3.2.4 Reasons for staying small

Question 1

Customer service

Answer 1

the assistance and advice provided by a company to those people who buy or use its products or services.

Question 2

Offering a high standard of customer service is a way of what?

Answer 2

a way of adding value to products

Question 3

How does a quality customer service give a small business a competitive edge?

Answer 3

Customers attach value to dealing directly with owners and employees of business-can charge higher prices for this type of premium service

Question 4

It is more easier to provide customer service as a larger organisation T/F

Answer 4

False
- Difficult to get through an expertise in a larger organisation due to the lack of inflexibility and larger organisation.

This means customer service maybe poor

Question 5

Good customer service creates what?

Answer 5

Creates strong relationships between business and customer themselves

Question 6

Providing good customer service links to what?

Answer 6

Links to one of Kays distinctive capabilities argument( reputation)

Question 7

providing great customer service also benefits the business as you get a…
2 points

Answer 7

• good word in mouth publicity
• Good brand image

Question 8

E-Commerce

Answer 8

A business model that allows businesses to buy and sell goods/services over the internet

Question 9

E commerce now means that small businesses no longer…

Answer 9

No longer need to expand to be able to operate on a regional, national and international level

Question 10

Due to E-commerce products can be distributed globally from a small distribution centre without the need for

Answer 10

Without the need for investment in expensive retail space

Question 11

E commerce allows small businesses to reach what type of segments and where

This means they can get what?

Answer 11

niche segments both domestically and internationally

• wider customer base

- niche markets both domestically and overseas

Question 12

6 reasons why a business wants to stay small

Answer 12

Personal service:
- small business may find it easier to provide a personal service to customer

Flexibility:
- a small business can make decisions more quickly and adapt to the competitive environment

Control & efficiency : small firms may find it easier to operate efficiently and keep control of operations

Costs:
small firms may have lower running costs

Owners preference:
some owners may be happy with the current level of profits

Convenience as a USP

Question 13

5 common objectives for smaller business

Answer 13

1) Survival
2) Revenue maximisation
3) Profit maximisation
4) Cost efficiency
5) Customer service