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N5 Business > Exam content > Flashcards

Exam content Flashcards

1
Q

Sectors of economy

A

Private, public, third

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2
Q

Private sector of economy definition

A

The sector of economy made up of businesses which are owned and controlled by private individuals which want to maximise profit and grow the business.

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3
Q

Public sector definition

A

The sector of economy which is made up of non profit businesses which are owned and controlled by the government and have the goal of providing a high quality service to the public.

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4
Q

Third sector of economy definition

A

The sector of economy made up of non profit organisations which want to develop the community and help raise funding and awareness for ethical causes.

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5
Q

Private sector goals

A

Maximise profit
Grow the business
Good corporate social responsibility
High customer satisfaction

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6
Q

Types of private sector businesses

A

Sole trader,
Partnership,
Private limited company

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7
Q

Public sector goals

A

Provide high quality service
Good corporate social responsibility
Stay within allocated spending budget

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8
Q

Third sector business goals

A

Increase awareness of a cause
Increase funding for a cause
Develop the local community

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9
Q

Types of third sector business

A

Charity
Social enterprise
Voluntary organisations

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10
Q

Sole trader features

A

Private sector of economy
Unlimited liability
One owner and one controller
No legal work needed for setup

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11
Q

Partnership features

A

Private sector
Unlimited liability
2-20 owners and controllers
Needs a deed of partnership for setup

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12
Q

Private limited company features

A 
Private sector of economy 
Owned by shareholders 
Controlled by directors 
Limited liability 
Memorandum and article of association necessary for setup.
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13
Q

Government organisations features

A

Owned by the government
Controlled by the government
Financed through taxes and budget
Public sector of economy

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14
Q

Social enterprise feature

A

A business in the third sector of economy
Functions like a private sector business
Owned by private individuals
Controlled by the owners
Has to invest half of profit to ethical causes
Other half of profit has to go into growing the business
Profit doesn’t reward owners.

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15
Q

Charity features

A

Third sector of economy
Owned and controlled by a trust
Non profit
Goal of raising funds and awareness

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16
Q

Voluntary organisations features

A

Controlled by board members
Third sector of economy
Purpose of developing the community

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17
Q

Private sector business objective

A 
Maximise profit 
Maximise sales 
Maximise market share 
Good CSR
Grow the business
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18
Q

Public sector business goals

A

Provide high quality service to the public
Good CSR
Stay within budget

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19
Q

Third sector business goals

A

Maximise awareness and funds through profit/donations

Help develop community

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20
Q

External factors definition

A

Factors outside of a business which affect the success of the business.

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21
Q

External factors types

A 
Political 
Economic 
Social 
Technological 
Environmental 
Competitive 
PESTEC
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22
Q

Political external factor explain

A

An example of a political external factor is an introduction of new legislation. New legislation can lead to a business spending extra time training staff to abide to these laws, therefore this can lead to a decrease in productivity.

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23
Q

Economic external factor explain

A

An example of an economic external factor is a boom . This is an increase in gross domestic product which will make the income of the public more disposable, therefore this can lead to an increase of sales in the business.

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24
Q

Social factor explain

A

An example of a social factor is a change in tastes and trends. This will lead to products going out of fashion and the business having to do market research to make their products appealing to their target market.

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25
Q

Technological external factors explain

A

An example of a technological factor is new machinery. New machinery can allow for the product to be produced faster and more cost effectively. Therefore this will lead to an increase of productivity or profit.

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26
Q

Environmental factors explain

A

An example of an environmental factor is plastic use. If a business uses a lot of plastic that isn’t recyclable in its products this will lead to a decrease of corporate social responsibility because the business is harming the environment.

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27
Q

Competitive external factor explain

A

An example of a competitive factor is competitor price drops. This can lead to a decrease of market share as the competition will steal customers away from your business and a decrease in market share.

