기출문제 (2021~2024) Flashcards
Two problems that a new business might face
- lack of finance and working capital
- lack of expertise or management skills
- competition too hard
- lack of record keeping
- insufficient or poor-quality research
Strategy to improve net profit margin
- reducing direct cost
- reducing overhead costs
- increasing price
Features of public-private partnership (PPP)
- established by the government and one (or more) private sector businesses
- used for projects that benefit local communities and society
- social aims take precedence
- public funding for public projects is insufficient or unavailable
- once the project is complete, it is genereally maintained by the private contractor in the medium/long term
Branding
process of distinguishing one firm’s product from another (using features such as brand name, logo, design etc…) This establishes identity that distinguishes it from the competition
Target market
groups of potential customers with common needs or wants to whom a company wants to sell its products and services.
Process innovation
implementation of a new or significantly improved or modified production or delivery methods. This includes significant changes in production techniques, equipment and/or software
Enterpreneur
- A person who starts a business
- A person who has raised finance to start up the business
- A person that organizes the new business from hiring and buying inputs like raw materials and workers to producing/providing the finished goods/servies for sale
- A person that has to be a risk taker because the business could perform poorly or even fail
- It is an individual who demonstrates enterprise and initiative in order to make profit
Unique selling point/proposition (USP)
Aspect or feature of the product that may differentiate it from its rivals. It may help a business to gain a competitive advantage over competitors
Features of e-commerce
- e-commerce faces few geographic constraints
- available/accessible at any time
- global reach
- standardized platforms, easy to use
- multiple payment options
- personalization
Features of loan capital
- medium or long-term borrowed money
- it must be repaid
- the borrower must pay interest
- the borrower might be required to put up security to obtain a loan
- it is an external source of finance
Brand loyalty
when particular customres will always, or almost always, choose one brand over another. It is when consumers become committed to a firm’s brand and are willing to make repeat purchases over time.
Quota sampling
gathers data from a group or sub-group with a specified number of participants in each group or sub-group. Groups/sub-groups will have specific traits/characteristics
involves segmenting a given population into a number of groups that share certain characteristics such as age and gender
Profit centre
A section of business where both costs and revenues can be identified and are recorded
span of control
number of people a supervisor or line manager directly supervises
Fringe payments
additional benefits offered to employees above their normal salary
Pressure group
External stakeholders who try to influence the decisions made by an organization
Market share
The percentage of total sales that a business has within an industry. It can be calculated using the following formula:
Market share percentage= (Business sales/ total market sales) × 100
Two possible causes of cash-flow problem for a business
- lower sales, not enough cash in
- higher costs and expenses, too many liablities to pay back
- having too much stock
- allowing too much credit, poor credit control, high debtors days
- seasonal variation in demand
Two types of businesses, that operate in the tertiary sector
- banks
- insurance companies
- restaurants
- real estate
- personal services
Overdraft
when a business spends more money than it has available in its current account. A bank will allow such spending by offering an overdraft facility to the business, allowing the excess spending. An overdraft is a short-term external source of finance that incurs overdraft fees or interest
Economies of scale
reductions in average unit costs that arise from an increase in the scale of operations/ an increase in output
Advantage of operating as a for-profit social enterprise
- a favourable legal status is achieved
- strong communal identity
- stakeholder community benefits
- owners have limited liability
- more sustainable than a non-profit organization
Features of cooperative
- shared profits or losses of members
- shared decision-making between members
- limited liability of members
Advantage of having a mission statement
- calrify purpose
- communicate a message publicly
- focus energy and attention
- inform decision-making
- motivate employees
Fixed cost
is a cost that does not change with the level of production
Productivity rate
a measure of the efficiency of production and can be defined as the rate of output to input of production. It is also a measure of the added value of the business
Features of public limited company
- government rules, laws and regulations strcitly govern public limited companies
- shareholders do not participate in the day-to-day management of the business of a company
- sharedholders’ liability is limited to their investment in the company
- Legal continuity
- Raise capital by selling shares
Perormance related pay (PRP)
system of financial reward where the amount received by a worker is linked to how well they have reached targets and met criteria
PRP can be a motivator, but it is also difficult to implement, for example to measure and quantify performance
Methods of primary market research
- focus groups
- observation
- questionnaires
- interviews
Features of batch production
- identical products are produced in batches
- the method is suitable to produce a variety of goods
- groups of products are produced at one time
- one stage of operation is carried out on whole batch and then the whole groups is passed on to the next stage
- same type of machines arranged at one place
- the work involves some repetition
Brand awareness
marketing term that describes the degree of consumer recognition of a product or service by its name, logo or sound
Two features of private limited company
- incorporated, therefore a separate legal entity whose owners have limited liability
- shares are not sold in a public market
- legal continuity
- better access to finance than sole traders
Equity
measure of value that the owner have in the company or business. Calculated by:
- subtracting all debts from total assets or
- adding share capital and acculmulated retained earnings
Characteristics of niche market
Nich market: well-defined segment of a market with consumers in that market having specific characteristics
- segmented consumers within the larger market place (commmon demographic, purchasing behaviour)
- very small segment compared to the market as a whole
- products are generally more expensive than products for a mass market
Organizational culture
based on the beliefs, values and attitudes of the leadership and employees in a business. It can be classed as “the way we do things around here”
Characteristics of flow production
- continuous process of manufacturing products often using assembly lines
- standardized large quantity of products are being produced
- often very capital intensive with investment in machinery
- often able to utilize relatively low skilled labour
Redundancy
occurs when an employer determines that a job no longer needs to be performed
Describe one step in the development of a brand
- consideration of the business’ strategy
- identification of the target market
- doing market research
- selection of a name and logo
Product orientation
- a company will choose to ignore their customers’ needs and to focus only on efficiently building a quality product.
- do not undertake market research identifying customer reactions to their proposed product before commencing production.
- the company believes that if they can make the best product, their customers will come
Two features of product innovation
- the development of a new, redesigned goods or services (creative innovation)
- quality improvements made to a product
- the inclusion of components, materials or desirable functions into an existing product (adaptive innovation)
Social marketing
- use of commercial marketing tools and techniques (eg. market research) to influence individuals’ behaviour, to improve their well-being and/or that of society as a whole
- the aim is not to encourage purchase, but to raise awareness and lead to change (different to commercial marketing)
