job centres, or internet.
## Footnote
The choice depends on the job and specialist skills needed.
115
What are the methods of application for a job?
Letter of application, curriculum vitae (CV), or an application form.
## Footnote
This includes personal information relating to job suitability.
116
What is the purpose of shortlisting in the selection process?
To match applications to the job description and person specification.
## Footnote
A shortlist typically consists of 5 or 6 candidates.
117
What is the main goal of interviews during the selection process?
To assess candidates' ability to perform the job and their personality fit.
## Footnote
Some candidates may perform poorly in interviews despite potential.
118
What are psychometric tests used for?
To find the personality of the candidate to see if they fit the business or team.
## Footnote
These tests are usually multiple choice.
119
What are assessments in the selection process?
Tests to evaluate candidates' abilities for specific tasks.
## Footnote
Examples include teaching a lesson or solving a problem.
120
What is internal recruitment?
Promoting someone from within the business or transferring them to another job.
## Footnote
This is typically advertised through internal notices.
121
List advantages of internal recruitment.
* Experience of the business
* Cost-effective
* Familiarity with coworkers
* Opportunities for promotion
122
List disadvantages of internal recruitment.
* Limited candidate pool
* Potential bad feelings among unsuccessful candidates
* Risk of inadequate performance in new roles
* Loss of fresh ideas
* Possible need for additional training
123
What is external recruitment?
Hiring candidates who do not currently work for the business.
## Footnote
Methods include advertising, job centres, and recruitment agencies.
124
List advantages of external recruitment.
* Wider range of candidates
* Fresh ideas and enthusiasm
* Immediate availability of right skills
125
List disadvantages of external recruitment.
* High advertising costs
* Uncertainty about candidate capabilities
* Potential for dishonesty in interviews
126
What is induction training?
Training for new employees on equipment, roles, and key information about the business.
## Footnote
This is essential for integrating new hires.
127
What is on-the-job training?
Training provided in the workplace by experienced employees.
## Footnote
It is cost-effective but may not introduce new ideas.
128
What is off-the-job training?
Training that involves attending courses or college, which can be expensive.
## Footnote
It may lead to employees leaving after training.
129
What are the advantages of training?
* Employees learn new skills
* Increased flexibility and knowledge
* Improved motivation and loyalty
130
What are the disadvantages of training?
* High costs, especially for off-the-job training
* Job duties may be neglected during training
* Potential loss of trained employees
131
What are formal training methods?
* Conferences
* Webinars
* Presentations
* Professional exams
* Online courses
* Workshops
* College qualifications
132
What are informal training methods?
* Discussions with colleagues
* Networking with other businesses
* Observing colleagues
* Reading articles
133
What is the purpose of target setting and performance reviews?
To monitor employee performance and identify areas for improvement.
## Footnote
It also helps in setting future training needs.
134
What are reasons to train and develop employees?
* Shows business values employees
* Keeps employees updated
* Identifies knowledge gaps
* Enhances job performance
135
What is employee retention rate?
The percentage of employees that remain in a business over a period of time.
## Footnote
A rate of 95% is considered very good.
136
What is the importance of retraining employees?
To keep staff updated with new technology and systems.
## Footnote
This ensures the business adapts effectively.
137
What is motivation?
Factors that influence people to behave in a certain way, either internally or externally.
## Footnote
It can include rewards or threats.
138
List benefits to a business of motivated staff.
* Hardworking employees
* Employee loyalty
* Supportive work environment
139
What are monetary benefits given to employees?
* Bonuses
* Pension contributions
* Profit sharing
140
What are non-monetary benefits that can be offered?
* Flexible hours
* Job enrichment
* Training opportunities
* Team working
