Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > 3.1 - Business In The Real World > Flashcards

3.1 - Business In The Real World Flashcards

1
Q

What are the functions of a business?

A

Finance
Manufacturing
Marketing
Human Resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Meaning of USP

A

Unique selling point

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is an entrepreneur?

A

Somebody that takes a risk to start a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are some skills of an entrepreneur?

A 
Confidence 
Determined
Resilience 
Adaptability 
Creativity
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a business?

A

It is a organisation that exists to produce goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the importance of profit?

A

Main aim of most businesses

Considers how well the business is performing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a customer?

A

Someone who buys the product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a consumer?

A

Someone who uses the product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Reasons to start a business

A 
To make profit 
Help society - social enterprise 
Need a job 
Become successful 
Escape a boring job
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is a chain of production?

A

The stages that a product goes through to be ready to be sold to customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is deindustrialisation?

A

Where there is a decline in manufacturing in a country and an increase in tertiary businesses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is land?

A

It is a physical site on which a business is based

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is labour?

A

The skills available and number of workers employed by a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is capital?

A

Investment in equipment required to run a business such as factories and machinery

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is enterprise?

A

The skills of the people involved in business to identify business opportunities and bring resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is an opportunity cost?

A

It is the benefit lost of the next best alternative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is a sole trader?

A

A business that is owned and run by a single individual

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Positive of being a sole trader

A

No special paperwork
Don’t have to share the profits
Can cater for local people’s needs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Negatives of being a sole trader

A

Unlimited liability
Can be quite stressful to have to make all the decisions
Illness/holidays may affect the running of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is unlimited liability?

A

Owners are personally responsible for debts of the business, may have to sell own possessions to pay businesses they owe money to

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is limited liability?

A

The shareholders are only liable for the debts of the company up to the value of what they originally invested

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is a partnership?

A

Partners are joint owners of a business. Have to have between 2 and 20 partners.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Positives of being in a partnership

A

Profits are shared amongst partners
Flexibility over when you work
Teamwork

24
Q

Negatives of being in a partnership

A

Long hours
Some partners may dominate decisions
Conflicts may arise

25
Q

What are limited companies?

A

A company whose shares are traded publicly on the stock

26
Q

What is a private limited company?

A

A company whose shares are sold privately often to friends and family

27
Q

Benefits of LTD (private limited companies)

A
  • Less likely to be subject to a takeover bid. This is because the share price is not publicly known
  • Shareholders are more likely to agree, this is because you control who buys shares and they often have same investors as other owners
  • Attracts private investors known to the owners due to limited liability
  • Original owners often stay as directors and managers and run the business
28
Q

Drawbacks of LTD (private limited companies)

A
  • Expansion can be difficult
  • Cannot be listed on the stock exchange therefore can be hard to raise finance (share capital)
  • Can be taken over if the majority of shareholders agree to a bid from another company
29
Q

What are the benefits of a PLC (public limited company)

A
  • Limited liability
  • Selling to the public allows for larger sources of finance
  • Wider range of expertise
  • PLCs have a larger status than other businesses and often generate media attention due to their size
30
Q

Drawbacks of PLC (public limited company)

A
  • At risk of hostile takeovers due to the publics availability to buy share
  • PLCs must produce detailed information regarding its finances and performance to the public. This can give away information to competitors like USP
  • Shareholders are unknown to the business – increasingly likely for a clash of objectives
31
Q

What is an aim?

A

An overall goal or target a business hopes to reach

32
Q

What is an objective?

A

An objective is a specific, measurable target that outlines how a business will achieve that aim

33
Q

What is SMART?

A 
Specific 
Measurable 
Achievable 
Realistic 
Time
34
Q

Purpose of objective

A

Give business a clearly defined target
Can help motivate employees
Enables a business to measure progress towards goals

35
Q

What is a stakeholder?

A

An individual, group or organisation that effects or is affected by a business’ actions

36
Q

Common business stakeholders

A 
Customer 
Employees 
Local community 
Competition 
Owners
37
Q

What is a location?

A

Where a business is geographically situated

38
Q

What is an organic method of growth?

A

When a business increases in size from within the business, using its own resources e.g open more shops, offer franchises

39
Q

What is an inorganic method growth?

A

When a business increases in size by joining with or buying another business e.g merger, takeover

40
Q

What are fixed costs?

A

They are costs that do not change with the amount a business produces or sells (output)

41
Q

What are variables costs?

A

They are costs that change depending on what the business produces or sells (output)

42
Q

What is a franchise?

A

This is where a business sells the rights to another business to use their name, product or process

43
Q

What is a franchisor?

A

Individual who sells the rights to use the name

44
Q

What is a franchisee?

A

They decide to pay a franchise to use their name and sell their products

45
Q

What is a vertical growth?

A

When two businesses join the same industry but from different stages of production

46
Q

What is horizontal growth?

A

When two businesses join together from the same industry of production

47
Q

Benefits of organic growth

A
  • Easier to manage and control
  • Paid for profits (less costly)
  • Quick method of growth
  • Slow and steady (less risk)
48
Q

Disadvantages of organic growth

A
  • Market share could fall if others grow more quickly
  • No benefits from joining another business
  • Too slow for some (may take years)
49
Q

Disadvantages of inorganic growth

A
  • It could cause redundancies
  • It can be hard to intergrate the two businesses
  • Can be very expensive
50
Q

Benefits of inorganic growth

A
  • Can share specialist skills and cost advantages
  • Benefits from other business’ expertise
  • Increased revenue
  • Higher profit levels
  • Diversification
  • Reduced competition - removing key rivals
51
Q

Benefits of franchising for the franchisor

A
  • Growth is paid for by the franchise paying fees to existing business
  • Franchisor has fewer staff and fewer problems to manage
  • Franchise fee is good source of finance
  • Management problems of the outlet do not have to be dealt with by the original business
  • Quick growth rate for the franchisor
52
Q

Drawbacks of franchising for the franchisor

A
  • If one franchise attracts poor publicity the whole business could be damaged
  • A franchise may not keep their legal agreement, this could also damage the image of the brand
53
Q

Benefits of franchising for the franchisee

A
  • Franchises have a high incentive to expand their business quickly
  • Its a safe strategy for franchises, only 6-7% of new franchises fail
  • Most of the profit is kept by the franchisee
  • Ongoing support is provided by the franchisor
54
Q

Drawbacks of franchising for the franchisee

A
  • The franchisor could end the franchise without reason
55
Q

What is diseconomies of scale?

A

Occur when average unit costs rise as output increases

Business (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions