whys it only fun when its over Flashcards
(51 cards)
1
Q
Types of Business Growth?
A
- INTERNAL (by itself - bringing out new products / entering new markets) - can be high risk and take time, because needs to be informed by market research
- EXTERNAL (joining another business through mergers two businesses agree to join or takeovers one business buys another and incorporates it into their own - the other name no longer exists
2
Q
+ - of being a PLC
A
+ Raise finance through share capital / Limited Liability / Seen as prestigious and reliable
- Risk of hostile takeovers / Less privacy - Increased media attention
3
Q
Multinational business?
A
A business that expands into new countries.
+ Wider target market / Cheap labour abroad / Reputation as market leader
- Culture or Language barriers / Uncertainty based on exchange rates / Loss of focus
4
Q
Sources of finance for growth?
A
- INTERNAL - Retained Profit [no interest, but can be a limited amount, an decrease dividends for investors] / Selling Assets [immediate lump of money, but loses use of assets]
- EXTERNAL - Loan Capital [purpose can be secured by lender] / Share Capital [risks hostile takeover over 51%]
5
Q
Why might business aims and objectives change with growth?
A
- market conditions and degree of competition (could change to focus on survival)
- technology (could change to focus on product development)
- performance
- legislation (wage or act changes could affect aims of profit maximisation)
- internal reasons (a change in CEO could mean different ambitions or priorities)
6
Q
How might a business act on changing aims and objectives?
A
- change product portfolio
- change organisational structure
- enter and exit new markets
- cut costs or workforce
7
Q
Globalisation?
A
The process by which more and more businesses operate on an international scale
- IMPORTS (+ stocking a wide range of products, or cheaper raw materials than domestically - more competition for domestic goods)
- EXPORTS - wide target market, BUT remember SPICED
- BUSINESS LOCATIONS - physically entering wealthy markets, or manufacturing cheaply abroad
8
Q
Barriers for international trade?
A
- TARRIFFS (tax on IMPORTED goods making them more expensive, reducing demand) to protect domestic businesses
- TRADING BLOC shares workers, expertise and no taxes, BUT creates preferential treatment against countries outside trade bloc
9
Q
How do businesses compete internationally?
A
- internet for communication and promotion
- e-commerce as a global marketplace to trade 24/7
- changing market mix to adapt to culture, currencies, legislations, language, or development
10
Q
How do businesses act ethically?
A
- treat workers / suppliers / consumers fairly
- ethical sourcing of materials, and meeting government requirements
- care for the community
BUT THERE CAN BE TRADE-OFFS BETWEEN ETHICS AND PROFIT (pick ur struggle)
11
Q
Green Audit
A
A detailed review of a business’ impact on the environment, allowing them to set targets and measure performance.
Because being environmentally friendly - competitive advantage + avoid negative media attention - build brand loyalty
12
Q
Pressure Groups - Who and How?
A
People who join together to influence public opinion or gov/business policies.
Through boycotts/campaigns/protests/petitions/lobbying
Can cause changes in marketing mix to act more sustainable / socially acceptable
13
Q
Describe the design mix
A
- Aesthetics : importance is dependent on the product
- Function : can be used to improve competitiveness, or target specific customers
- Cost : must be financially viable
ALL ASPECTS MUST BE BALANCED
14
Q
Describe the product life cycle
A
- Introduction - research, development and launch. no profit is being made yet and promotion is KEY
- Growth - sales increase rapidly, so prices can be raised, and promotion decreased possibly but must be able to keep up with demand
- Maturity - growth has slowed down, but sales are high, possibly with repeat customers . can experience economies of scale and maximise profitability
- Decline - sales drop off. they must now discontinue or try an extension strategy.
EXTENSION STRATEGIES - lower prices, increase advertising, introducing varieties or total rebrand
15
Q
How might a business differentiate its products?
A
- unique functions, style, brand, quality or design
- customer service
16
Q
What are the two pricing strategies?
A
- High volume, low cost, low price - usually standardised products that sell in large quantities
- Low volume, high margin strategies - adding value to the product, and it being premium
DEPENDS ON PRODUCT SOLD
17
Q
Influences on pricing?
