Business written test

Question 1

Define SWOT (strengths, weaknesses, (internal) opportunities and threat(external) analysis

Answer 1

A tool to identify and analyse the internal strengths and weaknesses of an organisation, as well as the external opportunities and threats created by the business and economic environment

Question 2

Define porters five forces

Answer 2

A model that suggest there are 5 main forces on a business that determine the behaviour of business and the likely levels of profitability.

Question 3

What are Porters five forces (include this in the definition)

Answer 3

Buyer power
supplier power
threat of substitutes
threat of new entry
-competitive rivalry (threat from competitors)

Question 4

Analyse and evaluate the current position of Dominos pizza in the market

Answer 4

Competition: low barriers to entry constantly have to innovate and meet consumer demands

Threat of new rivalry: constant threat rapid growing, economies of scale (marketing), well establish. Quantitative data suggests that they are effective

Threat of substitutes: constant threat

supplier power: can negotiate in their favour. which gives them an advantage

Buyer power: Depending on location, consumers will have a wide rage of options which gives them some buyer power. Meaning dominos may have to continuously have sales and new products to tempt customers

Question 5

Price elasticity of demand formula

Answer 5

%change in quantity demanded/ %change in price

Question 6

price elastic

Answer 6

number is greater than 1. Meaning a change in price will cause a more than proportional change in demand. If the price goes up then demand falls by a significant amount and visa versa

Question 7

Price inelastic

Answer 7

Number is less than 1. Meaning a change in price will lead to a less than proportional change in quantity of demand. If the price goes up then the demand falls by a little amount.