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Business > External Influences > Flashcards

External Influences Flashcards

1
Q

Define Competition

A

Rivalry amongst sellers.

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2
Q

Define Market

A

Anywhere where buyers and sellers come into contact.

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3
Q

Define Mark Up

A

The difference between the cost of producing an item and the price at which it’s sold.

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4
Q

Define Competitive Market

A

A market in which there are many sellers; competition is mainly price based.

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5
Q

Define Monopoly

A

A market dominated by one seller, usually with a market share of over 25%.

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6
Q

Features of a Competitive Market

A
  • many firms

- a range of low prices

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7
Q

Features of a Monopoly

A
  • one firm dominating

- high prices (usually)

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8
Q

Define Oligopoly

A

Where a market is dominated by a few firms (e.g. phone companies).

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9
Q

Features of an Oligopoly

A
  • products and prices are similar

- competition based on non price differences

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10
Q

Define Collusion

A

When rival companies cooperate for a mutual benefit, preventing fair competition.

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11
Q

Define Anti-competitiveness

A

When a business does something to prevent fair competition within the market.

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12
Q

Define Monopolistic Competition

A

A market structure with many competing firms who sell slightly differentiated products.

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13
Q

Features of a Monopolistic Market

A
  • few different firms
  • similar but low prices
  • e.g. taxi drivers or hair salons
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14
Q

Define Market Size

A

The number of individuals in a a,fleet who are potential buyers of a good/ service.

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15
Q

Define Market Growth

A

The percentage growth in the size of the market, measured over a specific period of time.

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16
Q

Define Market Share

A

The share of the total market that is owned by a particular business.

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17
Q

Define Market Dominance

A

A measure of market compared to competitors.

18
Q

Define Market Power

A

Ability of a firm to influence or control the Way goods are bought and sold.

19
Q

Define Market Share

A

Percentage of total sales a business has in a specific market.

20
Q

How to Increase Market Share

A
  • be aware of customer needs and meet them
  • sell more to existing customers
  • have a clear market plan
  • merge with competitor
21
Q

Define Barriers to Entry

A

Factors that could prevent a firm from entering the market.

22
Q

Examples of Barriers to Entry

A
  • large set up costs
  • inability to gain EOS
  • legal restrictions
  • existing businesses may start a price war
23
Q

Define Barriers to Exit

A

Factors that could prevent a business from leaving a market.

24
Q

Examples of Barriers to Exit

A
  • difficult to sell capital
  • high redundancy costs
  • contracts with suppliers
25
Q

Define CMA (competitions and markets authority)

A

A regulatory company that can stop mergers and takeovers happening.

26
Q

What sanctions can CMA apply?

A
  • fined up to 10% of their global turnover

- customers can sue for damages as a result of anti-competitive behaviours

27
Q

Define Demand

A

The amount of goods a customer is willing and able to buy.

28
Q

Define Supply

A

The amount of goods a seller is willing and able to sell at any given time.

29
Q

Define Equilibrium Price

A

A situation in the market where demand equals supply.

30
Q

Define Subsidy

A

Payment from government for every unit supplied.

31
Q

Define Price Elasticity

A

How sensitive quantity demanded is to a change in price.

32
Q

Define Elastic Demand

A

Quantity demanded is sensitive to a change in price.

33
Q

Define Inelastic Demand

A

Quantity demanded isn’t sensitive to a change in demand.

34
Q

Define Excess Supply

A

If price is set too high, excess supply is created.

35
Q

Define Excess Demand

A

When the price is set below the equilibrium price.

36
Q

Define Globalisation

A

The increased integration and interdependence of national economies.

37
Q

Advantages of Globalisation

A
  • brings investment, jobs and training

- news and ideas can be spread quickly

38
Q

Disadvantages of Globalisation

A
  • mostly seen in developed countries

- jobs may be lost to Less Developed Countries (LDC)

39
Q

Advantages of being Multinational

A
  • employment opportunities in LEDC’s
  • equips these people with skills
  • investment in infrastructure
  • Utilisation of local resources to supply factories
40
Q

Disadvantages of being Multinational

A
  • use of child labour
  • very low wages
  • unskilled work so won’t help get out of poverty
  • local businesses forced out
41
Q

Define Global Strategy

A

Where businesses consider how to build a competitive global advantage.

42
Q

Define Global Brand

A

Brand recognised throughout the world.

Business (7 decks)

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