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Business > External Influences > Flashcards

External Influences Flashcards

1
Q

Competition

A

Rivalry between businesses who are similar

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2
Q

Market

A

Buyers and sellers come in contact in order to establish a price

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3
Q

Market price

A

The price range in a market which consumers are prepared to pay

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4
Q

Mark up

A

Difference between the cost of producing an item and the price at which it is sold

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5
Q

Competitive market

A

Market with lots of sellars in

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6
Q

Monopoly

A

A market dominated by 1 seller

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7
Q

Economies of scale

A

The arise when unit costs fall as output prices

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8
Q

Oligopoly

A

Market is dominated by a few firms

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9
Q

Monopolictic competition

A

Non price differences. There are lots of businesses,lots of similar branded products

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10
Q

What % of the market share do firms need to be a monopoly

A

25%

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11
Q

Name 3 key features of monopolistic competition

A

Lots of firms
Low prices
Advantage over another

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12
Q

market size

A

Number of individuals in a market who are potential buyers of a product

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13
Q

Market growth

A

Increase in demand for a business product

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14
Q

Market share

A

The share of the trade market that is owned by a business

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15
Q

Name 6 strategies to increase market share

A 
Clear market plan
Pricing
Merge with a competitor 
Beware of customer needs 
Sell to existing customers
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16
Q

Market dominance

A

The measure of strength of a business and its products relative to competition

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17
Q

Barrier to entry

A

Factors which could prevent a firm from entering a market

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18
Q

Name 5 barriers to entry

A

Large start up costs
Breaking customer loyalty
Inability to gain economies of scale
Legal restrictions e.g patents

19
Q

Barriers to exit

A

Factors that could prevent a firm from leaving a market

20
Q

Name 3 barriers to exit

A

Selling off capital stock
High redundancy costs
Contracts with suppliers

21
Q

Stake holder

A

A group who are interested in a business

22
Q

Merger

A

This is when a company joins together to form a new larger business

23
Q

Acquisition

A

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

24
Q

Name 5 advantage of merging/ acquisition

A 
Greater reach throughout area. 
Expands commercial sectors
Acquire new skills
Eliminate competition 
Increase market share
25
Q

Name 4 disadvantages to merging/acquisition

A

High costs
Upset customers/supplier
Problems with intergration
Questionable motifs

26
Q

Demand

A

The amount of good that a customer is willing to buy at any given price

27
Q

Supply

A

The amount of good that sellers are willing to sell at any given price

28
Q

Equilibrium

A

The situation in a market where demand is equal to supply

29
Q

What happens if there’s excess demand in a market

A

Supply+price would increase because more people are wanting the product

30
Q

What happens if there excess supply on the market

A

Supply+price would decrease because people aren’t buying it

31
Q

Elasticity of demand?

A

Measures how sensitive quantity demanded is to change in price

32
Q

Inelastic demand?example

A

Quantity is insensitive to a change in price e.g petrol

33
Q

Elastic demand

A

Quantity is sensitive to a change in price

34
Q

Globalisation

A

Lots of counties trading in each others market

35
Q

5 reasons to why products are imported

A 
Cheap labour
Cost of production is cheaper
Cheap resources
Reduced trade restrictions 
Better infrastructure
36
Q

What facilitates globalisation

A

Technology

Easy movement of people/money

37
Q

Multinationals

A

A company that is based in one country and manufacturs and sells in a variety of countries

38
Q

Why should companies be multinationals

A

Economies of scale
Ability to take advantage of lack of legal constraints
New markets- less competition
Take advantage of low wager

39
Q

Name 3advantages to being a multinational for the country

A

Jobs available in LEDC’s
Developed skills in LEDC’s
Infrastructure

40
Q

Name 3disadvantages of becoming a multinational for the country

A

Jobs low in skill- isn’t positive future
Wages are low
Unsafe working conditions

41
Q

What’s an emerging market

A

Refer to developing countries that are achieving rapid growth and industrialisation

42
Q

What are the opportunities to emerging markets

A

High disposable income

Investments

43
Q

What are the threats to becoming an emerging market

A

Low labour costs

Greater independence from emerging economies

Business (5 decks)

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