Business Trials Exam Notes

Question 1

What is Branding and why is it important?

Answer 1

• It’s the reputation that a business or product has gained. It enables the business to grow and become more profitable.

Question 2

What is Quality management?

Answer 2

• Quality Assurance: Process that prevents products from having problems.
• Quality Circles: Regular group meetings to discuss issues and how they can be improved.
• Quality Control: Checking all stages of the production process to ensure it’s running effectively.

Question 3

Outsourcing?

Answer 3

• When a business takes a part of its business function out and gives it to another business to do.
• More effective and cost saving.

Question 4

SWOT?

Answer 4

• Strengths
• Weaknesses
• Opportunities
• Threats

Question 5

Commercial Bill?

Answer 5

• A bill of exchange which grants a company money for short-term needs. (<365 days)

Question 6

Overdraft?

Answer 6

• Available cash for a business which exceeds their initial amount. Has high-interest rates.

Question 7

Cash Flow Management?

Answer 7

• The managament of cash that comes into the business and leaves it.

Question 8

Influences on finance?

Answer 8

• The internal source of finance: Retained profits - Profits left over in the business.
• The external source of finance: Debt - Short-term or long-term.
• Interest rates
• Economic conditions
• Cash flow
• Controlling interest

Question 9

Implied Conditions?

Answer 9

• AKA Implied warranties: By Law, the company selling the product should refund the product or offer an exchange if it is faulty after leaving the store.

Question 10

Price Skimming?

Answer 10

• Product pricing strategy which sets the highest price of a product first to gain attention to the first customers and then slowly lowers it over time to attract others.

Question 11

Cost-Based Pricing?

Answer 11

• Identifies the cost of manufacturing a product which then has an extra amount added to it to allow for a profit margin.

Question 12

Price Penetration?

Answer 12

• The process of lowering a products price significantly to draw in attention and consumers in hopes they will switch to that brand due to its low price.

Question 13

Fair Work Australia Act (2009)

Answer 13

• Governs the relationships between employers and employees and the conditions set.

Question 14

Legal Compliance?

Answer 14

• The rules set by the government that a business must follow and the costs included in obtaining the set standards.

Question 15

What’s ASIC?

Answer 15

Australian Securities & Investment Commission (ASIC), refers to the safety and fairness standards enforced to the market.

Question 16

Expense Ratio?

Answer 16

Expense/Sales

Question 17

Gross Profit Ratio?

Answer 17

Gross Profit/Sales

Question 18

Net Profit Ratio?

Answer 18

NetProfit/Sales

Question 19

Debt to Equity Ratio?

Answer 19

Total Liabilities/Total Equity (Gearing) lower = better

Question 20

Current Assets?

Answer 20

• Assets that are held for short times and can be turned into cash at any time. (Less than a year)

Question 21

Non-Current Assets?

Answer 21

• Assets within the business that are held for long periods of time and cannot be turned into cash quickly. (Over a year)

Question 22

LIFO?

Answer 22

• (Last In First Out) Products like furniture must be sold first as it’s worth more and will eventually depreciate faster than old stock.

Question 23

FIFO?

Answer 23

• (First In First Out) Used more with food due to old stock being in the need to be sold before it goes old and new stock being placed in line, behind the old stock.

Question 24

JIT?

Answer 24

• (Just In Time) Not too much or too little stock, the right amount to save money and have enough for the consumer demand. This may vary.

Question 25

Resistance to Change?

Answer 25

AKA Intertia: Refers to the resistance of change from employees or employers. (E.g. Elder people using new technology) This may cost and take time due to retraining.

Question 26

Ethical Influence?

Answer 26

• The attitudes and behaviour of people within the business. This may alter and shape the business to suit different ethics.

Question 27

Strategic Roles of HR?

Answer 27

Leadership Styles

• Autocratic (Strict)
• Democratic (Laid back & Employees can take part in the decision making process)
• Delegative (Employees are allowed to make a lot more decisions)

1. Job Design
2. Recruitment
3. Training and development / Induction

• To find the right candidate that fits the job description and can perform their best in that role.

Question 28

Operations Management?

Answer 28

• Producing products and selling them in the most cost-effective and efficient way possible.

Question 29

CSR?

Answer 29

• The action of a business helping the community such as donating to non-profit organisations in order to gain loyalty and relationships between the community.
• Corporate Social Responsibility (CSR)