Business Types, Product, Market Flashcards
What is a sole proprietor (sole trader)?
Sole traders are businesses that are owned by just one person.
What are advantages of sole proprietors?
- Low start up costs
- Easy to set up
- Owner has complete control
- Owner keeps all profits
- Financial info kept private
What are disadvantages of sole proprietors?
- Unlimited liability
- Difficult to raise capital
- Usually small businesses
- Have to work long hours with few holidays
What is a partnership?
A partnership is a business that has between 2 and 20 owners who jointly own and manage the business.
What are the advantages of a partnership?
- More capital invested as more owners
- Specialist skills of different partners
- Easy to setup
- Financial information kept Private
What are the disadvantages of a partnership?
- Profit has to be shared
- Unlimited liability
- There may be disagreements
What is a private limited company?
A limited company owned by a small group of people, often family or friends.
What is a PLC?
Public limited company otherwise known as a PLC, is a limited company which sells shares to many people all over the world.
What is a public Corporation?
A public corporation is an organisation which is owned by the nation’s government?
What are some features of a public corporation?
- They have limited liability
- They are owned and controlled by national or local governments on behalf the people
- They do not make a profit
- They tend to make merit goods, things that are good for us
What is privatisation?
Privatisation is a policy that involves selling off the nation’s companies.
What is a multinational company?
A multinational company is a company which has facilities in several different countries.
What are the three considerations for when marketing a product?
Design, idea and Price
What are the five stages in the product life cycle?
Introduction, growth, maturity, saturation and decline. Note: development can sometimes be shown before introduction.
What is the Boston matrix?
The Boston matrix is a product mix which is used by companies to analyse the effectiveness and potential of each of their products.
In the Boston matrix what name is given to a product with low growth and low market share?
A dog.
In the Boston matrix what name is given to a product with low growth but high market share?
Cash cow.
In the Boston matrix what name is given to a product with high market growth but low market share
Problem children.
In the Boston matrix what name is giving to a product with high market growth and high market share?
Stars.
What is a mass-market?
A market where the products are aimed at and consumed by the majority of people.
What is a niche market?
A Market which sells specialised products to small minority of consumers, usually expensive.
What is Field research?
Field research is research collected by the company, often using things such as surveys, questionnaires and focus groups.
What is desk research?
Desk research is research that has been collected from a secondary source, often from other companies.
What are the three main taxes a business has to pay?
Value added tax (VAT), income tax and National Insurance, corporation tax.
What are the three methods of expansion?
Internal (organic) growth, external growth and franchising.
