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pe mr brennan > business studies paper 1 > Flashcards

business studies paper 1 Flashcards

1
Q

what is a entrepreneur

A

a person who has always wanted to start a business from scratch

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2
Q

what are the characteristics of an entrepreneur

A

risk taking, confident, creative, perseverance, leadership, enthusiasm

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3
Q

what are the factors of production

A

land
labour
capital
enterprise

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4
Q

what is value added

A

what a business adds to its product to ensure they are making a profit

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5
Q

what is the chain of production

A

stages that a product passes through until it reaches the final customer
as a product travels along the production line it has value added to it

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6
Q

what are the three sectors

A

primary
secondary
tertiary

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7
Q

what is the primary sector

A

the primary sector involves extractive industries eg. farming, forestry and mining

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8
Q

what does the secondary sector involve

A

concerned with the manufacturing of goods, so turning raw materials into finished and semi finished products

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9
Q

what is involved in the tertiary sector

A

output of services

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10
Q

what is deindustrialisation

A

the decline in the size of the secondary sector over time

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11
Q

what is the private sector

A

businesses that have the main goal of making profit

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12
Q

what is the public sector

A

businesses owned by government and local communities not made for profit

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13
Q

what effect does the secondary sector (manufacturing) have on the other sectors

A

this will have a positive effect on the primary and tertiary sector

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14
Q

what is a sole trader

A

owner of a business and makes all the decisions

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15
Q

advantages of being a sole trader

A

make all your own decisions
keep all the profit
cannot issue shares so cannot be taken over
financial state of the business can be kept private

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16
Q

disadvantages of being sole trader

A

unlimited liability- so responsible for all of the debts
hard to raise capital for expansion
must single handily perform all of the business functions which can be exhausting
can easily get overworked
usually small businesses - no large profits
no continuation of the business if he/she dies

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16
Q

what is a partnership

A

when 2-20 people start a business together

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16
Q

advantages of a partnership

A

shared capital and skills
multiple inputs- can be used to solve problems
easy to establish
finances kept private
some partnerships can be limited liability but there finances are no longer private and they have to register with companies house

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16
Q

disadvantages of a partnership

A

unlimited liability
risk of disagreeing
profits are shared

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17
Q

what is the third sector

A

usually reinvest there profits eg. faith groups and charities

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18
Q

what is a franchise

A

a well known brand name

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19
Q

what is a franchiser

A

a franchiser lets someone else set up a business using that brand

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20
Q

what is a franchisee

A

the person who sets up the business using that brand

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21
Q

advantages of a franchiser

A

don’t have to pay much to expand
can charge high price for demand
continuous flow of money coming in

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22
Q

disadvantages of a franchiser

A

less control, more time and money spent on ensuring that the franchisee follows all the correct procedures

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23
Q

advantages of a franchisee

A

greater chance of success as they are already an established brand
they get specialist advice and training
franchiser does the market research so you don’t have to
easier to obtain a loan

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24
Q

disadvantages of a franchisee

A

expensive supplies
%of profits are given to franchiser
cannot be sold without franchisers permission
less control

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25
Q

what is a cooperative

A

when a business owned and run by its members
profits shared between members rather than shareholders

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26
Q

advantages of a cooperative

A

straight forward and inexpensive to set up
everyone is working towards a common goal so motivation is high
usually limited liability

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27
Q

how do you determine a businesses size

A

number of employees
market share
capital employed
level of profit and turnover
number of factories, offices and shops
number of employees

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28
Q

factors that affect the size of a business

A

what type of market you are in (niche or mass)
demand for your product
how many competitors you have

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29
Q

what is a stakeholder

A

people who are interested in how the business are doing

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30
Q

who are the stakeholders in a business

A

customers
suppliers
government
local community
owners
shareholders
employees

31
Q

what is organic growth

A

process of a business expanding its operations internally and relying on its own resources to grow.

32
Q

what is a merger

A

when two businesses join together to create a new larger business

33
Q

what is a takeover

A

when one business gets control of another business by buying its shares

34
Q

what are joint ventures

A

a formal agreement between 2+ businesses to work on a particular project together

35
Q

what is a strategic alliance

A

similar to joint venture but less involved and less permanent.

