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business a level > external influence > Flashcards

external influence Flashcards

1
Q

competitive market

A

large number of firms, produce similar products. large market size. competition based on price.

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2
Q

monopoly market

A

only one provider of product, firm can control the market. usually illegal

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3
Q

monopolistic competition

A

large number of firms, large market. do not compete on price. usually branded items

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4
Q

oligopoly

A

dominated by few large firms, smaller businesses follow. illegal to price match. same amount of cust but less revenue if spread

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5
Q

market

A

any situation where buyers/sellers are in contact in order to establish a price

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6
Q

physical market

A

face to face. + fewer returns, get products as soon as purchase. - higher costs/ overheads as store is expensive, time consuming to go there

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7
Q

non-physical market (+/-)

A

online/ digital. + cheaper as lass overheads, 24h service, less staff needed. - more returns, not same experience, worse customer service, pass-word sharing

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8
Q

benefits of competition

A

forces business to keep costs low and prices down for customers. encourages innovation. emphasis on meeting customer needs

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9
Q

drawbacks of competition

A

small business don’t get economies of scale- struggle to grow. cutting costs may mean lower wages/ redundancy. dividends cut.

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10
Q

impacts of competition on local scale

A

more footfall(+) may need to decrease prices(-).

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11
Q

impacts of competition on national scale

A

may insight them to improve quality(+) wide product portfolio may not have same overall quality(-)

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12
Q

impacts of competition on global scale

A

pushed to be innovative(+) other competitors may be more time efficient with shipping(-)

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13
Q

barriers of entry into the market

A

large start up cost, matching marketing budgets will be hard, cannot gain economies of scale, price wars

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14
Q

barriers to exiting the market

A

difficult to sell off expenses, high redundancy costs, contracts with suppliers

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15
Q

market dominance

A

when a business has over 50% of shares in the market

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16
Q

mergers

A

a type of inorganic growth by the fusion of two companies to expand

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17
Q

acquisitions

A

when another business buys a business

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18
Q

organic growth

A

using your own resources to grow

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19
Q

how is dominance restricted in the UK

A

abuses of market power and regulated by a competition act

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20
Q

globalisation

A

the increase in interconnectivity in companies and governments worldwide

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21
Q

determinants of demand

A

product/ service price
buyers income
prices of substitutes
consumer preference
expectation for change in price

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22
Q

determinants of supply

A

changes in production cost
climate conditions

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23
Q

global strategy

A

focuses of global standard and treats the world as one unit

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24
Q

opportunities of globalisation

A

more connections
efficient transport of goods
increased trade
form better connections with other countries
LEDC’s experience growth
more customers

25
Q

threats of globalisation

A

increased competition
unemployment in developed countries that move businesses overseas

26
Q

global branding

A

one recognised brand that is around the whole world

27
Q

international trade

A

the trade of capital, goods, and services across the borders of different countries. this is good - adds variety, economic efficiency, specialisation

28
Q

barriers to international trade - quotas

A

number of goods you can allow to be imported from different countries

29
Q

barriers to trade - tariffs

A

tax on goods that are imported

30
Q

factors to consider when trading internationally

A

tailor to the language
understanding different cultures
legal requirements
transport logistics
currency/ exchange rates

31
Q

exchange rate

A

the change in currency of money and how much a currency is worth. the bank of england will set and buy currencies to prevent damaging exchange rates. too high = sell pounds. too low = buy pounds
eg) £1 = 20 lira

32
Q

formula for exchange rate

A

£1.50 = $1

£150 = $100

33
Q

equilibrium

A

state at which market supply and demand balance each-other out

34
Q

outward shift in demand

A

to the right.
more is demanded at each price level
caused by higher income levels

35
Q

inward shift in demand

A

decrease in demand.
to the left.
less demand at each price level

36
Q

outward shift in supply

A

to the right.
make more supply.
caused by producer costs falling so they can make more
supply is how much they make

37
Q

inward shift in supply

A

shifts left
decrease in supply
caused by increased price on raw materials

38
Q

pros of multinationals

A

incoming company bring in investment, jobs, and trading
news/ideas spread quickly
increased consumer choice
improved quality of life foe ledc

39
Q

cons of multinationals

A

benefits felt by developed countries
lack of legal framework
loss of jobs in developed countries

40
Q

multinational strategies

A

responsive to different regions by differentiating to suit customers in that area.

41
Q

political factors

A

decisions made by the govt that affect businesses

42
Q

political uncertainty

A

impacts how a business conducts themselves and how attractive a country is to trade with.

43
Q

fiscal policies

A

government spending and taxes

44
Q

CMA

A

stop market dominance,mergers,takeovers et

45
Q

privatisation

A

taking a business out of the public sector ownership

46
Q

trade bloc

A

a group of countries within and geographical region to protect from imports outside of the union - e.g. EU
eliminating trade barriers

47
Q

single market

A

where a group of countries trade all resources freely within a common set of regulations.

48
Q

pros of single market/trade blocs

A

free trade - no taxes on goods.
cheaper products
more choice for consumers.
can help protect local businesses - widen their target market
economies of scale / access to money from foreign banks

49
Q

cons of single market/trade blocs

A

govt miss out of money they could get from tax goods
may hinder trade from countries not in the bloc
easy for domestic firms to be taken over by foreign countries
must abide by all the rules in the trade bloc

50
Q

hot money

A

money flowing through countries and currencies to find the best interest rates to make the most money.
if the b.o.e wants exchange rates to rise they could put up interest rates.

51
Q

analysis of fall in exchange rates - cheaper exports

A

cheaper to export goods and people will pay more for them if their currency is worth more then ours > this depends on where the majority of sales are coming from. either outside or in.

52
Q

analysis of fall in exchange rates - imports

A

if business imports raw materials it means production tends to be more expensive > due to al fall in exchange rates however it depends if this is temporary or not if it’ll have a big impact. may lead to the reduction in the amount of imported raw materials

53
Q

spiced

A

stronger pounds - import cheaper, exports dearer

54
Q

GDP

A

amount of money spent. a measure of the economy as a whole

55
Q

inflation

A

sustained rise in general price level

56
Q

deflation

A

a fall in general price level. value of money up.

57
Q

disinflation

A

price up more slowly than in the past.

58
Q

SPICED

A

stronger pound imports cheaper exports dearer

business a level (7 decks)

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