1.1: Enterprise Flashcards
1.1.1: Enterprise 1.1.2: Entrepreneurs 1.1.3: Stakeholders 1.1.4: Business Plans 1.1.5: Markets 1.1.6: Market Size, Share and Growth 1.1.7: Market Segmentation 1.1.8: Competition 1.1.9: Market Research 1.1.10: Business Location
What is an SME
Small has <50 employees and a turnover less than 10 m whereas a medium sized has ,250 employees and has a turnover less than 50 million
What are the different sectors of the economy
Primary: Production
Secondary: Manufacturing
Tertiary: Service
What is an entrepreneur
Someone who starts and runs their own business and has responsibility for the risk involved
Explain two motivations of business owners
To gain a profit: Not the main focus but is the bigger picture for start ups
Be their own boss: Turning an idea into reality under your own control
State 4 skills or characteristics of an entrepreneur
Innovator, Risk Taker, Ability to identify and exploit new opportunities and Hard Working
State 4 sources of business ideas for entrepreneurs
Spotting a gap in the market, Copying ideas from another country, Scientific Approach and Looking at competitors
State 4 reasons why entrepreneurs are important for the country
Increased Employment, Economic Boost, Greater Government Tax Flow and Potential Overseas Exports
What are the two types of stakeholder
Internal: Part of the daily running of the business
External: Not part of the business but crucial for its survival
State two things each stakeholder would want from a business
Shareholders: Dividends and ROI
Managers: Job Security
Employees: Job Security and Appraisals
Suppliers: A customer and Reliability
Customers: Quality Goods and Reliable Service
What is a Business Plan
A detailed document that sets out how the business is going to operate and what it hopes to achieve
State the contents of a business plan
Business Description and Idea, SMART Targets, Marketing Plan, Production Plan, HR Plan and Financial Plan
List the benefits and drawbacks of producing a Business Plan
Monitor Performance, Ensure clear targets, Identify resources needed, financial support and its in one place
Time, Money, Opportunity Cost and Expertise
What are the two main forms of markets
Traditional: Physical
Non-Geographical: Online
What are 4 sub markets
Local, National, Global and Seasonal
State 3 reasons why a firm would sell overseas
Saturated Domestic Market, Regulations and Spread Risk
What is the difference between Consumer and Trade Markets
Consumer: Business Sells to a consumer
Trade: Business to Business
How is a niche market categorised
Premium Priced Products, Small Sales Volume and Highly differentiated Products
State 3 advantages and 3 disadvantages of Niche Markets
Fewer competitiors, Adaptable and Personal Service
Profit Limitations, Vulnerability and Large firms attraction to the business
How is a mass market categorised
Standardised Products, High Sales Volume, Availability, Low Prices and Extensive Promotion
State 2 advantages and 2 disadvantages of Mass Markets
Large Sales Revenues and Predictable Steady Revenue
High expenditure and Attracts competition
What is market size
Total sales of all producers in a marketplace calculated in volume which indicates potential sales of a firm
No of Industry Sales x Selling Price
What is Market Growth
The percentage change in size of a whole market over time
Change in Size / Original Size x 100
What is Market Share
The percentage of Sales that a single firm or product has in one market. Vol (Items sold) or Value (amount of sales pounds spent)
Sales of 1 brand/product
Total Market Sales x100
What is Market Segmentation
When a business breaks the market down into small groups with consumers that have similar needs/characteristics
Why use Segmentation
Allows from precise targeting at needs of consumers, Reduces wastage on marketing and firms can stress elements that appeal to their target market
How are markets segmented
Segment must be recognisable (differentiation), Critical Mass (must be financial worthwhile) and Targetable (specific marketing)
What are the 4 methods of segmentation
Demographic: Age, Social Class, Income
Psychographic: Personality, Lifestyle
Geographic: Rural, Urban, Global
Behavioural: Buying Habits, Brand Loyalty
State 2 advantages and 2 disadvantages of Market Segmentation
Increase Market Share and Extend products into new markets
Failure to meet customer needs and Difficulty in identifying the most important segments for a product
What are the key characteristics of a monopoly
Maximised profit, 100% Market Share, No Competition and Large Barriers to entry
What is the impact on business behaviour
Significant Profits, Protection and Reinvestment in new tech due to massive profits + lower prices for consumers
What are the key characteristics of a oligopoly
Few firms with price making power competing on anything other than price
What is the impact on business behaviour
Collusion may occur, aim is to maximise profit, high barriers to entry and exit
What are the key characteristics of Monopolistic Competition
Slightly differentiated products, limited price setting powers and very few barriers to entry and exit
What is the impact on business behaviour
maximise profits in the short run but will attracted entrants into the market they focus on differentiation
What are the key characteristics of perfect competition
Firms are price takers with no barriers to entry or exit selling homogenous products
What is the impact on business behaviour
No brands and they cant set their own price because if they set it too high demand will fall
State two barriers to entry
Brand Loyalty and Legal Restrictions
State 4 types of primary research
Surveys, Focus Groups, Product Trials and Observation
State 3 advantages and disadvantages of primary research
Tailored to the firms needs, up-to date information and Competitors cannot access the information
Expensive, Time Consuming and May be bias to a certain market area
What is random sampling
Literally pulling random people
What is Quota Sampling
Selecting people that are within your target group
How do you choose a sampling method
Time availability and Knowledge of the target population
State two internal sources of secondary research
Stock Analysis and Company records
State two external sources of secondary research
Government Stats and Trade Publications
State 3 advantages and disadvantages of secondary research
Cheap, Good Market Overview and Date can be checked over various sources
Out of date, some are expensive to buy and data could be biased
Explain Qualitative methods of collecting data
Opinion based data that can be unreliable but they regain validity in terms of the methods of data collection
Explain Quantitative methods of collecting data
Statistically reliable information which has been backed up by further enriched information
What are the influences on location
Competition, Cost, Infrastructure, Closeness to Customers, Labour Availability ,Government Influences and International Location Choices
