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Business A1 Flashcards

1
Q

what is a entrepreneur?

A

an individual who takes risks setting up a business

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2
Q

features of a entrepreneur?

A

confident risk taking hard working determined

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3
Q

what are factors that effect (constraints) on production?

A

legislation economy labour capital and enterprise and environment

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4
Q

constraints on a business?

A

competition environment legislation and the economy

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5
Q

what are the main functions on a business?

A

accounting&finance HR marketing and operations management

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6
Q

what are the business sectors? and explain it?

A

primary- the extraction of raw materials
secondary- putting together raw materials to make a product
tertiary- providing a service

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7
Q

what is added value ?

A

the business sells the product at a price higher than the cost

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8
Q

what are examples of private sector?

A

sole trader, partnership and limited company= PLC AND LTD

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9
Q

what are examples of public sector?

A

central government owned and local government owned

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10
Q

advantages and drawbacks of sole trader

A

-few legal requirements
-no need to consult with anyone
-keeps all profits
-financial state are kept private
DRAWBACKS:
-business is liable for all debts
-damaging mental health
-hard to find capital
-if sole trader dies companies dies

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11
Q

benefits and drawbacks of a partnership?

A

-easy to establish
-more capital
-data is kept private
-debts are shared
-brings in different skills
NEGATIVES:
-profits are shared
-partnerships are easily ended
-liable for any debts
-decisions take longer to make

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12
Q

what is the third sector ?

A

a non profit organisation

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13
Q

what is a franchises and Co operatives?

A

A business with a well know brand lets another person set up their business with the brand name

Cooperative is where a business is owned and run by members ie: employees and customers

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14
Q

benefits and drawbacks of a franchisER

A

-don’t need to spend a large amount to set up
-rapid expansion
-low investment
-great brand reach
NEGATIVES
-no control over product
-cost of supporting the franchise is a lot
- can cause conflict

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15
Q

benefits and drawbacks of a franchisEE?

A

-brand name has been tried and tested so greater success
-franchiser does more market research so profit is main focus
NEGATIVE:
-less control
-certain amount of profits go to franchiser
-business cant be sold without permission

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16
Q

benefits and drawbacks of cooperatives?

A

-employees are more motivated
-high quality of service
-establishing is straight forward
NEGATIVES:
-slow decision making
-weak management
-capital can be limited

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17
Q

how can you tell a business is large or small (business growth)

A

number of employees, turnover and profit levels, number of factories and shops etc.., capital employed

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18
Q

what are the factors affecting the size of growth?

A

capital= as the my not have the funds to expand
personal preference= the may not want to expand
nature of the product

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19
Q

how can external growth effect stakeholders?

A

LOCAL COMMUNITY they can have the creation of jobs
SUPPLIERS will get regular orders
EMPLOYEES they will have gain job security
GOVERNMENT they will have a growth in the economy

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20
Q

what the types of external growth and explain?

A

MERGERS/ ACQUISITIONS where two companies join together to form a large business
JOINT VENTURES formal arrangement where a business works together
STRATEGIC ALLIANCE a temporary alliance between businesses
TAKEOVER taking control of another company

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21
Q

what is internal/organic growth?

A

growing within the business
done by increasing sales

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22
Q

why do external growth?

A

to earn a high return in investment
to become stronger to compete with threats

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23
Q

what are stakeholders?

A

people or individuals that are interested in a business

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24
Q

what are examples of stakeholders ?

