Building A Business Flashcards
What is internal growth also known as?
Organic growth
What is external growth also known as?
Inorganic growth
What is internal growth or organic growth?
Internal growth occurs when a business expands by self by bringing out new products or entering new markets.
What are three methods of internal growth or organic growth?
- entering new markets
- innovating new products
- investing in the latest technology
What is external growth or inorganic growth?
When a business joins forces with another normally a faster way for a business to grow.
What are two methods of external growth or inorganic growth
- merger
- takeover
What are four external reasons why business objectives may change?
- competition
- legislation
- market conditions
- technology
What are three internal reasons why business objectives may change?
- performance
- leadership
- culture
What is retrenchment?
Retrenchment is when a business downsides of the scale of its operations e.g. decreasing the range of products it sells or closing some of its stores.
What are five trade barriers?
- tariffs
- non-tariff barriers
- trade blocks
- subsides
- quotas
What are tariffs?
Taxes on imports
What are nontariff barriers?
Imposing quality or safety standards.
What are trade blocks?
Promoting trade between a small group of countries (EU)
What are subsides?
Money given to help domestic producers?
What are quotas?
Physical limits on imports e.g. ocean.
What are four reasons for trade barriers?
- protecting jobs in domestic industries
- projecting emerging industries
- preventing the dumping of cheap goods on the domestic market and the entry of undesirable goods
- raising revenue from tariffs
What is e-commerce?
e-commerce is the activity of buying and selling products online services all over the Internet
What are the four stages of the product life-cycle?
- introduction
- growth
- maturity
- decline
How do you calculate gross profit?
Sales revenue - cost of sales
How do you calculate net profit?
Sales revenue - all costs
How do you calculate gross profit margin?
Gross profit
—————— X100
Sales revenue
How do you calculate net profit margin?
Net profit
—————— X100
Sales revenue
How do you calculate average rate of return?
Average annual profit
————————— X100
Cost of investment
What is remote working?
This is when employers can work from home while keeping in touch with colleagues through teleconferencing and email.
