ASW Flashcards
what is adding value
the process of making the product more valuable to the purchaser
methods of adding value
convenience, branding, quality, design, usp
what aims could a business have?
survive, break even, be more sustainable, make a profit
what is a mission of a business?
it’s overall purpose or main corporate aims or what they want to achieve
what are corporate objectives?
they are set to enable a business to achieve its missions/aims
what are functional (departmental) objectives?
they are a set of objectives for each department
What must all objectives be?
all objectives must be SMART
what does SPECIFIC (S) mean?
objectives are aimed at what the business does
what does MEASURABLE (M) mean?
the business can put a value to the objective
what does ACHIEVABLE (A) mean?
it must be able to be done by all those concerned in trying to reach the objective
what does REALISTIC (R) mean?
it should be able to be achieved with the resources available
what does TIME (T) mean?
progress can be checked and you can see if the objectives have been achieved or not
what is the formula for profit
total revenue - total costs
what is the formula for revenue?
selling price per unit x quantity of units sold
what is the public sector?
business that are owned and run by the government - aim to provide for the public rather than to make a profit (eg nhs and schools/universities)
what is the private sector?
owned by private individuals, usually have the main aim of making profit
what is limited liability?
you can only lose the money that you have put into the business and your personal assets cannot be taken.
what is unlimited liability?
the owner of the business is legally able to lose their personal assets
what is a sole trader?
a company which is run by one individual. they are the most common form of business and they are personally responsible for all business debts.
what are the advantages of a sole trader?
quick and easy to set up, simple to run, easy to close/shut down, owner is entitled to all profits and can choose when they work
what are the disadvantages of a sole trader?
unlimited liability, harder to raise finance, business suffers from owner’s absence, limited expertise, potentially long hours
what is a partnership?
started and owned by more than one person
what are the advantages of a partnership?
fairly simple to set up, expertise and efforts of more than one person, can provide specialist skills, greater potential to raise finance.
what are the disadvantages of a partnership
unlimited liability, complicated to sell or shut down, poor decisions by one partner can damage the interests or ideas of another
what is a private limited company? LTD
usually family businesses who cans sell shares to their friends/family
what are the advantages of LTD?
limited liability, allows you to get finance easier, viewed as more prestige (improving public image)
what are the disadvantages of an LTD
difficult to set up, difficulty to close down, all shareholders have to agree on decisions, not on the stock exchange, harder to make decisions.
what are public limited companies? (PLC)
can sell shares to the public, usually started off as private and switched to public as they grew
what are the advantages of PLC?
limited liability, easier to raise finance, stable form of structure, can pay less tax.
what are the disadvantages of PLC?
greater admin costs, have to publicly disclose company information, must give away a % of your business
what is the stock exchange?
the stock exchange is where you buy and sell shares in a business
what are shares?
shares are part of a business that you own
what is ordinary share capital?
it is money that has been raised by selling shares
what are dividends?
dividends are a proportion of the profits earned by the company which are split and paid out to shareholders.
what is market capitalisation?
the total value of all of the ordinary shares issued by a company
what is the formula for market capitalisation?
number of shares issued x current share price
what are stocks?
stocks are a type of security that represents ownership in a corporation. stocks and shares are sold on the stock exchange
why might shareholders invest?
capital gain (buying shares low and selling high), may receive a dividend due to their investment, want to be involved in running a business, believe in the aims of the business.
what are the main roles of shareholders?
to provide funds, most shareholders are not involved in the running of a business.
what could influence share prices?
scandals, trends, supple/demand, competitors’ actions, the state of the economy, the value of the business, interest rates
what is rights issued?
when a company offers existing shareholders the chance to buy additional shares in the business for a lower price.
what is business environment?
all of the internal and external factors that affect how a business functions
what is market share?
what % of the market you ‘own’
what is PESTLE and what does it stand for?
it is a way of analysing the external business environment. POLITICAL, ECONOMICAL, SOCIAL, TECHNOLOGICAL, LEGAL, ENVIRONMENTAL.
what are the 6 external influences?
competition, market conditions, income, interest rates, demographics, environment and fair trade
what are ethics?
moral principles or standards that guide the behaviour of a person or business.
what makes a business ethical?
working conditions, rates of pay, quantity of work, importing of goods, diversity, reducing packaging, minimising impact on the environment.
what are the advantages of behaving ethically?
improve, business image, happier customers, good PR, usually better quality products.
what are the disadvantages of businesses behaving ethically?
costs may increase, ‘unethical’ things may not be deemed to be unethical to others.
what is marketing
the process of identifying, anticipating and satisfying customer needs profitably
what is needed from marketing objectives?
set out what the business wants to achieve from its marketing
need to be consistent with overall aims and objectives of the business
provide a focus for marketing management
what is market analysis
market analysis gives firms information about market size and growth
what is the formula for market growth (%)
new market size - old market size / old market size x 100
what is market share?
(definition)
market share is the percentage of sales in a market that is made by one firm, or by one brand
what is the formula for market share?
sales/total market size x 100
what is the formula for sales growth?
sales this year - sales last year / sales last year x 100
internal influences on marketing objectives
budget, workforce skills, operational targets, shareholders’ objectives, managers’ opinions
external influences on marketing objectives
interest rates, competitor’s actions, consumer tastes, environmental factors, social trends.
what is market size?
the number of sales in a market as a whole
what is sales growth?
the percentage increase in the size of the sales of a firm in terms of either value or volume
how can markets be classified?
geography, nature of the product, seasonality, development level, product destination.
what is market research?
the process of gathering information (data) about the market
why is market research done?
allows businesses to spot opportunities, helps with decision making, helps them identify if their plans are working.
what is quantitative data?
concerned with data (usually numbers) - fixed answers
based on larger samples
what is qualitative data?
based on opinions, attitudes, benefits and intentions. is commonly collected in focus groups and interviews
advantages of quantitative
can take less time to receive and fill out
easier for the participant and for comparisons
disadvantages of quantitative
don’t get any form of opinions
not specific enough
advantages of qualitative
find out what the customer wants / their opinions
more detailed
disadvantages of qualitative
more difficult for the participant
advantages of primary research
you are the only one that has that data
tailored towards your business
disadvantages of primary
it can be expensive or time consuming to gather
advantages of secondary research
not so time consuming
more efficient to gather
cheaper to gather
disadvantages of secondary research
can be outdated
may not be lined to your business
