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Business 1 Flashcards

Business in the Real World, Influences on business, Production Processes

1
Q

1.1 What purpose do businesses serve?

A

To meet customer needs or customer demands

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2
Q

1.1 What are the sectors of business?

A

Primary, Secondary, Tertiary

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3
Q

1.1 What is a product?

A

A tangible, physical item that can be sold

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4
Q

1.1 What is a Service?

A

Labour to earn money

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5
Q

1.1 What is a consumer?

A

Someone who uses the Product/Service

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6
Q

1.1 What is a customer?

A

Someone who purchases the Goods/Service

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7
Q

1.1 What are Cons of starting a business?

A

Risk of failure, Financial loss, Lack of security

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8
Q

1.1 What are Pros of starting a business?

A

Financial Reward, Be their own boss, Dissatisfaction with current occupation, Pursue an interest

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9
Q

1.1 What are qualities of an Entrepreneur?

A

Hardworking, Organised, Innovative, Risk-taking

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10
Q

1.1 What are the factors of production?

A

Land, Labour, Capital, Enterprise

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11
Q

1.1 What is opportunity cost?

A

The cost of making a decision and loosing the possible reward

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12
Q

1.1 What are the types of business ownership?

A

Sole Traders, Partnership, Limited Companies

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13
Q

1.1 What are Sole Traders?

A

A sole trader is a single person who is the exclusive owner of a business

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14
Q

1.1 What are Pros to being a Sole Traders?

A

They are easiest to set up, get to be their own boss, get to keep profit, get to make business decisions.

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15
Q

1.1 What are Cons to being a Sole Trader?

A

No distinction between business and personal assets, can be difficult to raise money - (Unlimited Liability), sole responsibility, hard to retain employees

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16
Q

1.1 What is a Partnership?

A

Partnerships are businesses that are owned by 2 or more partners.

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17
Q

1.1 What are Pros of a Partnership?

A

More ideas and perspectives, easier to rase money, easier to retain employees

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18
Q

1.1 What are Cons of a Partnership?

A

Shared lower profits, No distinction between business and personal assets, can be difficult to raise money (Unlimited Liability), arguments and disputes, all partners are liable for each other

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19
Q

1.1 What are Limited Companies?

A

Limited companies are businesses that are owned by shareholders. (Private and Public)

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20
Q

1.1 What are features of a Limited Company

A

Limited Company’s are incorporated (Separate from personal identities), Limited Liability, Owned by Shareholders

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21
Q

1.1 What is a Private Limited Company?

A

Private limited companies (Ltds) are companies where ownership of shares is restricted.

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22
Q

1.1 What are Pros to LTD’s?

A

Limited liability, ownership is restricted, easier to loan for LTD’s

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23
Q

1.1 What are Cons to LTD’s?

A

Finance needs to incorporate a business, legally obligated to publish accounts every year

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24
Q

1.1 What is a Public Limited Company?

A

Public limited companies sell shares on the stock exchange. This means that anybody over 18 can buy shares (often through brokers).

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25
Q

1.1 What are Pros of PLC’s?

A

Allows for profit from stock exchange, much easier to raise capital, Shareholders have limited liability

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26
Q

1.1 What are Cons of PLC’s?

A

Owners have little say on how business runs, anyone can buy enough stocks for a takeover, competitors can see how well company is doing

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27
Q

1.1 What is a Not-For-Profit Organisation?

A

Any profit made by not-for-profit organisations is reinvested (put back) in the business.

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28
Q

1.1 What are types of NFP Organisations?

A

Charity’s, Social enterprise (Big issue)

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29
Q

1.1 What Aims & Objectives could a Business have?

A

Survive, Profit maximisation (Looksmaxing), Growth, Increase market share,

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30
Q

1.1 What’s the importance of Business aims?

A

Helps measure growth, Can see areas of improvements.

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31
Q

1.1 What is the difference between an Aim and an Objective?

A

Objectives are more specific than Aims.

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32
Q

1.1 What does a business factor to create Objectives?

A

The Size of the business, The level of competition, Stage of life, Laws, Economy, Society and ethicality, Technology,

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33
Q

1.1 What’s a Stakeholder?

A

A stakeholder is any individual, group or organisation that is affected by a business and its operations.

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34
Q

1.1 What’s the difference between a Shareholder and a Stakeholder?

A

A Shareholder owns financial interest in the business, a Stakeholder has general interest in the business.

