Business Flashcards
1
Q
Financial objectives
A
a goal that businesses set for financial success and growth
2
Q
Main types of financial objectives
A
Survival, Profit, sales, market shares, Financial secuitry
3
Q
survival
A
- new business operating in 12 months or more
- existing business remain solid through hard times
4
Q
Sales
A
- brand awareness
- high market share
- lower cost per unit
5
Q
Profit
A
- increase prices
- increase market share
6
Q
Financial security
A
- Businesses with high market share can dominate the market and become well-known
- maintain life/work balance
7
Q
Non-financial objectives
A
goals for a business that are not related to making money
8
Q
Main types of financial objectives
A
Social, Personal satisfaction, challenge, independence and control
9
Q
socal
A
- improving human well-being or the environment
- Providing a reliable, high-quality service to a particular community is the focus of many public sector
10
Q
personal satisfaction
A
- Achieving success by doing something enjoyable for the owner
11
Q
Challenge
A
solving problems or enjoy seeing the results of hard work
12
Q
Independence & control
A
- make their own decisions
- A business owner may want to control their own time and business direction without interference from others
13
Q
Changes in Business Objectives
A
Market conditions, Technology, Legislation
14
Q
Market conditions
A
- level of competition in a market and its rate of growth
- If market growth is slowing objectives may focus on growing the market share
15
Q
Technology
A
- ## New production technology could help the business achieve higher profits
16
Q
Legislation
A
- New laws may increase business costs
- environmental regulations have pushed businesses to focus more on social responsibility.
17
Q
Sole trader
A
when an entrepreneur starts their own business
18
Q
Advantages
A
- easy to start up
- complete control over the business
- more flexible with the hours
19
Q
Disadvantage
A
- Unlimited liability
- limited access to finance
- no business continuation (the business dies with the owner)
20
Q
Partnership
A
A partnership involves two or more people joining together to own a business
21
Q
Advantages
A
- more decision making
- More skills and knowledge
- more access to finance
22
Q
Disavantge
A
- unlimited liability
- profits shared between the two
- one partner might be working harder than then the other
23
Q
Private limited company
A
A business owned by one or more shareholders, where their liability for the company’s debts
24
Q
Advantage
A
- Shareholders benefit from limited liability for debts
- Access to greater finance from investors
-Business continuity as the business does not die with the owner
25
Disadvantage
- More expensive and time-consuming to set up
-Shareholders may have little control over the company
26
Public Limited Company
- a business that sells shares to the public on the stock market, allowing the company to raise capital
27
Advantages
- large amounts of capital can be raised
- Company shares can be bought and sold easily
- may be able to dominate the market
28
Disavantges
- setting up can be expensive
- prioritise short-term financial performance (
29
Franchises
a business arrangement where a franchisor sells the right to use their brand name.
- usually the owner of a private limited company
- alternative to starting a brand new business
30
Advantages
- recognized brand name
- Equipment and supplies are provided by the franchisor
- Product training,
31
Disavantges
- A fixed sum must be paid at the start of the franchise for the right to use the business name and resources
- The franchisor may sell materials or equipment to the franchisee at inflated prices
- Franchisees have little say about how the business is run
32
Social Enterprise
a business that has the primary purpose of creating social or environmental impacts.
33
Objectives of Social Enterprises
Social, Environmental, ethical, financial
34
Environmental
- Protect the natural world, animals, and their habitats
- reduce the impacts of pollution
35
Socal
- provide jobs/ support for gruops/ homeless
36
Ethical
- Run the business responsibly by ensuring fair treatment of all stakeholders, including employees and suppliers.
37
Financial
- Make a profit to invest back into the social enterprise to expand the social work
37
Advantages
- Social enterprises often have a good reputation which can attract highly-qualified employees and encourage customer loyalty
- receive financial support
38
Disavantges
-
The media may closely watch social enterprises, so they must always act responsibly.
- Decision-making is often slow
39
Multinationall company (MNC)
a company that operates in more than one country, producing goods or services, and has its headquarters in one country
- MNCs choose locations based on factors such as cost advantages and access to markets
40
Primary Sector
- focuses on extracting raw materials from the land, sea, or air.
Example: Farming, fishing, mining
41
Secondary sector
part of the economy that involves the manufacturing, processing, and construction
Examples: hotels, restaurants, banking
42
The Tertiary Sector
the part of the economy that provides services to consumers
43
Factors Affecting the Choice of Business Location
Proximity to market, Proximity to labor, proximity to material, proximity to competitors
44
Proximity to market
- distance between the business location and the target market
- consumer goods can reduce cost of transportation by locating close to customers
45
Proximity to labour
- important to locate where skilled workers are to run business efficently
46
Proximity to materials
- availability of raw materials and supplies for business
- locating close to resources reduce costs of production and trasportation
47
Proximity to competitors
- make the business unique by offering different products/ services
48
E-commerce
Buying and selling goods and services online
49
Factors of E-commerce
Lower business costs, Cost and availability of labour, Proximity to transport infrastructure, Reliable IT infrastructure and power
50
Lower business costs
- Business costs can be lower because smaller spaces in less prominent areas tend to be more affordable to rent or buy.
