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Business test 1 and 5 > Business > Flashcards

Business Flashcards

1
Q

Financial objectives

A

a goal that businesses set for financial success and growth

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2
Q

Main types of financial objectives

A

Survival, Profit, sales, market shares, Financial secuitry

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3
Q

survival

A
  • new business operating in 12 months or more
  • existing business remain solid through hard times
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4
Q

Sales

A
  • brand awareness
  • high market share
  • lower cost per unit
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5
Q

Profit

A
  • increase prices
  • increase market share
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6
Q

Financial security

A
  • Businesses with high market share can dominate the market and become well-known
  • maintain life/work balance
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7
Q

Non-financial objectives

A

goals for a business that are not related to making money

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8
Q

Main types of financial objectives

A

Social, Personal satisfaction, challenge, independence and control

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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
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10
Q

personal satisfaction

A
  • Achieving success by doing something enjoyable for the owner
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11
Q

Challenge

A

solving problems or enjoy seeing the results of hard work

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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
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13
Q

Changes in Business Objectives

A

Market conditions, Technology, Legislation

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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
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15
Q

Technology

A
  • ## New production technology could help the business achieve higher profits
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16
Q

Legislation

A
  • New laws may increase business costs
  • environmental regulations have pushed businesses to focus more on social responsibility.
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17
Q

Sole trader

A

when an entrepreneur starts their own business

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18
Q

Advantages

A
  • easy to start up
  • complete control over the business
  • more flexible with the hours
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19
Q

Disadvantage

A
  • Unlimited liability
  • limited access to finance
  • no business continuation (the business dies with the owner)
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20
Q

Partnership

A

A partnership involves two or more people joining together to own a business

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21
Q

Advantages

A
  • more decision making
  • More skills and knowledge
  • more access to finance
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22
Q

Disavantge

A
  • unlimited liability
  • profits shared between the two
  • one partner might be working harder than then the other
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23
Q

Private limited company

A

A business owned by one or more shareholders, where their liability for the company’s debts

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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
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25
Q

Disadvantage

A
  • More expensive and time-consuming to set up
    -Shareholders may have little control over the company
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26
Q

Public Limited Company

A
  • a business that sells shares to the public on the stock market, allowing the company to raise capital
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27
Q

Advantages

A
  • large amounts of capital can be raised
  • Company shares can be bought and sold easily
  • may be able to dominate the market
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28
Q

Disavantges

A
  • setting up can be expensive
  • prioritise short-term financial performance (
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29
Q

Franchises

A

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

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30
Q

Advantages

A
  • recognized brand name
  • Equipment and supplies are provided by the franchisor
  • Product training,
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31
Q

Disavantges

A
  • 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
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32
Q

Social Enterprise

A

a business that has the primary purpose of creating social or environmental impacts.

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33
Q

Objectives of Social Enterprises

A

Social, Environmental, ethical, financial

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34
Q

Environmental

A
  • Protect the natural world, animals, and their habitats
  • reduce the impacts of pollution
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35
Q

Socal

A
  • provide jobs/ support for gruops/ homeless
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36
Q

Ethical

A
  • Run the business responsibly by ensuring fair treatment of all stakeholders, including employees and suppliers.
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37
Q

Financial

A
  • Make a profit to invest back into the social enterprise to expand the social work
37
Q

Advantages

A
  • Social enterprises often have a good reputation which can attract highly-qualified employees and encourage customer loyalty
  • receive financial support
38
Q

Disavantges

A
  • The media may closely watch social enterprises, so they must always act responsibly.
  • Decision-making is often slow
39
Q

Multinationall company (MNC)

A

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
Q

Primary Sector

A
  • focuses on extracting raw materials from the land, sea, or air.
    Example: Farming, fishing, mining
41
Q

Secondary sector

A

part of the economy that involves the manufacturing, processing, and construction
Examples: hotels, restaurants, banking

42
Q

The Tertiary Sector

A

the part of the economy that provides services to consumers

43
Q

Factors Affecting the Choice of Business Location

A

Proximity to market, Proximity to labor, proximity to material, proximity to competitors

