25/5/22

Question 1

How do you work out market share (%) ?

Answer 1

total sales of a business / total sales in the market x100

Question 2

what are the pros and cons of primary market research

Answer 2

+ specific to the business
+ reliable and up to date
- time consuming
- expensive

Question 3

what are the pros and cons of secondary market research

Answer 3

+ easily accessible
+ cheaper
+faster
- not tailored specifically to the business
- Not always up to date
- competitors can also access this research

Question 4

What are the 5 factors affecting supply?

Answer 4

Changes in cost of production
indirect taxes
government subsidies
new technology
external shocks

Question 5

What is a two stage channel of distribution?

Answer 5

This is called direct selling. This is where the product goes from the manufacturer straight to the consumer. An example is a hairdresser

Question 6

What is a three stage channel of distribution?

Answer 6

This is called indirect selling. This is where the good or service goes from the manufacturer to a retailer and then to the customer. An example is usually clothes.

Question 7

What is a four stage channel of distribution?

Answer 7

This is called indirect selling. It is where the product goes from the manufacturer to wholesaler and then to a retailer and finally to the customer. An example of goods that usually use this type of distribution is groceries.

Question 8

What is multi channel distribution?

Answer 8

It is when a business sells through more than one method of distribution for example apple Ipads can be bought in an apple store or on their website as well as a retailer such as currys PC world

Question 9

What are some advantages of online distribution for businesses?

Answer 9

• can take sales 24/7
• Goods are offered to a much wider market
• Lower start up costs making it easier for small businesses to launch
• Don’t have to meet the costs of operating retail stores

Question 10

What are some advantages of online distribution for consumers?

Answer 10

• customers can shop 24/7
• lower prices as e-tailers pass on lower costs
• easier to compare brands
• usually a wider choice available
• can see reviews of the product before purchasing

Question 11

What are some reasons for an entrepreneur setting up a business?

Answer 11

Profit maximisation
Profit satisfying
Ethical reasons
Flexible working hours
Be their own boss

Question 12

What are some Entrepreneurial characteristics?

Answer 12

Risk taker
Resilient
Decision maker
Creative

Question 13

What are some key facts about sole traders?

Answer 13

• Owned by one person
• Unincorporated
• Unlimited liability

Question 14

What are some key facts about a partnership?

Answer 14

• Owned by 2 or more people
• Unincorporated
• Unlimited liability

Question 15

What are some key facts about a private limited company?

Answer 15

• Incorporated
• limited liability
• Must publish financial accounts
• Shares can be sold but only to who the owners want to invite to purchase a share

Question 16

What are some key facts about a public limited company?

Answer 16

• Incorporated
• limited liability
• Must publish financial accounts
• Shares are sold on the stock market

Question 17

How can tariffs and quotas effect imports?

Answer 17

Tariffs and quotas allow governments to protect domestic firms as the prices of imports are higher and therefore consumers are more likely to buy domestic goods to save money.

Question 18

What are the benefits of operating in a trading bloc?

Answer 18

• access to member states
• easier to source labour if free movement of labour is permitted
• reduced or no trade barriers can lead to a fall in costs
• economies of scale

Question 19

What are the constraints of operating in a trading bloc?

Answer 19

• can be more expensive to import from outside the trading bloc
• Business might need to adjust some of its operations in order to comply with the rules in the trading bloc
• smaller firms can suffer from competition from larger firms elsewhere in the trading bloc

Question 20

What are the 3 main factors of global competitiveness?

Answer 20

• Developing product differentiation (branding and quality)
• Developing cost competitiveness
• Taking advantage of economic factors

Question 21

What positive impact do MNCs have?

Answer 21

Create jobs- typically pay more than domestic firms

give more choice to the country

FDI into other countries

Transfer of skills and technology

Incentive for domestic firms to be more competitive

Question 22

What negative impact do MNCs have?

Answer 22

• Make it difficult for domestic firms to compete
• Can erode domestic culture
• May find ways of avoiding taxes on profits
• Can harm the environment
  May take advantage of lower standards due to legislation (wages and working conditions)