coursework test Flashcards
what are the importance of added value? (5)
- to fulfil customer expectation
- have own USP of their product - have differentiation among competitors
- keep up with latest market trends, able to cope with incoming business opportunities
- attract variety of customers -> promote brand loyalty
- have competitive advantage
how should you add value to your product/service (method-5)
1- carry out market research
2- conduct market survey to find out needs of the market
3- anticipate future market trends
4- be innovative & creative
5- carry out marketing campaigns/strategies -> increase sales
what are the advantages of having a clear objectives?
1- avoid confusion
> employees have clear direction of business
> increase productivity
> increase efficiency
2- lead employees properly
> put in right efforts into business
3- communicate with investors
> when asked: what is your business?
> give confidence to your investors to invest in your business
what are the types of objectives? (4)
1- profit maximisation
> make as much profits as possible
> increased sales
> more $ to allocate as financial reward (form of dividends & bonuses)
> workers are satisfied, improve standard of living
2- sales growth
> make as much sales as possible
> increased market share
> increased business’s bargaining power from suppplier (get more discounts)
> sell products at lower prices, attract customers
> maximise profits
3- survival
> short term goal, to sustain business long term
> survival = continuity of business
> must introduce effective marketing strategies (discounts, loyalty cards & advertising)
4- CSR
> business that runs its operations ethically and responsibly
> improve public image
> attract like-minded customers - stay loyal to business
what does SMART mean?
S: specific- business states clearly what they are trying to achieve
M: measurable- put a value to the objective, then decide if the objective has been achieved
A: agreed- gain the approval & understanding of everyone involved
R: realistic- challenging but able to be achieved, take into account the company’s resources
T: time specific- time limit when they should achieve
what are the advantages of private limited company?
1- shareholders have limited liability
> low risk of investment
> attract investors
2- raise capital by sharing shares to friends, family & employees
> more capital
> improve business liquidity
> reduce risk of gearing
> won’t experience solvency issues.
what are the disadvantages of private limited company?
1- a lot of legal work to form a company
> need to fill in forms and submit relevant documents
> receive register in SSM to start business
2- less secrecy over financial affairs (compared to partnership & sole trader)
> competitors will use business’s financial statement as a benchmark
> competitors introduced aggressive strategies to eliminate business eg: price war
what are the advantages of public limited company?
1- limited liability
> shareholders have less risk
> not personally liable for any loss of business if unable to pay back debts
2- large capital cuz sell shares to the public
> anyone from the public that’s interested can purchase the company’s share
> more capital
> effective added value management methods can be introduced
what are the disadvantages of public limited company?
1- share prices subject to change
> prices may fluctuate according to performance of the business
> confidence of shareholders will be reduced
> reduced/stop investing
> reduced capital
2- risk of takeover
> due to availability of shares on stock exchange
> other individual takeover
> introduce new business structure
> employees may not cope
> higher turn over rate
what are the advantages of franchise?
1- franchisee is given support by franchise
> eg: marketing support & staff training
> franchisee can do thorough market research
> sensitive to market trends
> cater to local taste
> franchise can carry out more competitive business strategies
> satisfy customers needs
2- benefit from national advertising
> advertising can influence consumer’s purchasing behaviour and decisions
> attract customers to purchase product
what are the disadvantages of franchise?
1- expensive to purchase franchise
> need huge amount of capital (franchise fee)
> will increase business debt and risk of not being able to pay back
2- less flexible
> need to follow franchise model
> owner less motivated to expand business size
what are the impacts of business towards the economy?
1- overall economic growth
> more entrepreneur running business in the market
> produce more goods and services
> require man power
> increased job opportunities
> have income
> higher standard of living
2- increased competition and choices for consumer
> creation of new goods
> satisfy customers needs and wants
> gain competitive edge in market
> gain brand recognition
> retain customer base
> encourages innovative & creative products
> promotes competition
> produce higher quality products
3- contribute to public finances
> when business generate profits
> income is taxable by gov (VAT, GST, SST)
> gov has more capital
> allocate $ to improve country’s infrastructure
> increased standard of living
4- export earnings
> when business not only trade in domestic market but globally
> earn foreign exchange
> strengthen own country’s currency
what is the importance of profit?
1- survival of business
2- expand business venture
3- reinvest in R&D
4- increased maket share value
5- increased standard of living
what is the function of business?
- production
- marketing
- finance
- administration
- human resources
what is the importance of cash flow (5)
- survival of business
- pay wages, utilities bill
- pay supplier, repurchase inventory
- cover for immediate expenses/contingency plan
- reduce business gearing ratio
