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business > 2.1-growing The Business > Flashcards

2.1-growing The Business Flashcards

1
Q

What are the two ways business growth can be achieved

A

-internal growth
-external growth

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2
Q

What is internal (organic)growth

A

When the business expands by itself,by bringing out new products or entering new markets

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3
Q

What is external(inorganic)growth

A

When a business expands joining with another business

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4
Q

What are examples of internal growth and how can it be done

A

INTRODUCING NEW PRODUCTS
-research and development
-innovation

ENTERING NEW MARKETS
-opening shop/factory in different county
-e-commerce

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5
Q

What are sone examples of external growth

A

-mergers
-takeover/acquisitions

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6
Q

What is a multinational

A

A business with operations in more than one country

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7
Q

What is the advantages of a multinational

A

-wider target market
-can spread risk between operations in different countries
-can take advantage of cheap labour

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8
Q

What is the disadvantages of a multinational

A

-cultural and language differences
-exchange rate fluctuations
-damage to reputation if found to be unethical

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9
Q

What is a stock market flotation

A

The process of changing a businesses ownership from private limited company to public limited company

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10
Q

What is a Private limited company(Ltd)

A

Shares can only be sold to friends,family and investors who are invited

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11
Q

What is a Public limited company(PLC)

A

Shares can be sold to the public through stock exchange

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12
Q

What is the advantage of being a PLC

A

-the business has the ability to raise additional finance through share capital
-the shareholders have limited liability-

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13
Q

What is the disadvantages of being a PLC

A

-Risk of hostile takeovers
-more complex accounting

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14
Q

What is the two main internal sources of finance

A

-retained profit
-selling assets

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15
Q

What are the two main external sources of finance

A

-loan capital
-share capital

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16
Q

What is the advantage and disadvantage to retained profit

A

-ADV no need to repay it

-DIS may not be enough for expansion

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17
Q

What is the advantage and disadvantage to selling assets

A

ADV - If they are no longer needed it is worth selling them

DIS- may not be any buyer or it may take a long time to sell

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18
Q

What is the advantages and disadvantages of loan capital

A

ADV- the business can access big amounts of money

DIS- has to be paid back with interest

19
Q

What are the advantages and disadvantages of a share capital

A

ADV- can raise big amounts

DIS- loss of control and shareholders get dividends

20
Q

How do business aims and objectives evolve

A

-at first a business is likely to focus on short term survival
-over time it will change to profit and growth

21
Q

How do business aims and objective evolve if competition increases

A

-if competition increases or economic conditions are poor a business may focus on survival by finding cheaper suppliers or reducing its workforce

22
Q

What is retrenchment

A

When a business downsizes by reducing the number of employees or closing less profitable branches

23
Q

What are internal reasons business change aims and objectives

A

-new leaders
-change in business culture
-previous performance in profit
-cash flow or market share

24
Q

What are external reasons businesses change aims and objectives

A

-competition,market conditions, technology, legislation

25
Q

What are targets for a growing business

A

Targets that focus on growth eg

-expand product range
-enter new market
-increase sales
-open new stores

26
Q

What are targets for a struggling business

A

Targets that focus on survival eg

-decrease product range
-exit markets
-achieve enough sales to break even
-reduce costs

27
Q

What is globalisation

A

A process by which more and more businesses operate on an international scale and gain a lot of power

28
Q

What ways does globalisation affect a business

A

-imports
-exports
-business location

29
Q

What are the benefits of globalisation

A

-increased markets
-access to cheaper labour and raw materials
-international specialisation
-increased levels of efficiency

30
Q

What are drawbacks of globalisation

A

-international competitors with cheaper costs
-power of multinational brands
-while industry closures
-effects of events in other countries

31
Q

What are trade barriers and free trade

A

Trade barriers-measure which restricts free trade

Free trade-no barriers to trade between countries

32
Q

How do businesses compete internationally

A

Using the internet - e-commerce

Changing the marketing mix

33
Q

What is business ethics

A

What is considered morally correct in business situations

34
Q

What do ethical behaviours in business include

A

-Treating workers fairly
-treating suppliers fairly
-treating consumers fairly

35
Q

What is the trade off between ethics and profit

A

Acting ethically can raise costs therefore reducing profit margins

However some businesses raise sales by using there ethical policies as a marketing tool

36
Q

What are the possible advantages of ethical behaviour

A

-add value
-sources of product differentiation
-gives USP
-improved reputation and consumer loyalty
-motivated workers

37
Q

What are the possible disadvantages of ethical behaviour

A

-higher costs therefore decreases profits
-consumers not willing to pay for higher priced products
-cannot compete on price

38
Q

What is a green audit and why do businesses carry it out

A

A green audit is a detailed review of a businesses impact on the environment

-large businesses usually carry it out to set environmental targets

39
Q

How does reducing a business’s impact on the environment effect the business

A

Costs may increase decreasing their profits

40
Q

How do business reduce environmental problems

A

-recycling
-renewable energy
-replenishing and conserving natural resources

41
Q

What opportunity does businesses becoming more environmentally aware create

A

Creates opportunities to meet customers needs and make them greener

42
Q

What is a pressure group

A

A pressure group is a group of people who join together with the aim of influencing the public opinion or governments or business for a particular case

43
Q

What methods do pressure groups use

A

-boycott
-protest
-social media campaign
-protests
-viral marketing
-lobbying (trying to imfluenve government)

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