36
Q

what is the owners objective as a stakeholder

A

to grow
get the best return on investment possible

37
Q

what are the employees objective as stakeholders

A

good wage
job security
job satisfaction
training

38
Q

what are the customers objectives as stakeholders

A

best quality products at the lowest price
good customer service
environmentally friendly products

39
Q

what are the suppliers objectives as stakeholders

A

repeat orders
prompt payments

40
Q

what are the lenders objectives as stakeholders

A

repayment at agreed time

41
Q

what are the local communities objectives as stakeholders

A

job opportunity
community involvement

42
Q

what are the objectives for the government as stakeholders

A

more jobs
less benefits to pay out
exporting

43
Q

what are porters 5 forces

A

threats and new entrants
bargaining power of suppliers
bargaining power of consumers
threat of substitutes
degree of existing rivalry

44
Q

porters generic strategies

A

cost leadership
differentiation
focus or niche
stuck in the middle

45
Q

advantages of a business plan

A

gives a sense of direction
sets role of each department
encourages communication between different departments

46
Q

disadvantages of a business plan

A

time consuming
very costful
opportunity cost
plan could be to rigid

47
Q

what is a strategic review

A

a method used to improve and sustain performance

48
Q

what is the plan, do, review process

A

plan- establish objectives and course of action
do- implement the plan
review- formal ongoing evaluation of the process

49
Q

advantages of strategic review

A

underperforming departments can be identified
helps senior managers decide on where the business is headed

50
Q

advantages of the plan, do, review process

A

forces strategic approach when setting objectives
employees focused on getting results
encourages a ‘kaizen’ approach

51
Q

disadvantages of the plan, do, review process

A

lengthy process
inflexible once started
if employees haven’t been involved in the planning then they will feel less motivated
employees may dislike the ongoing review

52
Q

what is contingency planning

A

planning for ‘what will happen if things go wrong’

53
Q

advantages of contingency planning

A

reduces risk of uncertainty
minimises damage done
keeps business operating
increases insurance availability

54
Q

disadvantages of contingency planning

A

opportunity cost of time taken to construct plan
people constructing the plan may not be honest about their assessment of risks

55
Q

what is crisis management

A

process taken by a business to deal with an event that threatens to harm the business/ stakeholders

56
Q

what is involved in Ansoff’s matrix

A

market penetration
market development
product development
diversification

57
Q

what is the Boston matrix

A

a tool that is used to decide what products to produce

58
Q

what is involved in Boston matrix

A

rising star
problem child
cash cow
dog

59
Q

what is the rising star

A

product has high market share and has potential to grow

60
Q

what is the cash cow

A

high sales low market growth though

61
Q

what is the dog

A

low market share and low market growth

62
Q

what is the problem child

A

low market share within a market that is rapidly growing

63
Q

advantages of the Boston matrix

A

a business can see if it has a balanced portfolio or not
a business does not want dogs but does want cash cows

64
Q

what is cost plus pricing

A

when you calculate your costs and add a mark up

65
Q

what is competitor pricing

A

when you base your prices off of your competitors

66
Q

what is price skimming

A

when you charge a high price and then get lower and lower as time goes on

67
Q

penetration pricing

A

when you start off with a low price to get into the market then raise your prices

68
Q

what is premium pricing

A

when you charge a high price for high quality and luxury goods

69
Q

what is psychological pricing

A

an example of this is charging £3.99 instead of £4 makes the customer think that they are getting a deal

70
Q

what is dynamic pricing

A

when the demand for something will dictate the price e.g.. low demand high price

71
Q

formula for labour turnover

A

number of employees who left during the yr / average number employed during the yr x100

72
Q

formula for labour stability index

A

number of employees with 1 or more yrs experience / number of employees 1 yr ago x100

73
Q

formula for absenteeism

A

total days absent in a month / total number of working days in a month x 100

74
Q

formula for lateness

A

total number of late arrivals / total number of scheduled attendances x 100

75
Q

formula for workforce productivity

A

output per (day/month/yr) / average number of employees

76
Q

formula for wastage rates

A

number of rejects produced by department / total number of units produced x 100

77
Q
A

pe mr brennan (6 decks)

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