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28
Q

Examples of political factors

A 
Legislation 
Income tax change 
Corporation tax change 
VAT change
Brexit
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29
Q

Examples of economic factors

A 
Boom 
Recession 
Tariffs 
Interest rates 
Exchange rates
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30
Q

Social factors

A

Tastes and trends
Life expectancy
More awareness about ethics

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31
Q

Technological factors

A

New medical research
New machinery and equipment
E commerce

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32
Q

Environmental factors

A

Plastic use
Weather
Pollution / carbon footprint

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33
Q

Competitive factors

A

Competitor price drops

Competitor new products

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34
Q

Stakeholders examples

A 
Owners 
Shareholders 
Employees
Banks 
Customers 
Suppliers 
Local community 
Local government 
National government
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35
Q

Internal stakeholders definition

A

An internal stakeholder is anyone who has an interest in the success of the business inside the business.

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36
Q

External stakeholders definition

A

Anyone who has an interest in the success of the business outside of the business

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37
Q

Internal stakeholders examples

A 
Owners 
Managers 
Employees 
Shareholders 
Directors
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38
Q

External stakeholders examples

A 
Customers 
Local community 
Government 
Banks
Suppliers
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39
Q

Types of market research

A

Field and desk

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40
Q

Methods of field research

A 
Online survey 
Postal survey 
Face to face interview 
Hall tests 
Focus groups
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41
Q

Methods of desk research

A

Newspapers
Books/textbooks
Government statistics
Websites

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42
Q

Field research definition

A

Where a business goes and collects primary information for a specific purpose by carrying out their own research.

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43
Q

Desk research definition

A

Where a business uses existing sources to gather secondary information about the market or product.

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44
Q

Advantages of field research

A

Not available to competition
More relevant
Up to date

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45
Q

Disadvantages of field research

A

Still can be unreliable
More expensive than desk
More time consuming than desk
Needs trained professionals

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46
Q

Advantages of desk research

A

Cheaper than field
Quicker than field
Doesn’t need trained professionals
Large quantities can be gathered

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47
Q

Disadvantages of desk

A 
Can be: 
difficult to interpret 
Out of date 
Irrelevant 
Available to competitors
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48
Q

Market research advantages

A

Gather feedback on how to improve products
Gather info on the marketing mix of a product
Find out if there is a demand for a product

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49
Q

Market research disadvantages

A

Expensive and wastes time
Could be inaccurate
Could lead to bad business decisions

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50
Q

Product development stages

A 
Generate the idea 
Analyse the idea 
Produce the prototype 
Test the market
Alter the product 
Produce the product
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51
Q

Generate the idea

A

Where the business comes up with the idea of the product that will be sold to customers

52
Q

Analyse the idea

A

The stage where the business looks to see if the product is possible, checks for existing products, competitors and to see if it is legal.

53
Q

Produce the prototype

A

Where the business manufactures a one off product to see what it looks like, test it’s safety and its performance.

54
Q

Test the market

A

Where the business carries out market research to ensure the public have a demand for the product and for constructive criticism to make the product better.

55
Q

Alter the product

A

Where the product is altered based on feedback from the public to make the product more appealing to the public.

56
Q

Alter the product

A

Where the product is altered based on feedback from the market research to make the product more appealing to the public.

57
Q

Produce the product

A

This is where the first units of products are manufactured to be sold to the public.

58
Q

Branding definition

A

Where a recognisable character is given to a business /product or product ranges to make them stand out form competitors.

59
Q

Branding definition

A

Where a recognisable character is given to a business /product or product ranges to make them stand out form competitors.

60
Q

Advantages of Branding

A 
More memorable 
Higher quality 
Stand out from competition 
Increase sales 
Can release new products without great risk.
61
Q

Disadvantages of branding

A

Expensive to maintain
Bad publicity can tarnish entire product ranges
Failed products can tarnish entire product ranges

62
Q

Packaging advantages

A

Protects the product
Can be branded
Gives extra necessary information

63
Q

Disadvantages of packaging

A

Can be bad for the environment
Has to show contents of product for food so can off put customers
Leads to bad CSR

64
Q

Pricing strategies

A 
Premium 
Low 
Cost plus 
Competitive 
Promotional
65
Q

Promotional pricing definition

A

Where the business uses sales promotional strategies like discounts on products to pressure customers into buying the product.