51
Cost and availability of labour
Businesses with remote workers might only need a small office space, as employees require online access.
52
Proximity to transport infrastructure,
-Products ordered online must be delivered to customers efficiently. Therefore, being located near highways, rail networks is essential
53
Reliable IT infrastructure and power
-Remote workers need reliable communication infrastructure, like high-speed broadband, at home. Businesses in areas with frequent power outages may have difficulty maintaining their online services.
54
Trading blocs
an agreement between multiple countries to reduce or eliminate trade barriers between them.
55
Globalization
is the process of countries becoming interconnected in business and economics, driven by the increasing freedom to move people, goods, services, technology, and finance across borders.
56
export
goods/services sold by domestic business to people or business in other countries
57
import
goods/services bought by people and businesses in one country from another country
58
reasons for globailsion
development in technology, improved transport networks, removal of trade barriers. Government Commitment, Market Saturation
59
development in technology
- faster communication, data, and sales around the world
60
improved transport networks
- easier for people to travel for business and products distributed
61
removal of trade barriers
- make trades for easier
62
government Commitmen
boost trade making it easier for people, products, or money to move across boarders
63
Market Saturation
- targetting new markets overseas
64
Benefit of globaolisation
large markets, economies of scale, labor, taxation
65
Large markets
- global markets have more customers
- higher sales increase revenue and business profit
66
economies of scale
- Higher output as a result of increased sales can reduce business costs
- can increase profits and improve business competitiveness
67
labour
- access to cheaper labour and materials globally
- high quality labour
68
taxation
- head business operations set up areas with low tax, it saves costs
69
economies of scale
the decrease in average costs that occurs when a company increases the number of units it produces
- happens when large firms purchase raw materials or components in larger quantities, allowing them to receive bulk discounts that reduce the average cost.
- occurs when large firms can hire specialized managers who are skilled and efficient in specific tasks, leading to increased efficiency and lower average costs.
70
diseconomies of scale
when a company or business grows so large that the costs per unit increase
- lack of commitment from workers
- poor communication/ cordination
71
job production
is where products are made to meet the specific requirements of individual customers
- Each item is produced separately
-
72
advantage
- Allows for high levels of customization for customer
- provides the flexibility to adapt to changes in customer demands
- greater attention to detail
- sold at a higher price
73
disavantage
- Tends to be more expensive than other production methods
- Customization often results in longer wait times, which may not work for customers needing quick delivery. Job production can be more complicated and harder to manage
74
Batch production
group of identical products are produced simultaneously, rather than one at a time
75
advantages
- Production can adapt to different groups of products to meet various customer needs
- Quality issues are identified and corrected within a specific batch, minimizing their impact on the entire production line and reducing waste
76
disadvantages
- Setting up equipment for each batch takes time, leading to downtime between batches
-This often results in excess stock, which needs storage and careful management
77
flow production
a business process that involves making identical products in large quantities on a continuous production line
78
advantages
- Flow production reduces setup and idle time, leading to greater efficiency. It avoids frequent starting and stopping of equipment
- uses fewer skilled workers, reduces labour costs
- ensures consistent quality since all output is identical. Faster production leads to shorter lead times, allowing businesses to respond quickly to market demands
79
disadvantage
- often involves a significant capital investment, as manufacturing equipment and automation technologies can be costly to install and maintain
- It depends on the reliability and efficiency of the machinery. If any part of the production line fails, it can disrupt the entire process
80
calculating prodctivity
Total output/ number of workers
81
ways to increase productivity
Employee motivation, kills, education & staff, Investment in capital equipment
82
Lean production
a systematic approach to manufacturing that aims to minimize waste and maximize efficiency
- less time
fewer materials
- less labour
- space for production is reduced
83
just-in-time (JIT) Stock Management
a process in which raw materials are not stored onsite but ordered as required and delivered by suppliers 'just in time' for production
84
advantage
- Close working relationships are built with a select group of trusted suppliers
- unused storage space is available for productive use
85
disadvantge
- The ability to handle sudden spikes in demand is limited.
- organizational costs associated with frequent ordering are higher
86
Kaizen
a Japanese business philosophy that encourages continuous improvement throughout an organization
- All workers must be actively involved in making improvements, not just management
87
total Quality Management (TQM)
a whole business approach to ensuring quality, to eliminate problems before they occur to imporve customer satisfaction
88
Advantage
- Quality in all areas of the business enhances efficiency, which should result in increased profit
- A positive culture of continuous improvement and high standards is present throughout the business.
89
Disavantage
- Recruitment needs to be well-managed to hire workers who are dedicated and willing to participate in ongoing training
- Managers who can set a good example must carefully monitor and control processes.
