1 Flashcards
define profit
difference between the level of income generated and the costs incurred by the business
define revenue (turnover)
income generated from the sale of goods and services in a market
work out profit
revenue-costs
work out revenue
selling price x quantity
define market
any situation where buyers and sellers are in contact in order to establish a price
define competition
rivalry amongst sellers
why have non-physical markets grown rapidly?
convenience
why do physical markets continue to exist?
personilisation that they offer
define market price
price range that the consumers are willing to pay
define competitive market
- large number of sellers
- competition mainly based on price
define monopoly
- market dominated by 1 seller
- low number of firms and prices are often high but not always
when do economies to scale arise
unit costs fall as output rises
define oligopoly
market dominated by a few large firms. example- mobile phones market.
products and prices are similar.
they force other firms out of the market
define monopolistic competition
- large number of firms and price isn’t applicable.
- compete on non price differences such as late opening times.
define market size
number of individuals in a market who are potential buyers of a product/service.
define market growth
refers to an increase in the demand for a business products.
define market dominance
measure of strength of a business and its product(s) relative to the competition
define barriers to entry
factors that could prevent a firm from entering and competing in a market
define barriers to exist
factors that could prevent a firm from leaving a market
5 barriers to entry
- large start up costs
- inability to gain economies of scale
- legal restrictions
- having marketing budget to break customer loyalty
- possibility that existing businesses will start price
define price
amount customers pay for a product
define cost
amount spent by a business making the product
strategies to increase market share
- have a clear marketing plan
- use a variety of marketing techniques, e.g pricing and promotion
- merge with a competitor
ways to obtain market dominance
- organic growth
- acquisitions
- mergers
- barriers to entry
- barriers to exist
define mergers
2 companies join together to form a new larger business
define acquisition
control of another company is achieved by buying a majority of its market share
organic growth is by increasing market share- 2 ways
- loyalty schemes
- advertising
define demand
amount of a good/service that customers are willing and able to buy at any given price
define supply
amount of a good/service that sellers are willing and able to sell at any given price
define equilibrium
situation in a market where demand is equal to supply
factors that determine demand
- price
- income
- wealth
- advertising, promotional offers and public relations
- taste and fashion
- demographic changes
factors that determine supply
- changes in the costs of production
- changes in technology
- government taxes and subsidies and regulations
- changes in climate in agricultural industries
- change in the prices of a substitute in production
- number of producers in the market and their objectives
define inelastic
change in demand that results from a price change is less than the change in price that caused it
define elastic
change in demand that results from a price change is greater than the change in price that caused it
define globalisation
process of growth in world markets through a process of integration where it is possible to trade in a global market in the same way as one would in a domestic market
factors that facilitated globalisation
- internet
- transport infrastructure
- rise of multi nationalists
define multi nationalists
company based in 1 country but manufactures and sells products in a variety of other countries
why are so many companies keen to be multi nationalists?
-economies of scale can be obtained
-ability to take advantage of a lack of legal constraints
-new markets with less competition
ability to take advantage of lower labour
define infrastructure
roadrail and airlinks that allow people and outputs to move fast around a country to help trade
characteristics of a tall structure
- many layers
- slower communication
- small span of control
- more promotional opportunities
characteristics of a short structure
- faster communication
- less motivation
- fewer promotional opportunities
- wider span of control
define by system
arranging the business according to what each department does
define by product
organizing according the different products made
advantages of matrix structure
- help break down traditional department barriers, improving communication across organisation
- allows individuals to use particular skills
- avoids the need for several departments to meet regularly
- likely to result in greater motivation amongst the team members
- encourages cross-fertilization of ideas across departments
disadvantages of matrix structure
- difficult to co-ordinate
- team members may neglect their functional responsibility
- its takes time to get used to working in this structure
define centralized structure
decision making is made at the top of hierarchy
benefits of centralization
- easier to co-ordinate and control from centre
- quicker decision making
- easier to implement common policies
drawbacks of centralization
- more bureaucratic
- customer service- lost flexibility and speed of decision making
benefits of decentralisation
- improved level of customer service
- enable flatter hierarchy
- facilitates empowerment
drawbacks of decentralisation
- harder to achieve tight financial control
- harder to ensure consistent practices and policies at each location
- decision making not necessarily “strategic”
stages of recruitment process before making an appointment
1 identify a vacancy 2 draw up job description 3 draw up person specification 4 advertise job 5 review applications 6 shortlist candidates 7 interview 8 appoint new employee
why might a new vacancy arise
- employee leaves/retires
- promotion
- business grows
- need for new skills
define job description
document that describes duties of a worker
define person specification
profile of the type of person needed for a job
define internal recruitment
when a vacancy is filled with someone within the organisation
define external recruitment
organisation fills a post with someone from outside the organisation
benefits of internal recruitment
- less need for induction training
- opportunity of promotion within a company may encourage good workers to stay rather than look for promotion elsewhere
- candidate already knows the ways of the workplace meaning it saves time
benefits of external recruitment
- likely to bring new ideas and enthusiasm to the job
- field of applicants will be bigger
- cause less resentment than choosing an internal candidate
examples of methods of recruitment
- local and national newspaper
- recruitment agencies
- job centres
- specialist magazines
benefits and drawbacks of local newspapers as a method of recruitment
- low costs B
- attracts locals- convenient and easy to travel to B
- limited audience number D
benefits and drawbacks of national newspapers as a method of recruitment
- attracts a wide range of people across the whole country B
- very expensive D
benefits and drawbacks of recruitment agencies as a method of recruitment
- specialise in your field B
- good knowledge of market place B
- impersonal D
- no influence over decisions D
benefits of an application form
- applicant can only provide info directly by employer
- easily compare
- questions can add personalisation
- more likely to get up to date info
drawbacks of an application form
- can lie
- restricted info
- might put people off applying as it is time consuming
benefits of a CV
- good way to show all qualifications
- more personal
- shows progression, i.e. progression
drawbacks of a CV
- harder to compare
- time consuming
- can lie
define psychometric testing
test to help identify a candidates skills, knowledge and personality
2 main types of psychometric testing
- personality
- aptitude
define personality tests
explores your interests, values and motivations, analysing how your character fits with the role and organisation
define aptitude tests
assesses your reasoning or cognitive ability, determining whether you’ve got the right skillset for a role
benefits of psychometric testing as a selection method
- narrows down the applicants that fits your businesses requirement
- see what personality is like
- see whether fits with your specific business values
define training
process of increasing the knowledge and skills of the workforce to enable them to perform their job effectively
benefits of training
- less direct supervision
- improves efficiency
- improves customer service
different types of training- induction training checklist
- health and safety regulations
- basic rules and regulations
- meeting line managers