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35
Q

1.1 Who are examples of Stakeholders?

A

Customers, Local community’s, employers

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36
Q

1.1 What are the factors effecting business Location?

A

Supplier location, Labour, Competition, Rent, Location of the market

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37
Q

1.1 What is the calculation for Revenue?

A

Revenue = number of sales * sales price

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38
Q

1.1 What is the calculation for Total Cost?

A

Total Cost = Fixed Cost + Variable Cost

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39
Q

1.1 What is the calculation for Profit?

A

Profit = Total Revenue - Total Cost

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40
Q

1.1 What is the calculation for Average Unit Cost?

A

Average unit cost = total cost / output

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41
Q

1.1 What is the calculation for Interest

A

Interest = interest rate * size of the loan

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42
Q

1.1 Why do business’s make a plan?

A

Setting goals, Raising finance, Business organising

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43
Q

1.1 What are the main parts of a business?

A

Executive summary (Overview), Mission statement (Aim), Goods (Products & Services), Market analysis, Organisation and team management, Production details, Finance

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44
Q

1.1 What is economies of scale?

A

Economies of Scale describes businesses benefiting from a reduction in the average unit cost of their product or service because of increasing production (the number of units produced).

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45
Q

1.1 What is Diseconomies of scale?

A

Diseconomies of Scale describes businesses loosing from a increase in the average unit cost of their product or service because of decreasing production (the number of units produced).

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46
Q

1.1 What is internal expansion?

A

Internal expansion is when a business grows by expanding its own operations

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47
Q

1.1 What can a business do for internal expansion?

A

Launching new products, Increase production capacity, opening new stores

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48
Q

1.1 What is another term for internal expansion?

A

Organic growth

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49
Q

1.1 What is External Expansion?

A

External expansion is growth achieved by acquiring another business

50
Q

1.1 What are advantages of External expansion?

A

Rapid expansion, Reduced competition, Diversify industry.

51
Q

1.1 What are disadvantages of External expansion

A

Complicated, Demotivated employees, Tension and resignation/redundancies

52
Q

1.1 What is franchising?

A

Franchising is where a company gives someone the right to sell its products and use its trademarks.

53
Q

1.1 What are pros to Franchising?

A

Expansion with low costs, Increases brand awareness

54
Q

1.1 What are cons of Franchising?

A

Franchiser doesn’t have control, Can badly effect image

55
Q

1.2 What are the main influences on Business?

A

Technology, Ethics, Economy, Globalisation, Legislation and Competition

56
Q

1.2 What is E-Commerce?

A

Selling products via the internet?

57
Q

1.2 What are pros of E-Commerce?

A

Bigger markets, Sell easier

58
Q

1.2 What are cons of E-Commerce?

A

More competition

59
Q

1.2 What are examples of E-Commerce?

A

Social media, Websites, Apps, Conference Calls

60
Q

1.2 What are ethical considerations?

A

Labour in developing countries (China’s low pay), Product development, Employee welfare, Fairtrade

61
Q

1.2 What are pros to being Ethical?

A

Marketing, Employee motivation, Stakeholders enjoyment

62
Q

1.2 What are some environmental issues?

A

Traffic congestion, Waste disposal, Air and noise pollution, finite materials use, lack of public transport use

63
Q

1.2 What can business do to be sustainable?

A

Use renewable energy resources, contributing to climate change

64
Q

1.2 What economy factors effect business?

A

Economic cycles, Booms, Recession

65
Q

1.2 What effects the economy?

A

Unemployment, consumer spending

66
Q

1.2 What happens to demand during a recession?

A

Customers will spend on needs because of the lack of disposable income

67
Q

1.2 What happens to demand during a boom?

A

Customers can spend more on wants because they have disposable income

68
Q

1.2 What effects does interest rate have on a businesses sales?

A

The lower the interest rate, the less rate of return on saving resulting in increased sales (Same for inverse)

69
Q

1.2 What is globalisation?

A

Globalisation is the process where people, businesses, governments and markets around the world become more connected.

70
Q

1.2 What are pros of globalisation?

A

Single market share, Access to more customers, reduced costs

71
Q

1.2 What are cons of globalisation?

A

Increased competition, High UK wages, ethical issues, Fluctuating global economy

72
Q

1.2 What does acronym SPICED mean?

A

Strong Pound makes Imports Cheaper and Exports Dearer

73
Q

1.2 What does a Strong Pound mean?

A

Imports are cheaper and Exports are expensive

74
Q

1.2 What does a Weak pound mean?

A

Imports are expensive and Exports are cheaper

75
Q

1.2 What is the difference between National minimum wage and living wage?

A

Minimum wage is the lowest amount of money you can be played based of age and job. A living wage is an amount to keep employees happy.

76
Q

1.2 What’s the Equality Act (2010)?

A

Protects people from discrimination based of race, religion, sex, age, gender ect

77
Q

1.2 What is the Health and Safety at Work Act (1974)?

A

Places a responsibility to make sure businesses ensure safety of their staff.

78
Q

1.2 What does the Health and Safety law require?

A

Risk assessments and health and safety conditions to reduce workplace injuries.

