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Business Alevel > External Influences > Flashcards

External Influences Flashcards

1
Q

What is a competitive market?

A

A market in which there are a large number of firms producing a similar product or service.
Only compete on price, identical products

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2
Q

What’s competition?

A

Rivalry amongst sellers to gain more market share

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3
Q

What’s market share?

A

% of total sales in a industry generated by a particular company

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4
Q

Advantages of physical markets for the consumer?

A
  • Personalised experience get to try things on
  • buy it and take it home straight away
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5
Q

Disadvantages of a physical market for the consumer?

A
  • opening time
  • location
  • stock only available in store
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6
Q

Advantages of a non-physical market for the consumer?

A
  • easy and accessible
  • next day delivery
  • all shops available
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7
Q

Disadvantages of non physical markets for the consumer?

A
  • shipping fees
  • can’t try things on
  • scams
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8
Q

Advantages of a physical market for the business?

A
  • displays
  • face to face selling
  • attract older generation
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9
Q

Disadvantages of a physical for the business?

A
  • rent
  • security
  • employees
  • location
  • day to day running
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10
Q

advantages of a nonphysical for the business?

A
  • easy to upload online
  • cheaper to maintain
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11
Q

Disadvantages of non physical for the business?

A
  • cheaper to maintain
  • stock issues vs demand
  • high return rates
  • visibility
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12
Q

What are the barriers to entry?

A

Cost
Regulations
Loyalty
Technology
Land/location

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13
Q

What is a monopoly?

A

A market dominated by one seller
(Must have 25% to be a monopoly)

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14
Q

What is the economies of scale?

A

The cost per unit of production decreases as volume of product increases

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15
Q

What is the mark up?

A

Is the difference between the cost and price

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16
Q

What is an Oligopoly?

A

Where a market is dominated by a few firms
- some ability over price
- many barriers to entry
- some product differentiation

17
Q

What is a monopolistic competition?

A

A market structure with many competing firms each of whom supplies a slightly differentiated product
- few barriers to entry
- limited ability over price

18
Q

What is market growth?

A

The % change in the size of the market, measured over a specific period

19
Q

What is market size?

A

Is expressed as the collective value of the goods/services that buyers purchase

20
Q

What is market power?

A

The ability of a firm to influence or control the terms and conditions on which goods are brought and sold

21
Q

What is market dominance?

A

A measure of market share compared to competitors

22
Q

What are barriers to exit?

A
  • difficulty of selling assets/capital
  • high redundancy
  • contracts with suppliers ( legal challenge if not honoured)
  • leases with landlords
23
Q

What’s an acquisition/ takeover?

A

Where control of another company is achieved by buying majority of its shares

24
Q

What is a merger?

A

This is where 2 companies join together to form a new larger business

25
Q

Benefits of external growth?

A
  • gain new management with different skills
  • result in increase in revenue and therefore market share
  • May be able to meet customers needs more efficiently with combination of resources
  • May experience economies of scale
26
Q

What is Organic growth/ internal

A

Involves expansion from within a business

27
Q

Advantages of organic growth?

A
  • Helps build strong, sustainable foundation
  • loyal customers
  • reduces any risks associated with mergers/takeovers
  • maintain full control
  • strong employee engagement
28
Q

Disadvantages of organic growth?

A
  • slower
    -puts strain on internal resources
  • time consuming and a ton of effort
29
Q

Examples of organic growth?

A

Open new stores
Launch new products
Employ new workers
Increase productivity capacity
Investing in new technologies

30
Q

What’s CMA?

A

Competition and markets authority

31
Q

Factors of demand?

A

Income and price

32
Q

Which way does the demand curve shift due to an increase in demand?

A

Right

33
Q

What is meant by an increase in demand?

A

Greater quantity demanded at the same price

34
Q

Which way does the demand curve shift due to a decrease in demand?

A

Left

35
Q

The point where demand and supply meet on a graph is called?

A

Equilibrium

36
Q

Oligopolistic market features

A

Few large firms dominate
Some ability to control price
Many barrier to entry
Some product differences

37
Q

What’s the CMA

A

Competition and markets authority
Responsible for strengthening business competition and preventing and reducing anticompetitive activities

38
Q

Ways the CPA help

A

Price fixing
Stop merging

Business Alevel (3 decks)

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