Business Flashcards
1
Q
Sole Trader
A
- one person - may employ others
- one person raises capital andtakes all profits/losses
- most do not grow
- lack of training, knowledge
- Advantages = personal involvement of owner, faster decisions
- Set-up
- No legal stages to come to existance - need VAT/NI registration
2
Q
Partnership
A
- All partners have equal responsibility
- More skills/capital
- Detailed earnings submitted
- Problems occur thru lack of trust
- Set up - Usually have deed of partnership
3
Q
Registered company
A
- Annual audited accounts required by law
- Most have long life
- Limited liabilities
- Shareholders have legal control
- Set up - legal procedures must be followed - Companys Act 1980
4
Q
Business Plan
A
- Management - legal form of the company (ltd, plc etc)
- Product/service - description, USP, competition etc.
- Market Description - CUstomer profiles, competitors, marketing plan
- Operations - place of trading, systems, equipment
- Finance - cash flow, investment, budget
- Legal - Taxation, employment, insurance, H+S
5
Q
Risk management in engineering design
A
- Legal requirement for risk analysis and mitigation at design stage
- Risk Assessment - design, build and use
- Show application of engineering judgment
- Record risks + mitigations and pass onto user
6
Q
Business structures
A
- Functional organisational structure
- General manager
- Marketing, accounts, HR etc
- General manager
- Product organisational structure
- Aorcraft Wing Structures
- Tailing edge, fuel systems, covers etc
- Aorcraft Wing Structures
7
Q
PEST Analysis
A
Consider a range of factors that could affect the business and use for risk management/mitigation
- Political
- laws, restrictions, political stability, taxes, grants, employment
- Economic
- Cashflow, investment, unemployment
- Socio-cultural
- Demographics, lifestyle, consumerism, education levels
- Technological
- Research + development, product lifestyle, speed of technology change
8
Q
Role of marketing
A
- The basic role of marketing is to match the resources of anorganisation to the needs and wants of its environment. To dothis it must:
- Determine the internal factors which govern the total output of theorganisation (i.e. Assess ability to supply goods / services)
- Determine the external factors that influence the selection of goods /
services
9
Q
Consumer goods
A
- Convenience goods:
- Items bought everyday, which customers do not expect to shop aroundfor, e.g. milk and bread in any supermarkets
- Shopping goods:
- Items for which a customer will look at what is available in several retail outlets, e.g. Clothing and shoes
- Speciality goods:
- Items for which a customer will require speciality advice, and for which they are prepared to travel to purchase, e.g. ski and professional levelsports equipment
10
Q
Industrial goods
A
- Raw material:
- Basic raw material for further processing
- Capital equipment:
- Items that are purchased for long term use , e.g. Machine tools, vehicles andcomputers
- Components:
- Items that are used/assembled in other products with minimum work being done on them, e.g. Nuts and bolts
- Supplies:
- Items used by an organisation but not incorporated into their products, e.g. Electricity, paper, overalls
11
Q
Supply + Demand
- High prices
- Low prices
- Shortage
A
- High prices = high productivity = profit
- Low prices = no profit - little production
- Shortage = prices rise = extra profit = others produce too = prices fall
12
Q
Factors affecting supply
A
- Weather, natural disaster, civil disruptions – e.g. snow, industrialstrikes, flooding
- Technology – available technology, take up of technology bysuppliers and customers
- Taxation and subsidies – their impact on organisational decisionmaking
- Change in factors affecting production – such as governmentaldecisions
13
Q
Factors affecting demand
A
- Weather - annual cycles, changing sales depending on weather
- Prices of other products – this can cause changes in buying pattern, e.g.steep rise in petrol price can cause people to cut down on meals out, orswitch to public transport
- Fashion – normal fashion cycles, products which suddenly arise and fadeas quickly such as merchandise attached to movies
- Credit availability – loosening or tightening credit terms can impact decision on major purchases such as cars and houses
- Advertising and promotion – a successful campaign can have significanteffect on sales.
- Confidence about future – this will determine if people save or decide tospend as they earn (even spending on credit)
14
Q
Prodyct life cycle
A
- Conception
- Early growth
- Strong growth
- Maturity
- Decay
- Death
Continually redesigning prevents decay
15
Q
Risks with new products
A
- Sales may not be achieved
- Competitors’ actions e.g. Earlier launch of better product
- Lack of market response
- Unattractive pricing
- Design shortcomings
- Lack of technology experience
- Patent infringement
- User / manufacturing unfriendly design
- Manufacturing shortcomings
- Unreliable components
- Quality problems
- Late launch or insufficient demand
- Servicing shortages
- Untrained personnel
- Shortage of spare parts
21
Q
Return on investment/capital employed (ROI/ROE):
A
22
Q
Quick ratio and current ratio (Cash flow)
A
