Business Types, Product, Market

Question 1

What is a sole proprietor (sole trader)?

Answer 1

Sole traders are businesses that are owned by just one person.

Question 2

What are advantages of sole proprietors?

Answer 2

1. Low start up costs
2. Easy to set up
3. Owner has complete control
4. Owner keeps all profits
5. Financial info kept private

Question 3

What are disadvantages of sole proprietors?

Answer 3

1. Unlimited liability
2. Difficult to raise capital
3. Usually small businesses
4. Have to work long hours with few holidays

Question 4

What is a partnership?

Answer 4

A partnership is a business that has between 2 and 20 owners who jointly own and manage the business.

Question 5

What are the advantages of a partnership?

Answer 5

1. More capital invested as more owners
2. Specialist skills of different partners
3. Easy to setup
4. Financial information kept Private

Question 6

What are the disadvantages of a partnership?

Answer 6

1. Profit has to be shared
2. Unlimited liability
3. There may be disagreements

Question 7

What is a private limited company?

Answer 7

A limited company owned by a small group of people, often family or friends.

Question 8

What is a PLC?

Answer 8

Public limited company otherwise known as a PLC, is a limited company which sells shares to many people all over the world.

Question 9

What is a public Corporation?

Answer 9

A public corporation is an organisation which is owned by the nation’s government?

Question 10

What are some features of a public corporation?

Answer 10

1. They have limited liability
2. They are owned and controlled by national or local governments on behalf the people
3. They do not make a profit
4. They tend to make merit goods, things that are good for us

Question 11

What is privatisation?

Answer 11

Privatisation is a policy that involves selling off the nation’s companies.

Question 12

What is a multinational company?

Answer 12

A multinational company is a company which has facilities in several different countries.

Question 13

What are the three considerations for when marketing a product?

Answer 13

Design, idea and Price

Question 14

What are the five stages in the product life cycle?

Answer 14

Introduction, growth, maturity, saturation and decline. Note: development can sometimes be shown before introduction.

Question 15

What is the Boston matrix?

Answer 15

The Boston matrix is a product mix which is used by companies to analyse the effectiveness and potential of each of their products.

Question 16

In the Boston matrix what name is given to a product with low growth and low market share?

Answer 16

A dog.

Question 17

In the Boston matrix what name is given to a product with low growth but high market share?

Answer 17

Cash cow.

Question 18

In the Boston matrix what name is given to a product with high market growth but low market share

Answer 18

Problem children.

Question 19

In the Boston matrix what name is giving to a product with high market growth and high market share?

Answer 19

Stars.

Question 20

What is a mass-market?

Answer 20

A market where the products are aimed at and consumed by the majority of people.

Question 21

What is a niche market?

Answer 21

A Market which sells specialised products to small minority of consumers, usually expensive.

Question 22

What is Field research?

Answer 22

Field research is research collected by the company, often using things such as surveys, questionnaires and focus groups.

Question 23

What is desk research?

Answer 23

Desk research is research that has been collected from a secondary source, often from other companies.

Question 24

What are the three main taxes a business has to pay?

Answer 24

Value added tax (VAT), income tax and National Insurance, corporation tax.

Question 25

What are the three methods of expansion?

Answer 25

Internal (organic) growth, external growth and franchising.