Core Knowledge Flashcards
What are the 2 types of price elasticity?
price elastic
price inelastic
What is price elastic?
no differentiation
increase sp = significant fall in demand
What is price inelastic?
differentiation
increase sp = insignificant fall in demand
Price elastic and price inelastic
(greater than or less than)
elastic = greater than 1
inelastic = less than 1
What is income elasticity of demand?
YED
What is luxury, normal and inferior?
(more than 1 or less than 1)
luxury = more than 1
normal = between 1 and 0
inferior = less than 0
What are the 4 types of EOS?
purchasing
technical
marketing
financial
What is distribution?
The route a product takes from producer or manufacturer to consumer
Distribution process
producer > wholesaler > retailer > customer
What are the 2 types of distributions?
Traditional and Direct
What is specialisation?
when a business or country focuses on producing just one product or a narrow range of products
What are Porter’s Generic Strategies?
Mass Market = cost leadership and differentiation
Niche Market = cost focus and differentiation focus
What is a niche market?
a small, specialised market for a particular product or service
What is a mass market?
market (a product) on a larger scale
What is productivity?
(ONLY USED FOR MANUFACTURING)
the output per worker or per machine in a given time
What is capacity utilisation?
the percentage of total capacity that is actually being achieved in a given period
What are the 2 methods of motivation?
Financial and non-financial
What are the financial methods?
salaries
commission
bonus
profit sharing
performance related pay
share options
fringe benefits
piece rate
What are the non-financial methods?
empowerment
praise
promotion
job enrichment
job enlargement
better communication
what are salaries?
(financial)
increase pay
what are commissions?
(financial)
paying staff a % of the revenue they generate (in addition to their pay)
what are bonuses?
(financial)
additional payment on top of salary due to performance
what is profit sharing?
(financial)
allocating a certain proportion of annual profits to be shared as a bonus among staff
what is performance related pay?
(financial)
rewarding staff whose performance exceeds certain level
what is share options?
(financial)
employees offered share of business - receive dividends
what are fringe benefits?
(financial)
a form of compensation - additional perks
e.g. company car, retirement plans, gym membership, office child day-care, corporate meal plans
what is piece rate?
(financial)
payment in each item produced
★ Taylor
what is empowerment?
(non-financial)
passing on power to staff
increased independence
what is praise?
(non-financial)
receiving recognition of performance
feeling trusted and valued
what is promotion?
(non-financial)
increasing level role of job
what is job enrichment?
(non-financial)
giving staff added responsibilities and challenges (higher level of challenge)
what is job enlargement?
(non-financial)
increasing number of tasks an employee has to do (same level of challenge)
What are the effects of having a motivated workforce?
increased productivity
lower labour turnover
increased innovation
lower absenteeism