A
- Technology
- Competition
- Market Segment (niche/mass market)
- Product Life Cycle
18
Q
Promotion Strategies?
A
- Advertising (TV/Radio/Digital/Online/ Print/Outside)
- Sponsorship (Supporting an event/person/organisation)
- Product Trials - can be expensive, but effective and often used in INTRODUCTION
- Special Offers - entice customers into shop to buy OR clear stock
- Publicity and PR (good and bad)
- Branding (Personality and image of a product)
- Apps/emails / newsletters
19
Q
Retailing VS E-tailing
A
Retailing- selling products or services to customers in a physical shop ( + face to face support / trial / central to product or service - expensive overheads, such as rent or mortgage)
E-tailing - selling products or services through a website - both e-commerce and m-commerce (+ no costs of building / international market / easy to set up - no trial / verifying fake websites / digital marketing campaigns)
20
Q
How do business operations work?
A
- inputs : labour, capital, materials
- outputs : products or services
- make sure to manage : productivity, efficiency (+waste), flexibility (change to meet customer needs), quality
21
Q
What are the different production processes?
A
- JOB (one unit at a time) - low level of automation, low production, expensive products, high skilled workers. [ + flexible to requirements and good rs - unable to achieve economies of scale and more expensive and rare workers ]
- BATCH (both automation and manual flexibility) [ + some reduced costs, and still variety and choice - difficult to anticipate demand, and downtime decreases rate of production ]
- FLOW (a standardised product being produced on a large scale) [ + benefit of economies of scale, less expensive workers, high productivity - high cost of machinery, and doesn’t allow flexibility in variety ]
GOOD TO USE COMBINATION WHERE POSSIBLE
22
Q
How does technology affect productivity?
A
- reduces costs (through automation and 3D printers to make)
- improving productivity (by coordinating supply with demand, or monitoring stock using barcodes)
- improving quality (precision)
- improving flexibility (offering options for quantity and characteristics)
ALL MUST BE BALANCED THOUGH
23
Q
What might a supplier not being able to provide as they should lead to?
A
- being unable to complete orders
- limited or no choice/variety/products
- loss of customers
- a poor reputation
24
Q
What factors might a business consider and draw up when working with suppliers?
A
- reliability
- payment terms (trade credit?)
- price
- capacity (flexible if demand fluctuates or business expands)
- quality
25
Formula for profit
profit = total revenue - total costs
26
Formula for gross profit
Gross profit = sales revenue - cost of sales
27
Formula for net profit?
Net profit = gross profit - other operating expenses and interests
28
Formula for gross profit margin?
Gross profit margin = gross profit/sales revenue x 100
29
Formula for Net profit margin?
Net profit margin = net profit/sales revenue x 100
30
Formula for average rate of return on an investment?
Average rate of return = Average annual profit [total profit/number of years] / cost of investment x 100
(Good to see the potential worth of an investment but doesn’t account for the time value of money
31
What forms of data do businesses use to make and justify decisions?
- information from graphs and charts
- market data (characteristics of the market - demographics)
- marketing data (secondary research)
- financial data (a set of financial accounts containing the business’ revenue, costs and profits) used to carry out analysis ( - time delays, differences in interpretation, doesn’t speak on non-financial aims and objectives)
32
Hierarchical VS Flat Organisational Structure
HIERARCHICAL ORGANISATIONAL STRUCTURE
- Tall structure with lots and lots of layers of management
- each employee has a small span of control
- (+lots of opportunities to seek promotion - decision making can be slow as communication takes longer)
FLAT ORGANISATIONAL STRUCTURE
- Few layers of management and a wide span of control
- (+quick and efficient communication and decision-making - large workload for managers, and don’t offer employees opportunities for promotion)
33
Centralised VS Decentralised
CENTRALISED - all decisions made and approved by the highest levels of management (+ focused activities and vision, high levels of control)
DECENTRALISED - decisions made locally at lower levels (+senior managers focus on bigger picture, increased creativity and freedom, fewer mistakes - need decently trained workers though to make good, not contradictory decisions )
34
How can communication be an issue in a business?
- insufficient communication - unaware of decisions, leading to inefficiency or consequences
- excessive communication - overload or contradictions could slow output and have consequences
- barriers to communication- jargon/handwriting/language/timeliness etc
35
Different types of employment contracts?