79
Q

1.2 What is the impact of Health and Safety Law?

A

Costs, risks of fines and penalty’s if not up to date

80
Q

1.2 What does Customer Law do?

A

To protect customers against unfair treatment by businesses

81
Q

1.2 What does the Customer Laws prevent?

A

Misfit/Poor quality products, inaccurate trade descriptions

82
Q

1.2 What can ‘Market’ refer to?

A

Place to trade products, Industry, Specific group of customers

83
Q

1.2 What can businesses compete on?

A

Price, Location, Product range, Customer service

84
Q

1.2 What is the impact of High competition?

A

Selling price and profit, Quality

85
Q

1.2 What is Barriers to entry?

A

Things that stop another business from entering an industry

86
Q

1.2 What environment factors effects a business?

A

Technological advancements, The economy, Legislation, Environmental expectations

87
Q

1.2 How can a business reduce risk?

A

Business plan, Being market-driven, Research (On competitors and the economy), Technological changes

88
Q

1.3 What are the 2 types of production?

A

Job Production, Flow production

89
Q

1.3 What are features of Job Production?

A

Needs highly skilled labour, High quality/ Customised items, Specific niches

90
Q

1.3 What are features of Flow Production?

A

Assembly line, Capital intense, Mass market production and low production cost

91
Q

1.3 What are Lean Production methods?

A

Cell production, Kaizen

92
Q

1.3 What is Just in time Production?

A

Just in time (JIT) is a method for managing stock that aims to keep stock levels very low at all times.

93
Q

1.3 What does JIT stand for?

A

Just in time production

94
Q

1.3 What are pros to Just in time production?

A

Reduce storage space, Reduce waste

95
Q

1.3 What is cons to Just in time production?

A

Needs more frequent deliveries and may not meet demand otherwise

96
Q

1.3 What is Just in Case Production?

A

Just in case production involves a business will keep a ‘buffer stock’ of materials for production and finished goods

97
Q

1.3 What are Pros to Just in case production?

A

If there is a spike in demand or a problem in suppliers, the business could cope

98
Q

1.3 What is cons of Just in Case production

A

Stock control, Waste

99
Q

1.3 What does Kaizen mean?

A

Continuous improvement

100
Q

1.3 What is a supply chain?

A

A supply chain is the sequence of processes involved in converting raw materials into a final product and then distributing it to customers.

101
Q

1.3 What is a typical supply chain look like?

A

Raw Materials -> Manufacturer -> Distributor -> Retailer

102
Q

1.3 What is procurement?

A

Procurement is the process of finding and buying the materials and equipment that a firm needs to provide its product or service

103
Q

1.3 What does efficient procurement and Logistics do for a business?

A

Reduces supply chain break downs, Reduce waste

104
Q

1.3 What is a Raw material Supplier?

A

A company that extracts and sources Raw materials (Timber yard, Mines)

105
Q

1.3 What is a Manufacturer?

A

A factory that converts Raw materials into Processed Goods (Wool -> Clothing)

106
Q

1.3 What is a Distributor?

A

A company that Distributes Goods from the Manufacturer to the Retailer. (Bookers)

107
Q

1.3 What is a Retailer?

A

A company that sells Goods (Tesco)

108
Q

1.3 What are features of a Effective Supply Chain management?

A

Long-term relations, JIT production, Supplies at best price and quality, low waste

109
Q

1.3 What are factors to consider for choosing a supplier?

A

Cost, Quality, reliability, Ethical and environmental considerations (Fairtrade)

110
Q

1.3 What determines quality?

A

Materials, Production process, Style of production, Durability, Speed(Service)

111
Q

1.3 What is Pros to Good Quality?

A

Customer loyalty, Increased sales, Word of mouth

112
Q

1.3 What are Cons to Good Quality?

A

Expensive

113
Q

1.3 How can businesses measure quality?

A

Customer feedback, surveys

114
Q

1.3 How can a business identify quality?

A

Inspecting production process, customer service and complaints,

115
Q

1.3 What is Total Quality Management?

A

Total Quality Management (TQM) is a set of management principles that places quality at the heart of everything a business does

116
Q

1.3 What are pros of good Total Quality Management?

A

Reputation, Higher price, Avoid recalls

117
Q

1.3 What are the Costs of good Total Quality Management?

A

Inspection costs, training, provision of services

118
Q

1.3 What is The Sales Process?

A

The sales process is the chain of events (from purchase to later customer service) where a business sells to a customer.

119
Q

1.3 What are important aspects of The Sales Process?

A

Speed and efficiency of service, good customer engagement, product knowledge, post sales service

120
Q

1.3 What is Pros to good Customer Service?

A

Customer loyalty, Increased spending

121
Q

1.3 What are Cons of poor Customer Service?

A

Bad word of mouth, less customer loyalty

122
Q

1.3 How can customer service use technology?

A

Websites and e-commerce, Social media

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