66
Q

Cost plus pricing definition

A

Where the business adds a markup cost to the manufacturing cost to get their final product price so they know exactly how much gross profit they are making per sale.

67
Q

Competitive pricing definition

A

Where the business equals their competition’s product prices in hopes of stealing their loyal customers away from them, if successful this can increase market share but a better marketing mix is necessary for this to work.

68
Q

Premium pricing

A

Where the business charges more money for their product to give it an image of being of higher quality.

69
Q

Low pricing

A

Where the business charges as little as possible for their production hopes of maximising sales.

70
Q

Methods of advertising

A 
TV
Social media 
Radio 
Billboards 
Apps
Celebrity endorsement
Newspapers
71
Q

Tv advantages

A

Can show the product to the audience and reaches across countries or worldwide

72
Q

Social media advantages

A

Reaches younger generations and worldwide audience

73
Q

Radio advantages

A

Target the local community or nationally and allows for jingles and slogans to be played.

74
Q

Billboards advantages

A

Can attract a lot of attention in populated areas

Can show logos

75
Q

Apps advantages

A

Targets specific types of consumers in the market and broadcast worldwide

76
Q

Disadvantages of tv

A

Extremely expensive

77
Q

Disadvantages of social media

A

Restricts older generations and ads disrupt and annoy consumers

78
Q

Billboards disadvantages

A

Only works in populated areas, can’t use a jingle to make the product memorable.

79
Q

Apps disadvantages

A

Disrupting and irritating

80
Q

Advertising definition

A

Where a business uses media to promote and inform the public about a product.

81
Q

Factors to consider when choosing a location

A 
Size of property 
Population of the local area 
Cost of the property 
Distance from target market 
Distance from supplier 
Government incentives
Distance from competitors
82
Q

Technology in marketing examples

A 
Website 
Database 
Desktop publisher 
Email 
Online survey
Social media
83
Q

Websites (TM)

A

Allows for information about products to be distributed to customers and also allows for e - commerce

84
Q

Database (TM)

A

Store customer information

Store market research documents

85
Q

Desktop publisher TM

A

Creates posters and billboards for advertising

86
Q

Email TM

A

Used to contact customers to inform them about promotional deals

87
Q

Social media TM

A

Advertise the product and promote the business

Generate CSR by showing ethical activities

88
Q

Factors affecting suppliers

A 
Price 
Quality 
Distance 
Lead time 
Reliability 
Credit terms and economies of scale
89
Q

Inventory management types

A

Computerised and manual

90
Q

Computerised inventory control

A

Where the business uses a computer to manage and keep track of the inventory level in the business

91
Q

Manual inventory control

A

Where a business uses staff to update and manage the level of inventory in the business.

92
Q

Advantages of computerised stock control

A

More secure than manual
Costs less than hiring an employee in the long run
More accurate than manual due to no human error
automatically contacts supplier

93
Q

Disadvantages of computerised stock control

A

Glitches or power cuts can cause the system to crash or could lose information on inventory level.
High capital start up cost means it isn’t available to small businesses

94
Q

Advantages of manual inventory control

A

Has a low start up cost
Good for businesses that don’t sell large numbers of units
Doesn’t shut down with glitches and power cuts

95
Q

Disadvantages of manual stock control

A

Less accurate (more human error) than computerised
Less secure than computerised
Someone needs to contact supplier
Costs more in the long run than computerised

95
Q

Disadvantages of manual stock control

A

Less accurate (more human error) than computerised
Less secure than computerised
Someone needs to contact supplier
Costs more in the long run than computerised

96
Q

Methods of production

A

Job
Batch
Flow

97
Q

Job production definition

A

Where a business receives an order from a customer and an employee/ employees will manufacture the product from start to finish with the customers exact requirements and needs being fulfilled.

