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business paper 2 Flashcards

1
Q

3 methods of internal growth?

A

New markets, new products and new technology

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2
Q

2 methods of inorganic growth?

A

Merger and takeover

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3
Q

Difference between merger and takeover?

A

Merger- 2+ businesses join up and work as one
Takeover- when 1 business buys another

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4
Q

Examples of internal finance sources?

A

Sale of assets
Retained profit

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5
Q

What are dividends?

A

A sum of money paid regularly by a company to its shareholders out of its profits

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6
Q

How does globalisation affect businesses?

A

Imports- lower prices of products and raw materials
Exports- new international markets
Businesses location

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7
Q

Pros and cons of globalisation?

A

Pros- new market opportunities, access to tech and resources
Cons- threat from foreign competition, challenge of adapting products and services to meet needs of foreign consumers

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8
Q

2 trade barriers?

A

Tartiffs- taxes on imports
Trade blocs- promoting trade between small group of countries

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9
Q

3 ways businesses can reduce the impact on the environment?

A

Use renewable energy
Reduce food miles
Use biodegrade packaging

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10
Q

5 Stages in product life cycle?

A

Development, Introduction, Growth, Maturity, Decline

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11
Q

What are examples of extension strategies?

A

New marketing campaign, adding new features to the product, changing the packaging, targeting new markets

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12
Q

4 types of promotional methods?

A

Advertising
Sponsorship
Product trails
Special offers

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13
Q

What are 3 values of a strong brand?

A

Commercial responsibility
Customer value
Culture

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14
Q

What is a PLC and what are the advantages and disadvantages of it?

A

A business that can sell shares on the stock exchange
Pros- limited liability, a lot of capital can be raised
Cons- risk of takeover, not that much privacy

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15
Q

How do you calculate net profit?

A

Gross profit- other operating expenses

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16
Q

How do you calculate gross profit?

A

Sales revenue- cost of sales

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17
Q

What is the gross profit margin and how do you calculate it?

A

Indicates the proportion of sales revenue turned into gross profit
Gross profit/ sales revenue x 100

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18
Q

What is the net profit margin and how do you calculate it?

A

Indicates the proportion of sales revenue turned into net profit
Net profit / sales revenue x 100

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19
Q

How do you calculate the average rate of return?

A

Average annual profit/ cost of investment x 100

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20
Q

How do you calculate the average annual profit?

A

Total profit/ number of years

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21
Q

What is meant by floating on the stock market?

A

the process of converting a private company into a public company by selling shares to the public for the 1st time.

22
Q

How can a public limited company be taken over?

A

Because shares can be bought by the public- if one individual or group purchases a majority shareholding, they can take control

23
Q

What’s two advantages of having a centralised structure?

A

The business will have increased control and standardisation at headquarter level

24
Q

Why would a struggling business delayer?

A

Improves the cash flow of business in the long time as it is downsizing the business by getting rid of expensive management layers

25
Q

What’s the difference between a hierarchical structure and a flat structure?

A

Hierarchical have lots of levels and many promotion opportunities but flat structures have few levels of authority and are more responsive to change

26
Q

What’s the difference between a decentralised and centralised business?

A

Centralised decisions are made in a head office whereas decentralised decisions are made at a local level

27
Q

What is remuneration?

A

Salary, bonus and benefits

28
Q

Why could communication be poor?

A

Jargon
Wrong language
Biased
May not seek feedback or act upon it
Technology issues

29
Q

What are fringe benefits?

A

Additional employment perks awarded to employees- e.g free membership

30
Q

What are the 3 ways that businesses can use financial methods for motivation?

A

Remuneration, bonus and commissions

31
Q

What are two non-financial methods of motivation?

A

Job enrichment- making a job more interesting and less boring
Job rotation- giving short periods of time for various different jobs
Job training- learning new skills

32
Q

What’s the difference between formal and informal training?

A

Formal would be things such as organised courses and qualifications whereas informal is things such as watching someone else doing the job and talking through how to do things

33
Q

What are 3 reasons for businesses doing regular performance management reviews?

A

Helps identify training needs
Helps employees set targets
Can be linked to pay increases

34
Q

Two impacts of technology on training?

A

Allowed training to be undertaken remotely
Allowed complex jobs such as pilots to use simulators

35
Q

What is meant by autonomy?

A

A situation where an employee is empowered to make their own decisions

36
Q

What are the impacts that technology has on production?

A

Updated existing products
Faster productivity
Consistent quality
Doesn’t work well for flexible/personalised products

37
Q

5 different ways of training and developing employees?

A

Formal and informal learning
Self-learning
Ongoing training
Target setting
Performance reviews

38
Q

Difference between internal and external recruitment?

A

Internal is within the existing workforce whereas external is an applicant from outside the workforce

39
Q

What are examples of recruitment documents?

A

Person specification, job description, application form and CV

40
Q

What is meant by a freelance contract?

A

Usually where one is self- employed and they work for a trade or business that they have set up themselves

41
Q

What are the different ways business aims and objectives can change?

A

Focus on survival or growth
Entering or exiting markets
Growing or reducing the workforce
Increasing or decreasing the product range

42
Q

Advantages of being a public limited company?

A

Can raise capital
Better financial opportunities
Limited liability
Better growth and expansion opportunities

43
Q

How does the internet help businesses compete internationally?

A

Provides an easy way for businesses to gain access to a much wider range of potential customers

44
Q

How can price, place and promotion be affected by ethical or environmental issues?

A

Price- changing pricing to make ethical products a realistic choice
Place- change distribution methods, eg vehicles that pollute less
Promotion- promoting environmentally-friendly products

45
Q

How can a business improve its productivity?

A

Investing in up-to-date machinery
Providing incentives
Providing training

46
Q

What are the different channels of distribution ?

A

Producers, retailers and e-tailers

47
Q

What are the 5 stages in the sales process?

A

1) Customer interest
2) Speed and efficiency of service
3) Customer engagement
4) Post-sales service
5) Customer loyalty

48
Q

What can excessive or insufficient communication lead to?

A

Affecting the motivation of staff as they may not know what’s going on or may be overloaded with information

49
Q

Difference between quality control and quality assurance?

A

Quality assurance is the processes to prevent problem whereas quality control comes after to detect and correct problems

50
Q

An advantage and disadvantage of job production?

A

High quality product + customised
Long and expensive production

51
Q

Advantage and disadvantage of batch production?

A

Allowed flexible production but there may be additional costs and delays in preparing equipment

52
Q

Advantage and disadvantage of flow production?

A

Machinery is precise and requires little energy however machinery can be expensive

. (9 decks)

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