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Business exam revision > Centre assessed exam 1 > Flashcards

Centre assessed exam 1 Flashcards

1
Q

What are Porter’s five forces?

A
  • Threat of new entrants
  • Buyer power
  • Supplier power
  • Threat of substitutes
  • Rivalry
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2
Q

In Porter’s five forces model, what is threat of entrants all about?

A

How new competitors will affect businesses

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3
Q

In Porter’s five forces model, what is buyer power all about?

A

Buyers want products at a lower price as possible and how much power they have to demand this.

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4
Q

In Porter’s five forces model, what is supplier power all about?

A

How much power suppliers have to demand the highest price possible.

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5
Q

In Porter’s five forces model, what is the threat of substitutes all about?

A

How likely customers are to buy alternative products

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6
Q

In Porter’s five forces model, what is the rivalry within the industry all about?

A

How much competition there is within the industry

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7
Q

What are some strategies to raise barriers to entry?

A
  • Patents or trademarks
  • Established businesses may take control of distribution channels
  • Threatening new entrants with a price war
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8
Q

What are some strategies to influence buyer power?

A
  • A company might buy the supplier out

- Similar businesses could form a buying group in order to buy in bulk and offer better deals

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9
Q

What are some strategies to influence supplier power?

A
  • Businesses can try to tie buyers into long-term contracts
  • Suppliers can use forward integration to gain power
  • Businesses could develop new products and patent them to gain supplier power
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10
Q

What are some strategies to reduce the threat of substitutes?

A
  • Businesses can make it expensive or difficult to switch to substitutes
  • they could differentiate to create more brand loyalty
  • Identify gaps in the market and target the needs of these customers
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11
Q

What are the main reasons for Market research?

A
  • It helps businesses spot opportunities
  • It helps them decide what to do next
  • It helps them see if their plans are working
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12
Q

What are the setbacks of doing market research?

A
  • Can be expensive

- Bad research can lead to terrible business decision being made

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13
Q

What is qualitative research?

A

It looks into feelings and motivations of consumers through using open-ended questions?

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14
Q

What is quantitative research?

A

It produces numerical statistics through the use of closed-end questions

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15
Q

What is primary research?

A

It is gathered first hand through the use of questionnaires, interviews, surveys and focus groups.

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16
Q

What is secondary research?

A

Secondary research involves the summary of existing research that was collected by someone else.

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17
Q

What is SWOT analysis?

A

It is a four-factor model that details the strengths, weaknesses, opportunities and threats facing a business.

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18
Q

What is the equation for Market Capitalisation?

A

Number of shares issued x current share price

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19
Q

What is a zero-hour contract?

A

This is when employees are not guaranteed any hours on a weekly basis

20
Q

What is a full-time contract?

A

When employees must work a minimum of 35 hours weekly and are very beneficial financially and security-wise.

21
Q

What is a part-time contract?

A

Similar to a full-timer but employees can work less than 35 hours a week

22
Q

What type of decisions do SWOT analysis help with?

A

Strategic decisions

23
Q

What is the current ratio?

A

Current assets/ current liabilities

24
Q

What is the ROCE equation?

A

(Operating profit/ equity + non-current liabilities) x100

25
Q

What is the inventory turnover equation?

A

Cost of sales/average number of stock held

26
Q

What is the payables days equation?

A

(Payables/ cost of sales) x365

27
Q

What is the receivables days equation?

A

(receivables/cost of sales) x 365

28
Q

What is the gearing ratio?

A

(Non-current liabilities/ equity + non-current liabilities) x100

29
Q

What is the chain of command in a tall structure?

A

Long chains of command

30
Q

What is the chain of command in a short structure?

A

Short chain of command

31
Q

What is the span of control in a tall structure?

A

Narrow

32
Q

What is the span of control in a short structure?

A

Wide

33
Q

What is delayering?

A

This is the removal of a layer in the hierarchy of a business to decrease costs

34
Q

What are the advantages of a centralised structure?

A
  • Leaders have lots of experience
  • Decisions are consistent throughout the business
  • Senior managers are not biased to certain departments
  • Decisions are made quickly
35
Q

What are the disadvantages of a centralised structure?

A
  • May not be experienced for such large decisions
  • Can de-motivate employees as they are excluded from decisions
  • Takes a long time to implement
36
Q

What are the advantages of a decentralised structure?

A
  • Involvement will motivate employees
  • Employees can use expert knowledge of their sector
  • Day-to-day decisions can be much quicker
37
Q

What are the disadvantages of a decentralised structure?

A
  • Junior managers may not have the experience
  • Inconsistencies between departments could occur
  • Junior managers may not see the overall situation of the business
38
Q

What is the equation for labour productivity?

A

Output/ number of employees

39
Q

What are ways to increase efficiency?

A
  • Improve worker motivation
  • Training workers
  • New technology
40
Q

What is JIT production?

A

This means only ordering materials when they are necessary in order to minimise storage costs.

41
Q

What is time-based management?

A

Companies try to be the first to get their product on the market.

42
Q

What are advantages of time-based management?

A
  • It reduces lead time
  • Gives the company a competitive advantage
  • More varied product range
  • Drives innovation by decreasing R&D time
43
Q

What are the advantages of a capital-intensive production?

A
  • Cheaper in the long term
  • Machinery is more precise
  • Available 24/7
  • Machines are easier to manage than people
44
Q

What are the disadvantages of a capital-intensive production?

A
  • High set-up costs
  • Machines are inflexible
  • Can be long delays if machines break
  • Workers can become demotivated
45
Q

What are the advantages of a labour-intensive production?

A
  • People are flexible and can be retrained
  • Cheaper for small-scale production
  • Cheaper if Low-cost labour is available
  • Workers can solve problems and input ideas
46
Q

What are the disadvantages of a labour-intensive production?

A
  • It’s harder to manage people than machines
  • People can be unreliable
  • People need breaks or holidays
  • People will demand higher wages
47
Q

What is the market share equation?

A

company sales / total sales x 100

Business exam revision (2 decks)

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