98
Q

Advantages of job production

A

Customisable
Seen as higher quality
Can charge a higher price
Labour intensive so no large startup cost

99
Q

Disadvantages of job production

A

Labour intensive so needs skilled workers
Can’t manufacture the product quickly
Likely to be human error
No economies of scale or bulk buying

100
Q

Batch production definition

A

Where a business manufactures their products in groups, the products within each group are identical but the groups have slight differences.

101
Q

Advantages of batch production

A 
Can be capital or Labour intensive 
Can produce a variety of different products quickly 
Raw materials can get scales of economy
Batches are identical
Faster than job production
102
Q

Disadvantages of batch production

A

Slower than flow production
Workers can be idle in between batches
Mistakes ruin entire batches
Not completely customisable like job .

103
Q

Flow production definition

A

Where a business manufactures their product on a capital intensive production line, where components are added to the product. Each product is standardised and identical with very little customisable potential.

104
Q

Advantages of flow

A 
Capital intensive so no human error 
Good economies of scales 
Works 24/7
Standardised products 
Low wages due to low skill levels
105
Q

Disadvantages of flow

A

Can’t customise the product
The entire production line can stop if one machine breaks down
Demotivated staff
High startup cost prevents small businesses utilising this method

106
Q

Ethical operation definition

A

Where a business ensures that the manufacturing and transport of their product don’t negatively impact on the environment or on the welfare of people and animals and the community

107
Q

Advantages of ethical operations

A

Good CSR
Attracts good employees
Marketing strategy

108
Q

Disadvantages of ethical operations

A

Makes the product more expensive to manufacture

Lose access to inethical suppliers making it difficult to get raw materials

109
Q

Methods of quality endurance

A

Quality control
Quality assurance
Quality training
High quality raw materials

110
Q

Quality control

A

Where a business checks the standards of the product at the end of production to save time

111
Q

Quality assurance

A

Where the business checks the standard of the product at the end of each stage of production to decrease waste.

112
Q

Quality training

A

Where a business teaches their staff to complete their tasks to a higher standard, faster and with less mistakes

113
Q

High quality raw materials

A

Where a business uses a high standard of supplier and only the best raw materials to ensure the final product is a higher standard.

114
Q

Recruitment stages

A 
Identify job vacancy 
Analyse job vacancy 
Create a job description 
Create a person specification 
Advertise the vacancy 
Send out applications /ask for CV’s
115
Q

Selection stages

A

Take in applications
Create a shortlist
Refine the selection
Appoint the most suitable candidate

116
Q

Technology in HR

A 
Video conferencing 
Email 
Websites 
Social media 
Database 
word
117
Q

Word HRT

A

Used to make HR documents such as contract of employment, job description and person specification

118
Q

Email HRT

A

Used to send out applications in recruitment

119
Q

Websites HRT

A

Used to advertise the job vacancy in the recruitment stage

120
Q

Databases HRT

A

Databases can be used to store important employee information and important employee documents such as a contract of employment securely.

121
Q

Video conferencing HRT

A

Used in HR to quickly set up meetings between branches allowing for quicker meetings to be held and employees to have the chance to work from home.

122
Q

Sources of finance

A 
Bank loan 
Mortgage 
Own equity
Share issue 
Government grant 
Bank overdraft 
Taking on an additional partner
123
Q

Cash budget features

A 
Opening balance 
Receipts 
Total cash available 
Payments 
Total payments 
Closing balance
124
Q

Income statements features

A 
Sales revenue 
Less: cost of sales 
Opening stock 
Closing stock 
Gross profit 
Expenses 
Total expenses 
Profit for the year

N5 Business (6 decks)

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