Business Strands To Memorise!! Flashcards
growth —»> ? sales —»> increased market ? —»> ? market power —»>able to increase ? without a ? fall in sales —»> improved ?
increased, share, increased, price large, profitability
growth —»> ? sales —»> ? revenue —»> increased cash ? —»> if the cash ? are greater than the ? outflows then an increased ? cashflow —»> decreased risk of ? —»> survival
increased, increased, inflows, inflows, cash, net, insolvency
(in a competitive market)
growth —»> ? sales —»> ? of scale —»> ? per unit decreases —»>able to decrease ? —»> competitive ? —»> increased market ? or ?
increased, economies, cost, prices, advantage, share, growth
(if the business has control of the market)
growth —»> ? sales —»> ? of scale —»> ? per unit decreases —»>able to keep the same ? —»> ?
increased, economies, cost, price, profitability
growth —»> increased ? —»> diversification —»> more ? streams —»> more ? inflows —»> greater net ? (if ? inflows are greater than ?) —»> decreased risk of ? —»> ?
sales, revenue, cash, cashflow, cash, outflows, insolvency, survival
increased market ? —»> increased brand ? —»> greater trust from ? —»> able to ? price without a large ? in sales —»> profitability
share, awareness, customers, increase, fall
increased sales —»> increased ? —»> increased ? inflows —»> increased net ? —»> lower risk of ? so therefore ?
revenue, cash, cashflow, insolvency, survival
increased sales —»> increased ? share —»> increased market ? —»> able to increase ? —»> increased ?
market, power, prices, profitability
increased sales —»> more output ? —»> able to respond to ? of scale —»> reduced ? per unit —»> profitability/ drop ? and get a ? advantage
needed, economies, cost, prices, competitive
decreased productivity —»> decreased output per ? —»> increased ? per unit —»> decreased ?
worker, price/cost, profitability
decreased productivity —»> decreased output per ? —»> increased ? per unit —»> may have to ? price —»> lose their competitive ?
worker, price, increase, advantage
equation for profitability and if a business has a high profitability what does that mean?
profit/revenue, they have lots of profit to allow for growth and normally have a low product range
6 main objectives of large businesses
1. Growth of ? or market ?
2. Improving ?
3. Entering or ? markets
4. ? or decreasing product ?
5. Growing or reducing the ?
6. Focus on survival - ? cashflow
sales, share
profitability
exiting
increasing, range
workforce
improving
diversity —»> more ? —»> more revenue ? —»> more ?
markets, streams, revenue
definition of economies of scale? (and example)
occurs when mass producing a good, resulting in a lower average cost in the long run, eg: a small bakery makes 1000 loaves of bread per week with traditional bread-making technique, while a big factory makes thousands with expensive machinery. small bakery will have lower production costs(but higher costs per unit) but overall it will cost less per unit for the big factory
what is diversification?
a strategy to reduce risk by spreading into new products or markets - DONT KEEP ALL OF YOUR EGGS IN ONE BASKET!!!
what is internal/ organic growth?
where a business grows gradually through innovation and attracting new customers
what is external/inorganic growth?
where a business grows by joining with or taking over another business
what is a takeover (inorganic growth)
where one company acquired another business (normally through acquiring a majority stake in that company) and the original company doesn’t function on its own anymore
what is a merger?
an agreement between the owners of two businesses to come together and create one larger company
how does a merger benefit both the companies involved?
they both gain knowledge and assets
way to write a six marker using COMPS
choose an example -> type of growth -> they did this because..? -> which leads to -> and therefore
also use context - so who are the customers, what are their objectives, what market are they in, what product and what situation?
what is a ‘vertical backwards’ business merger?
when a business buys a supplier of the business, like Netflix buying a tv production company
what is a ‘conglomerate’ business merger?
when a business buys a completely different business
what is a ‘vertical forwards’ business merger?
when a business buys a distributor of the business, eg: a brewery buying a chain of pubs
what is a ‘horizontal’ business merger?
when a business buys another/ same type of business, eg: B&Q merging with Homebase
why do businesses do ‘vertical backwards’ mergers? (2 reasons)
- to keep costs low
- to ensure supplies don’t run out
why do businesses do ‘conglomerate’ mergers? (2 reasons)
- to get into a new market
- to spread their risk
why do businesses do ‘vertical forwards’ mergers? (2 reasons)
- to understand customers better
- to keep control of their brand image
why do businesses do ‘horizontal’ mergers? (2 reasons)
- to negotiate bulk buying
- to get rid of the competition (and increase market share)
