business Flashcards
transformation process and added value
the process of inputs into outputs
added value is the amount added on to inputs
key inputs for transformation process
land , labour , capital , enterprise
transformation process chain
raw material -> manufactoring -> distribrution -> retailer -> consumer
industry sectors
raw material = primary sector - extract or develops natural resources such as timber
manufacturing = secondary sector - using primary sector materials to build
distribution and retailer = tertiary - provide the services needed to meet the needs
breakeven output
fixed costs / profit per unit
the margin of safety
is the difference between the breakeven out put and the actual output
types of management styles
autocratic/authoritarian = makes decisions without consulting staff
paternalistic = gives attention to the needs of their workers
democratic = involves staff in decision making
laissez-faire = lets staff make their own decisions
the tannenbaum-schmidt continuum
tell, sell, consult, joins
stakeholder mapping
x-axis = stakeholder interest monitor , keep informed y axis = stakeholder power keep satisified
qualitive data
research into the attitudes and opinions of consumers that influence their purchasing behaviour
quantitive data
the collection of information on consumers views
stratified sampling
dividing a population into smaller sub sections
quota sampling
deliberately chosen from sub sections
confidence level
an indication of how accurate the research findings are e.g 80%=80%confidence that the results are accurate
confidence interval
the possible range of outcomes for a given confidence
elasticity
measure of the responsiveness of demand to a change in variable
PED
measure of how responsive demand is to a change in price
elastic = infinty <— -1
inelastic = -1<–0
inferior good
is a product that has a low perceived value
YED
below -1 = elastic
between -1 and +1= inelastic
above 1 =elastic
type of product
YED
below 0 = inferior goods
between 0 and 1 = normal goods
above 1 = luxury goods
mass marketing ( two ways )
1 generic product for the whole market
or
1 product adapted to each segment
market mapping
identify the position of a product using any two features e.g price and quality
market mapping enables a business to see where competition is most concentrated
boston matrix
allows businesses to plot their products on a grid or matrix according to each products market share and market growth
the matrix has four categories
dogs - low market share and growth
question marks / problem child = low market share and high market growth
stars - high market share high market growth
cash cows = high market share low growth
matrix suggests four strategies
question marks = monitor this product to see if it has potential to become a star .
stars = invest in this product has potential for further growth
dogs = remove this product from market
cash cows = maintain this profitable products market share
price skimming
penetration
high initial price
low initial price
dynamic pricing
price changes quickly in response to the ability to supply or to changing levels of demand
loss leader
selling a product at a unprofitable price to encourage customers to buy additional products
psychological pricing
using mind games e.g 1.99 instead of 2
distributions channels
direct = producer to consumer
traditional = producer ->wholesaler->retailer->consumer
modern = producer -> retailer-> consumer
digital marketing
search engine optimisation
social media marketing
pay per click
email marketing
influencer marketing
operational objectives
- ethical and environmental considerations
- speed of response and flexibility
- reduced unit costs
- added value
- quality targets
capacity
the maximum output achievable using current resources
capacity utilisation
the proportion of maximum capacity that is currently being used = actual output / max output x 100
economies of scale
- bulk buying - buying in bulk for cheaper cost per unit
- technical - capital machinery
- specialisation - splitting workforce into specialised teams
- marketing - spreading marketing costs over a large output
- managerial - employing specialists to supervise
underutilisation
when capacity utilisation is low
overutilisation
operating above full capacity
lean production
practices thar reduce waste . JIT
time based management
approach that recognises the importance of time and seeks to reduce the level of wasted time
cell production
team working where production processes are split into cells or teams
