Business studies TERM 1 Flashcards
(25 cards)
who is an entrepreneur?
Someone whor organizes and operates in a business/businesses taking financial risk to do so.
What are the characteristics of an entrepreneur?
positive attitude
determination
leadership qualities
innovative
self motivitatio
risk taking
reasons for business failure
poor human resources
poor management
poor location
increased competition
lack of finance
why do government support start-up businesses?
increased competition
increse employment
increased econoimc growth
help them survive
how do government support businesses
organize advice
provide low cost premises
give grants
give tax breaks
what is a business plan?
a business plan is a document that consists of the aims and objectives of a business
what are the contents of a business plan
location of business
product or services
finance
company description
market analysis
What are the reasons why firms wish to grow?
to increase future profit
to increase makert share
to be able to survive in an increasingly competitive market
what are the importance of business plan?
to undrstand the possibe risks
it provides a checklist
it helps to know about the aims and objectives of the business
what are the ways a business can expand?
internal growth and external growth
what is internal growth?
internal growth is when a business invests in existing products or by developing new ones
what is external growht?
this involves a greater sum of money and can take place through the use of merger or takeover.
what is a merger?
a merger is when two simarly sized companies come togtether to create another company usually with a different name.
what is a takeover?
A takeover is when one company purchases another and becomes the new owner
what are the three types of integrations?
vertical
horizontal
conglomerate
what is vertical integration?
when one firm merges or takes over another in the same industry at a different stage of production.
what is forward vertical integration?
forward vertical integration is when a business merges or takes over a business which takes it nearer to the customers
what is backward vertical integration?
this is when a business merges or takesover another firm in the same industry which takes the first business nearer the source of raw materials.
what are the advantages of backward vertical integration?
the merger gives an assured suply of important components
the supplier could be prevented from supplying other companies
cost of components and supplies for the manufacturer could be controlled
what are the advantages of forward vertical integration?
the profit made by the retailer is absorbed by the expanded business
the retailer could be prevented from selling competitors products
information about the conusmer needs and wants can be odtained directly
what is conglomerate integration?
This is the takeover or merge with another firm in a different in a completely different business.
what are the advantages of conglomerate integration
diversify risks
creates new markets
transfer of ideas
what are the disadvantages of conglomerate?
culture clash
inexperiance can lead to mismanagement
lose focus
who wants to measure the size of the business and why?
government-
