Business Mocks 1 Flashcards
What is the primary purpose of most businesses?
To produce goods or provide services to meet customer needs.
Define a need and a want.
A need is something essential for survival, like food; a want is something desirable but not essential, like a holiday.
What is the difference between a good and a service?
A good is a physical product, whereas a service is an intangible action provided.
Name two types of private sector business ownership.
Sole trader and private limited company (Ltd).
What is one advantage of being a sole trader?
The owner keeps all the profits.
What does ‘limited liability’ mean for shareholders?
Shareholders are only liable for the amount they have invested in the business.
What is one method a business can use to grow internally?
Opening new stores or launching new products.
What is a benefit of merging with another business?
Increased market share and resources.
What is one risk of expanding too quickly?
Cash flow problems or losing control of operations.
What happens to consumer spending during a recession?
It generally decreases.
Name one way a rise in unemployment might affect a business.
Lower demand for luxury goods.
What is inflation?
The rate at which the general price level of goods and services rises over time.
What does globalisation mean?
The increasing interconnectedness of countries through trade, investment, and technology.
Name one advantage of globalisation for a business.
Access to larger markets and cheaper resources.
What is one challenge globalisation might bring?
Increased competition from international businesses.
Name the three main types of production processes.
Job, batch, and flow production.
What is an advantage of using flow production?
High efficiency and lower unit costs.
Which type of production is best for custom-made products?
Job production.
What does procurement mean?
The process of acquiring goods and services a business needs from suppliers.
Name one factor a business should consider when choosing a supplier.
The cost of the supplier’s goods or services.
What is the impact of poor-quality suppliers on a business?
It can lead to delays and customer dissatisfaction.
Why is quality important in a business?
It affects customer satisfaction and loyalty.
What does TQM stand for?
Total Quality Management.
Name one benefit of quality control.
It ensures defective products are identified before reaching customers.
What is one feature of good customer service?
Responding quickly to customer complaints.
Name one benefit of providing excellent customer service.
It can increase customer loyalty and repeat purchases.
What is the impact of poor customer service on a business?
It can lead to bad reviews and loss of customers.
What is meant by a flat organisational structure?
A structure with few levels of hierarchy and wider spans of control.
What is one advantage of a hierarchical structure?
Clear lines of authority and accountability.
Define ‘span of control.’
The number of employees a manager is directly responsible for.
