25/5/22 Flashcards
How do you work out market share (%) ?
total sales of a business / total sales in the market x100
what are the pros and cons of primary market research
+ specific to the business
+ reliable and up to date
- time consuming
- expensive
what are the pros and cons of secondary market research
+ easily accessible
+ cheaper
+faster
- not tailored specifically to the business
- Not always up to date
- competitors can also access this research
What are the 5 factors affecting supply?
Changes in cost of production indirect taxes government subsidies new technology external shocks
What is a two stage channel of distribution?
This is called direct selling. This is where the product goes from the manufacturer straight to the consumer. An example is a hairdresser
What is a three stage channel of distribution?
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.
What is a four stage channel of distribution?
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.
What is multi channel distribution?
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
What are some advantages of online distribution for businesses?
- 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
What are some advantages of online distribution for consumers?
- 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
What are some reasons for an entrepreneur setting up a business?
Profit maximisation Profit satisfying Ethical reasons Flexible working hours Be their own boss
What are some Entrepreneurial characteristics?
Risk taker
Resilient
Decision maker
Creative
What are some key facts about sole traders?
- Owned by one person
- Unincorporated
- Unlimited liability
What are some key facts about a partnership?
- Owned by 2 or more people
- Unincorporated
- Unlimited liability
What are some key facts about a private limited company?
- Incorporated
- limited liability
- Must publish financial accounts
- Shares can be sold but only to who the owners want to invite to purchase a share
What are some key facts about a public limited company?
- Incorporated
- limited liability
- Must publish financial accounts
- Shares are sold on the stock market
How can tariffs and quotas effect imports?
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.
What are the benefits of operating in a trading bloc?
- 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
What are the constraints of operating in a trading bloc?
- 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
What are the 3 main factors of global competitiveness?
- Developing product differentiation (branding and quality)
- Developing cost competitiveness
- Taking advantage of economic factors
What positive impact do MNCs have?
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
What negative impact do MNCs have?
- 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)