- permanent contract : ongoing basis
- temporary contract : a fixed amount of time
- freelance contract : self-employed freelancer, paid just for a specific project that they do
36
Describe logistics
The organisation and transportation of goods. Affects:
- costs - good logistics can reduce costs and limit damaged stock
- reputation - good reputation for fast and efficient service
- customer satisfaction - high customer satisfaction ratings
37
How can stock be managed?
- bar gate stock graphs ( a graph showing how much stock a business should hold at any one time - minimum/maximum/re-order level/lead time)
- just-in-time stock control ( + reduces the need for a business to hold expensive stock, increasing efficiency and decreasing waste, also good for perishable stock - if it fails, unhappy customers, a loss of business and reputation damage)
38
How can the quality of a product or service be assured?
- quality control (testing for quality at the END - supervisor test, after-sales questionnaire, mystery shopper)
- quality assurance (taking steps at each stage of the process - selecting best suppliers/making quality EVERYONE in the production process’ responsibility)
Businesses can also be accredited by a quality mark - eg. Kitemark, CE Mark
39
What is the sales process?
1. Customer interest (marketing/product knowledge / sales approach [hard and soft])
2. Speed and efficiency of service (queues at till, website to place orders)
3. Customer engagement (the transaction and choice, level of service)
4. Post-Sales Service and Customer Feedback (helping with the product + questionnaires, suggestion boxes
5. Customer loyalty (repeat customer?)
40
+ of employers/employees working from home
+ reduced workspace requirements / lower sickness rates / happier staff less likely to leave the business
+ reduced time spent travelling / more flexible start and end times / less distracted with colleagues
41
common key job roles
- directors (sometimes owners) - running business
- senior managers - responsible for business strategies, aims, objectives
- supervisors/team leaders - management and training of employees
- operational/support staff
42
main documents involved in the recruitment process
- person specification (from business - essential + desirable requirements)
- job description (fb - title, department, terms of employment, responsibilities etc)
- application form
- curriculum vitae
43
types of recruitment
- INTERNAL - role is only advertised to existing employees ( + fast, easy, cheap, candidates are well known to business - limited choice of applicants, awkward for line managing, doesn't bring new ideas in)
- EXTERNAL - role is advertised to those inside AND outside business ( + new skills, new ideas, high number of potential - expensive *recruitment agency*, and could turn out worse than in interview)
44
methods of recruitment
- interview
- test
- application form (dead)
- role play
- presentation
- group discussion
45
methods of training
- FORMAL - webinars, conferences, professional exams, workshops, qualifications
- INFORMAL - talking, observing, reading articles
+ self-learning , ongoing training are great! these are tested with target setting and performance reviews, motivating them (and keep them RETAINED) especially if targets are linked to pay/benefits
46
why do businesses train/develop
- so employees do their jobs well
- shows employees that the business values them
- identify gaps in roles
- ensures employees are up to date
47
Formula for retention rate?
retention rate = number of employees continued to be employed in a specific time period / total number of employees x 100
48
benefits of having motivated employees?
- employee attendance is higher
- reputation of business improves, because employees are proud of it
- employee productivity and work output in the working day is higher, so less costs of paying for overtime
- retained so less cost of recruiting new employees
- more ideas
- better communication and efficiency
49
financial methods of motivating employees?
- renumeration (payment 🤑)
- bonuses
- commission (pay for the sales they make, but make sure they don't pressure customer for sales)
- promotion
- fringe benefits (extra benefits, transport, insurance, sometimes even shares)
50
non-financial methods of motivating employees?
- job rotation (+skills, network, understanding, fun)
- job enrichment - interestifying job, but not too much because overwhelm/costs and wages
- autonomy - job satisfaction
HAPPY MOTIVATED AND SATISFIED EMPLOYEES PRODUCE BETTER WORK SO CUSTOMERS GET BETTER PRODUCTS LEADING TO HIGHER SALES AND PROFITS
51
types of mergers
backward vertical - joining with a business at a previous stage (e.g a supplier)
conglomerate - businesses with no common business interest join
horizontal - businesses at the same stage join
forward vertical - business joins with one at a later stage (e.g a customer)
