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Business > 2.1 Growing the business > Flashcards

2.1 Growing the business Flashcards

1
Q

What is internal/ organic expansion?

A

Business growth by expanding its sales or their operations and is financed through its own profits

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2
Q

What is external/ inorganic growth?

A

business joins or buys other businesses, not necessarily of the same type.

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3
Q

Examples of internal growth

A

Opening new stores, launching new products, increase production capacity

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4
Q

Advantages of external expansion

A

Spread risk, rapid expansion, reduce competition.

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5
Q

Disadvantages of mergers and takeovers?

A

Demotivated employees, tension and lost jobs, complicated

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6
Q

Internal sources of finance?

A

Selling assets, retained profits, personal savings

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7
Q

Aims of induction training?

A

Familiarization, get to know colleagues, learn about products and job duties, health and safety

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8
Q

Benefits of induction traning?

A

Settle in quickly, less mistakes, improves retention, increases engagement, boosts morale, consistence, less supervision needed, promotion

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9
Q

What is informal traning?

A

On the job traning done in the workplace - shadowing, projects, mentors

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10
Q

What is formal traning?

A

Off the job traning that is doe outside of the workplace in return for qualifications or a certificate - online, classroom, apprenticeships, conferences

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11
Q

Advantages of informal training?

A

Can ask questions, inexpensive, workers feel appreciated, learn from mistakes, see them in real environment.

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12
Q

Disadvantages of informal training?

A

Risky, mentor could do the job quicker, scared of mentor, dangerous, ineffective

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13
Q

Advantages of formal training?

A

Feel more prepared for the job, reeive qualifications

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14
Q

Disadvantages of formal training?

A

expensive, they could be doing the job in real life, cant see them in real environment

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15
Q

Benefits of traning?

A

Increase motivation, challenge high performers and target low performers, aids retention

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16
Q

Benefits of on-going traning?

A

New technology, new health and safety, supports staff, refresh workers, improve skills

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17
Q

What is an appraisal?

A

A performance review

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18
Q

Benefits of new outlets?

A

prevents competition, more customers, larger market, more branding

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19
Q

Benefits of new products?

A

Raise awareness, fill market gap

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20
Q

Benefits of international?

A

larger market, less risk, more customers

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21
Q

If a businesses merge is backwards vertical what did they merge with?

A

The supplier

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22
Q

If a businesses merge is forwards vertical what did they merge with?

A

The distributor

23
Q

If a businesses merge is horizontal what did they merge with?

A

A business of the same type

24
Q

If a businesses merge is conglomerate what did they merge with?

A

A completely different business

25
Q

Negatives of mergers?

A

Diseconomies of scale, stakeholder reaction, infelxibility, loss of focus, company cultures

26
Q

What are economies of scale?

A

They occur when mass producing a good, resulting in lower average costs

27
Q

What is a gross profit?

A

Sales revenue - cost of goods sold

28
Q

What is gross profit margin?

A

(gross profit / sales revenue) x 100

29
Q

What is net profit?

A

Sales revenue - total business expenses

30
Q

What is net profit margin?

A

(net profit / sales revenue) x 100

31
Q

What is average rate of return?

A

average annual profit / cost of investment x 100

32
Q

What is a PLC?

A

A public limited company - a company that has floated its shares on the stock market so anyone can buy shares

33
Q

Positives of being a PLC?

A

Can raise large amounts of finance, limited liability, prestige, stable structure

34
Q

Negatives of being a PLC?

A

Risk of takeover, expensive, greater costs, public can see info, shareholder response, separation from ownership and control

35
Q

What is finance neede for?

A

To start up, run and expand the business.

36
Q

Top 4 sources of finance for growth?

A

Retained profit, loan capital, sale of shares, sale of assets

37
Q

Positives of retained profit?

A

Control, quick, no cost

38
Q

Negatives of retained profit?

A

Limited amount, cant be spent on other things

39
Q

Positives of loan capital?

A

Unimited, fixed interest

40
Q

Negatives of loan capital?

A

Interest, debt potential

41
Q

Positives of sale of shares?

A

Raise large amounts, bring people you knwo

42
Q

Negatives of sale of shares?

A

Loss of control, takeover

43
Q

Positives of sale of assets?

A

Lease if only needed sometimes

44
Q

Negatives of sales of assets?

A

Company value lowers

45
Q

3 different packaging company processes?

A

Job production, batch production, flow production

46
Q

Advantages of job production?

A

Worker satisfaction, USP, variety, adaptable, higher price, higher customer satisfaction

47
Q

Disadvantages of job production?

A

time consuming, quality varies, struggle to produce more, labor intensive

48
Q

Advantages of batch production?

A

Quality standardised, back up if struggling, easy to increase production, different batches

49
Q

Disadvantages of batch production?

A

lower price, not bespoke, overproduction

50
Q

Advantages of flow production?

A

Quick - specialisation, easier to train, capital intensive, quality standardised, easy to increase production

51
Q

Disadvantages of flow production?

A

Repetitive, slow start, reliance on previous workers, high investment.

52
Q

Benefits of introducing technology?

A

Consistent quality, less waste, increased producivity, higher customer satisfaction, cost effective, safer, flexible

53
Q

Mass customisation chain

A

personalised products, flexibility, reputation, higher prices

54
Q
A

Business (1 decks)

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