A

suppliers
local community
customers
government
suppliers
employees
owners

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25
what are the stakeholder objectives with examples?
suppliers=want regular orders and prompt payments local community= creations of jobs, community involvement customers= want high quality product or service , a low price and a safe product employees=creations of jobs, job safety and job security owners=a return on investment
26
what is a mission statement ?
is the idea of what a business exits for and its purpose
27
whats is strategic objectives and tactical objectives?
STRATEGIC =how a business plans to achieve in the LONG TERM TACTICAL= day to day short term objectives
28
what is SMART?
Specific Measurable Achievable Realistic Time bound
29
what are constraints on a business objectives?
-competition -the state at which the economy is at -law/ legislation -external stakeholders -changing of objectives -objective conflicts between stakeholders -communication problems
30
why would a firm have mission statements?
to give an idea what the business exists for and its purpose and goals Can remind the employees what the business stand for and therefor motivate them
31
why would a business set objectives?
it is set by a business in attempt to reach a particular goal
32
what is an internal audit ?and what is it used for ?
it is a test ti measure the departments within a business - it allows the business to see the strengths and weaknesses compared to competitors
33
what is a external audit and what is it used for?
looks at the opportunities open to the business and the threats which faces ie the threats in the external environment
34
what are examples of external factors that will effect the business?
competition law EU environment technology changes economy issues political ethics pressure groups
35
what is the porters five forces?
a system for analysing the level of competition in an industry
36
what are the porters five forces made up of?
-threat of new entry -threat of substitute products -degree of existing competitive rivalry -bargaining power of buyers -bargaining power of suppliers
37
what is a business plan ?
a formal written document that explains in detail how a business is going to achieve its objectives
38
what are the benefits of a business using a business plan?
-gives start up business a sense of direction -forces managers to consider constraints -encourages communication between departments
39
what are disadvantages of a business plan to a business?
-times consuming -takes up time to implement -may provide a false sense of security -spending too much time on it shifts managers focus from current situation
40
what is a contingency plan?
is where a business plan for what will happen in the future if things were to go wrong
41
why should a bakery have a contingency plan
helps reduce the impact of a incident minimises potential damage that may occur
42
drawbacks to a contingency plan?
needs practice/ drills if its not done correctly then chances of damages are high -if the plan is too complex employees wont be able to understand
43
what is the plan do review process?
a process which departments use to achieve a task
44
what are advantages of using a plan do review process ?
forces a strategic approach on setting objectives regular reviews on the department and individuals progress also encourages KAIZEN- continuous improvement
45
what are the disadvantages of using plan do review ?
if employees aren't involved then the wont be committed to the firms objectives
46
define risk and what are the types of risk ?
the chance or probability of an adverse occurrence personal risk management risk unquantifiable risk quantifiable
47
what is uncertainty
the inability to calculate the costs and benefits of a decision precisely
48
define what all the types of risks are
personal risk is the entrepreneur takes risks to their health and well being quantifiable risk is the likelihood of a predictable risk occurring unquantifiable risk is the risk of an event that is unexpected
49
what is forecasting?
using existing data to predict future trends
50
what are methods of forecasting?
quantitative (numerical) qualitative (based on experience and understanding methods)
51
how to predict a 3 month moving average? and cyclical variation?
calculate: 3 months = total sales in 3 months 3 month moving average= total sales in 3 moths÷ number of months (3) cyclical variation= sales-moving average
52
what are the benefits of forecasting?
shows trends in sales shows any changes estimates future sales and revenue
53
drawbacks of using forecasts?
its a prediction so it may not happen doesn't take into account the economy and inflation doesn't take into account the businesses objectives
54
what is the tools for decision making?
ansoff matrix
55
what does the ansoff matix contain?
contains : MARKET PENETRATION (TL) MARKET DEVELOPMENT (TR) PRODUCT DEVELOPMENT (BL) DIVERSIFICSTION (BR)
56
what do decision tress do for a business?
allows a business to make decisions carefully
57
what are benefits of using decision trees?
simple and easy to read quick and effective and quick to calculate uses qualitative
58
drawbacks of the decision trees?
highly depends on the accuracy of the predictions less useful in new situations ignores qualitative data
59
what is a market?
a situation where buyers and sellers in order to etablish a price
60
what is it meant by competition?
refers tp rivalry amoung businesses or organisations
61
what are the types of competition?
direct competiton that have similar products or services
62
what is indirect competition?
business that have different products and servces
63
how can a business could increase its market share?
by selling more products expanding customer base
64
what is monopoly and what is its features?
a single seller when there is one firm or seller in the market significant barries to prevent any firm to enter monopolistic has the power to set prices becauses its control over supply
65
what is oligopoly ? and what are the features of it?
a small number of larger firms that dominate the market firms are interdependent so any action can directly affect the others high barriers of entry but still able to entry compared to monoply where you cant
66
define monopolistic ? and what are the features of it?
a large amount of small firms, and no one has significant power in the market low barriers of entry some differentiation in products so firms has some control over pricing
67
explain why business may choose to exit or enter the market?
they may choose to enter the market as there is profit to be made or lack of stong competiton reasons why a business may want to EXIT is because profits are declining, consumer preferences may make the market less attractive
68
list the barries of entry?
high capital requirements economies of scale brand loyalty technology acess to distribution channels
69
barriers to exit
high fixed costs contactual obligation asset specificity regulatory and legal constraints reputational concerns
70
evaluate the impact of competition on a business
princing pressure= intense competition forces business to lower prices innovationand differentiation= strong competition dirves business to innovate product to increase customer satisfaction market share and growth= high competiton means its difficult to gain market share operations efficiency= allows business to optimise operations and minimise costs
71

A Level (4 decks)

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