44
Q

Proximity to market

A
  • distance between the business location and the target market
  • consumer goods can reduce cost of transportation by locating close to customers
45
Q

Proximity to labour

A
  • important to locate where skilled workers are to run business efficently
46
Q

Proximity to materials

A
  • availability of raw materials and supplies for business
  • locating close to resources reduce costs of production and trasportation
47
Q

Proximity to competitors

A
  • make the business unique by offering different products/ services
48
Q

E-commerce

A

Buying and selling goods and services online

49
Q

Factors of E-commerce

A

Lower business costs, Cost and availability of labour, Proximity to transport infrastructure, Reliable IT infrastructure and power

50
Q

Lower business costs

A
  • Business costs can be lower because smaller spaces in less prominent areas tend to be more affordable to rent or buy.
51
Q

Cost and availability of labour

A

Businesses with remote workers might only need a small office space, as employees require online access.

52
Q

Proximity to transport infrastructure,

A

-Products ordered online must be delivered to customers efficiently. Therefore, being located near highways, rail networks is essential

53
Q

Reliable IT infrastructure and power

A

-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
Q

Trading blocs

A

an agreement between multiple countries to reduce or eliminate trade barriers between them.​

55
Q

Globalization

A

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
Q

export

A

goods/services sold by domestic business to people or business in other countries

57
Q

import

A

goods/services bought by people and businesses in one country from another country

58
Q

reasons for globailsion

A

development in technology, improved transport networks, removal of trade barriers. Government Commitment, Market Saturation

59
Q

development in technology

A
  • faster communication, data, and sales around the world
60
Q

improved transport networks

A
  • easier for people to travel for business and products distributed
61
Q

removal of trade barriers

A
  • make trades for easier
62
Q

government Commitmen

A

boost trade making it easier for people, products, or money to move across boarders

63
Q

Market Saturation

A
  • targetting new markets overseas
64
Q

Benefit of globaolisation

A

large markets, economies of scale, labor, taxation

65
Q

Large markets

A
  • global markets have more customers
  • higher sales increase revenue and business profit
66
Q

economies of scale

A
  • Higher output as a result of increased sales can reduce business costs
  • can increase profits and improve business competitiveness
67
Q

labour

A
  • access to cheaper labour and materials globally
  • high quality labour
68
Q

taxation

A
  • head business operations set up areas with low tax, it saves costs
69
Q

economies of scale

A

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
Q

diseconomies of scale

A

when a company or business grows so large that the costs per unit increase

  • lack of commitment from workers
  • poor communication/ cordination
71
Q

job production

A

is where products are made to meet the specific requirements of individual customers
- Each item is produced separately
-

72
Q

advantage

A
  • 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
Q

disavantage

A
  • 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
Q

Batch production

A

group of identical products are produced simultaneously, rather than one at a time

75
Q

advantages

A
  • 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
Q

disadvantages

A
  • 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
Q

flow production

A

a business process that involves making identical products in large quantities on a continuous production line

78
Q

advantages

A
  • 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
Q

disadvantage

A
  • 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
Q

calculating prodctivity

A

Total output/ number of workers

81
Q

ways to increase productivity

A

Employee motivation, kills, education & staff, Investment in capital equipment

82
Q

Lean production

A

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
Q

just-in-time (JIT) Stock Management

A

a process in which raw materials are not stored onsite but ordered as required and delivered by suppliers ‘just in time’ for production

84
Q

advantage

A
  • Close working relationships are built with a select group of trusted suppliers
  • unused storage space is available for productive use
85
Q

disadvantge

A
  • The ability to handle sudden spikes in demand is limited.
  • organizational costs associated with frequent ordering are higher
86
Q

Kaizen

A

a Japanese business philosophy that encourages continuous improvement throughout an organization

  • All workers must be actively involved in making improvements, not just management
87
Q

total Quality Management (TQM)

A

a whole business approach to ensuring quality, to eliminate problems before they occur to imporve customer satisfaction

88
Q

Advantage

A
  • 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
Q

Disavantage

A
  • 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.

Business test 1 and 5 (3 decks)

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