Business April Mock Flashcards
What is a trustee?
Takes responsibility for managing money and assets that have been set aside in a trust for the benefit of someone else
Usually board of directors /charities
Taylor
Main focus on efficiency
Workers are motivated for money workers should be minimum amount of work if left alone
Small repetitive
peace rate pay
productivity meant fewer workers needed however reduction in quality
Maslow’s hierarchy of needs
- Self actualisation.
- Self esteem./Achievement.
- Social needs/friends.
- Safety/job security.
- Physical needs such as food water.
What is Herberg hygiene factors?
Good company policy which does not motivate workers but satisfies them
Herberg motivating factors
Interesting Work positively motivate workers into working better
Public sector
Organisations owned and run by the government to provide services to public gravity making a profit such as NHS and police force and its funded by the tax system
Private sector
Owned and run by the private individuals range from sale traders to huge organisations such as Asda John Lewis and they aim to make a profit
Charities are part of the sector such as nonprofit
Nonprofit
Charities that make money from donations and business activities money used to fund activities tax reductions due to nonprofit structure
Limited liability
Owners aren’t responsible for debts of business
Unlimited liability
Own are responsible for debts of business
Mutual organisations
Like building societies aim to offer best possible value for customers and product
Profits reinvested in order to reduce prices
Offers higher saving rates and lower loan rates and banks and don’t have to pay any profits to shareholders
Pros of sole trader
Freedom where own boss complete control of decisions
Profit takes all the profit
Savings on fees as as no legal cost
Cons of sole traders
Risky
Long working hours
Limited skills and expertise In area
Finances limited
Owner can get ill so no work will be done
Unlimited liability
Private limited companies
Cannot sell shares to public
Don’t have share prices quoted on stock exchange
Small family businesses often
No minimum share capital requirements
Difference between small and large private limited companies
In small, directors of the shareholders
Enlarge, directors are elected to the board by shareholders
Market capitalisation
Total value of ordinary shares issued
Market value = number of shares issued multiplied by current share price
Main roles of shareholders
To provide funds
Attend annual general meetings where she does have the right to vote
What do shareholders invest for?
Capital gains
Dividend pay
Involved to running firm
Want to see succeeded or to help survive and grow the firm
Factors influencing demand and supply shares
Performance of company
Speculation of new products launched
Current share price
Interest rates
Economy
What is break even?
Number of sales needed to cover its cost
Break even output formula
Fix cost divided by contribution per unit
Margin of safety
Amount between actual output and breakeven
Pros of break even
Easy to do and quick this set up
Helps persuade the bank to give them a loan
Influences decisions, whether new products or launch products or not
Helps forecast variations of sales
Cons of breakeven
Assume variable costs always rise steadily but businesses can get discounts
Simply for a single product
If data is wrong, results are wrong
Asume business sells more all the products
Only units to break even amount you will sell
Promotional mix
Depends on product, market, competitivity, product life cycle and budget available
Expensive and complex products more likely to be promoted by personal selling conveniency by advertising
Financial rewards
Increase revenue profit and reduce costs
Financial motivators
Increase pay
Training to increase product
Peace rate pay
Commission
Time rate pay
Fringe benefits
Performance relate pay in bonuses
Flexible working hours
Profitability
Measures total profit against resources used in making profit
How to work out margins
Profit over revenue
What do margin show?
How profitable a businesses can be used to make comparisons over period of time or compare with other competitors
Gross profit can be improved with higher prices and lower cost of sales
Operating can be improved via increased prices and lower costs
Prof of the year is a high margin is attractive to shareholders
 concentrated market
Good for small fans or limited resources where you only target get a couple segments
Differentiated marketing
Several segments being targeted
Undifferentiated market
Segments are ignored and goes for entire market
7 ps
Product
Place
Price
Promotion
Physical environment
People
Process
Factors that influence marketing mix
Location
Competitors
Product life-cycle
Target market segment
Corporate objectives
How to improve competitiveness
Pricing strategies
Technological advances
Social factors
Convenience product
Inexpensive and brought regularly
Shopping products
Close competitors, etc brought less regularly
Speciality product
Unique and exact brand
What is the Boston matrix?
Valuable way of showing where business products opposition in the market
Marked decisions will depend on products position
Can’t predict exactly what will happen if a product levels may be different from what matrix suggest
What is capacity utilisation
How much capacity a business is using
Capacity depends on
Number of employees and skills
Technology and machinery available
Production process kind
Amount of investment
Why do you not want 100% capacity utilisation
Quality may not be constantly good
May have to turn away potential customers as it can’t increase anymore output
If machines break , output delays
Can’t temporary increase output for seasonal demand
Increasing capacity
Using facilities more of the working week
But more machines
Increase staff levels
Increased productivity +motivation
Use outsourcing (increase workforce)
Why is under utilisation bad
Inefficient and increases unit cost spreads
Causes fixed costs to be spread over fewer output
How to deal with under utilisation
Change promotion, price and distribution
Outsourcing work for other firms
Reduce capacity(downsizing )
Reduce capacity short term via cutting overtime
Not replacing staff and making redundant
Short term changes in capacity utilisation will provide what and long term
Short term flexibility
Long term lower unit costs
Internal stakeholders
Owners , employees and shareholders
External stakeholders
Customers
Suppliers
Local community
Government
Creditors
Manage closely
High power high interest
Shareholders
Keep satisfied
High power low interest
Council and media
Monitor
Low power low interest
Local community
Keep informed
High interest low power
Customer
Employee
Supplier
Factors influencing pricing
Promotion
Costs
Price of elasticity of demand
Product life cycle
Competitors
Price skimming
New innovative products sold at higher prices the dropped
Long term strat to keep brands more exclusive
Customers may be put off for high prices and mad they dropped after they bought
Penetration pricing
Low price at initial release to attract customers and gain market share
Effective for price sensitive markets
Only works if cost are low
Customers expect price to stay low
Extension strategy to lengthen product life cycle
Predatory pricing
Deliberately lowers price to force competitors out the market
Competitive pricing
Monitor competitors prices
Loss leaders
Product sold below cost price
Can make profit indirectly
Dynamic pricing
Responds to change in demand
Aims to increase revenue by changing prices depending on competitors price and demand
If demand rises so do prices
Cash cows
High market share but low market growth
Maturity phase
Bring plenty of money
Stars
High market growth and market share
Growth phase
Spend lot of money on promotion
Dogs
Low market share and market growth
Lost cause entering decline stage
Question marks /problem child
New products entering market
Require heavy marketing
What is personal relations PR?
Gets a business or product good publicity public relations involves liaising with retail answering questions, et cetera
And they write brochures, newsletters, and leaflets and deals with product launches
Direct selling
From manufacturer to consumer
Internet made it user to shop and can be done through door-to-door sales
Indirect selling
Manufacturer to retailer to consumer
Large supermarkets by convenience and shopping goods in bulk direct from manufacturer
Direct direct selling via agent
Sales rep not employed by company and gets commission
Multi channel distribution
Sell through more than one method gives flexibility for customers and wise market coverages 
Short channels
Industrial products, fewer customers, expensive products bulky and frequently
Services 
Long channels
Small products, goods, many customers frequent cells not bulky cheap
What is a trustee?
Board of directors/members of the board of a charity they are pointed and elected for collective responsibility for managing money and assets
Difference in unincorporated and incorporated
Incorporated is the owner is the business. There’s no legal difference and has unlimited liability such a soul traders
Unincorporated have limited liability and there is legal difference such plc and ltd
