case study Flashcards by Lauren Purcell

what benefits does the European give us?

common movement
harmonising standards
social chapter

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what is common movement?

free movement of people, goods and services

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what is harmonising standards?

pass high quality standards, based in all European countries

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what is social chapter?

common laws on employment law and consumer law

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what impact on GG toys does free movement of people have?

sales people can move all round Europe selling goods

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what impact on GG toys does free movement of labour have?

get staff from all over EU

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what impact on GG toys does free movement of goods around EU have?

cheaper/ better quality goods from other places in the EU

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what impact on GG toys does being able to pass quality standards in the UK have?

pass quality checks in all EU countries

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what impact on GG toys does importing in raw materials from Europe have?

guaranteed high quality everywhere

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what does SPICED stand for?

strong pound imports cheap exports dear

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to what extend will a rise in interest rates badly effect GG toys?

wont effect GG toys
cheaper to import raw materials
value of pound dropped
costs fall
however raw materials only a small %

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what are the benefits of buying from local suppliers?

local
quick delivery
good quality
English language
ethical

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what are the benefits of buying from global suppliers/

cheaper
variety
good quality (ICT)

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what are benefits of Toms toys setting up a website?

promotion
aware of business
more customers
take orders
deliver large amount of people
expand business

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what are problems Toms Toys might get with setting up a website?

cant interact
cant physically see product
not want to order online
could crash
entire business is down

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what is the definition of a competitive market?

several businesses exist in the one market. this is lots of competition

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what are the native impacts on GG Toys if they move to China?

bad reputation
people wont supply/work for you
hard to get staff
staff aren’t willing to work for low wage
unmotivated staff

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what technology can be used in production?

Robots

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what is the benefits of using robots?

speed
quality
accurate

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what are the problems with using robots?

expensive

not always reliable

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what is retained profit?

profit left over from last year

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what is the benefits of using retained profit to purchase a warehouse?

available all the time

- no interest to pay

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what are disadvantages of using retained profit to purchase a warehouse?

shareholders wont be happy
no dividend
miss out on interest

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what are the benefits of leasing when purchasing a warehouse?

flexible
easily leave
cheaper per month
better cash flow

what are the disadvantages of leasing when purchasing a warehouse?

- owner can cancel | - never own property

what are the benefits of using a bank loan?

- large amounts borrowed at low interest - therefore not getting in debt - regular repayments - cashflow not effected - business constantly has enough money

why id quality important for GG toys?

- keep high reputation - theyr'e seeing a big drop in profits - less wast= money - keep customers happy

what is just in time?

- order just amount of stock needed - less waste - cheaper storage

how would a just in time benefit GG Toys?

- theyr'e not making enough profit - so save money as storage costs are lower - less money spent on keeping products which could be damaged - less waste - cash flow better as less money spent on wasted products

what is economies of scale?

the more you produce the less each one costs and cheaper fixed costs will be

what are the 6 economies of scale?

- financial - production - managerial - marketing - risk bearing - purchasing

what are two economies of scale GG Toys benefit from in China?

- production- financial costs are spread over a lot of products, therefore reducing costs - financial- low rates of interest, so more profits are sent back to UK

what is job production?

when you make something to order

what is batch production?

same machinery to make lots of different products

what is mass/flow production?

making mass of the same product

what are the benefits of job production?

- charge high price | - high quality

what are the problems with job production?

- take a long time to get paid | - a lot of time

what are the benefits of batch production?

- only order in stock you need | - good cash flow

what are the problems with batch production?

- down time | - staff training

what are the benefits of mass/flow production?

- make more products | - less employees

what are the problems with mass/flow production?

- boredom | - storage costs

which production is GG Toys most likely to use?

batch production

why are firms moving their production from Uk to China?

- cheaper labour - cheaper rent - still charge high price - close to Asian market

why are some firms moving back to the UK?

- grants - good reputation - more ethical - British brand name - language

what is the equation for break even?

fixed costs/ sales price - variable cost = products

what are two benefits of GG Toys using breakeven?

- good way to judging business success | - set targets

what are 2 limitations of GG Toys using break even?

- only prediction | - assume fixed costs will always stay fixed

what does cash flow forecasting show?

-money flowing in and out -tells you if theres enough money for a day to day basis enough money for wages

would should you do to improve cashflow?

ask for overdraft

what are 5 sources of finance?

- trade credit - overdraft - credit card - advertise - rasie prices

what are the limitations of cash flow forecasting?

- assume sales are accurate - assume stock costs stay the same - only a forecast

what are the negative impacts of video games of Toms Toys?

- more interested in online games - people spend more money on video games - teenagers aren't going to buy toys

what are some strategies Toms Toys could use to promote?

- get recommendations - better promotions - sell online

what are the benefits of giving grants?

- dont have to pay back - good for publicity - creates jobs - encourages businesses to expand

what are the problems with giving grants?

- long time tog et one - expensive - only use it for what government say you can - council tex + business rates increase - spend else where (schools)

what are two reasons why Bowton Council are offering grants?

- more jobs made - decrease unemployment - given to existing businesses looking to expand - so saving peoples jobs

what is the negative impact on unemployment?

- lots of people without job - leads to more unemployment - businesses shut down, less customers

what are the positives of unemployment?

- lower wages - motivate staff to keep jobs - sell else where for high prices