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A Business Studies Complete Overview of Specification > External influences > Flashcards

External influences Flashcards

1
Q

What is a competitive market?

A

A market in which a large number of producers actively compete with each other to satisfy the wants and needs of a large number of consumers. In practice, however they are in different degrees of competition.

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2
Q

What are examples of physical markets?

A
  • Stalls at a market

- Shopping center

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3
Q

Define a non physical market?

A

Market sellers compete with each other but do not meet or interact physically with buyers at all

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4
Q

State types of non physical markets?

A
  • foreign currency market

- ebay

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5
Q

Advantage of non physical markets?

A
  • Customers can compare (prices, features etc.)
  • Can buy and deliver to their home (convenience)
  • Sellers can gain information and process data about customers buying habits so to better their production line and supply chain and advertise.
  • Sellers can operate cheaply from one or two locations and work a successful business.
  • Can buy products from abroad
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6
Q

Advantages of physical markets?

A
  • better customer attention/ customer service with access to information (this service comes at the cost of a higher product price.)
  • Customers can view the product in the flesh and consider quality, fit etc.
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7
Q

Define me tailing?

A

Products that are custom created by the user online. For example, using predefined templates, users can create their own business cards on a Web site.

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8
Q

Define a market

A

Any situation where buyers and sellers are in contact in order to establish a price

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9
Q

What is a monopoly

A

A market controlled by a single business with over 25% market share (opposite of a competitive market.)

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10
Q

What is predatory pricing?

A

Is a pricing strategy in which a product or service is set at a very low price with the intention to drive competitors out of the market or creating barriers to entry for potential new competitors.

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11
Q

What is monopolistic competition?

A

A large number of consumers with a large number of business each essentially the same products creating non-price competition; branded then promoted by the company.

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12
Q

What is an oligopoly?

A

A market dominated by a few large firms with many other, smaller businesses who follow the lead of the oligopolists in terms of price and products.

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13
Q

What illegal behavior do some oligopolists conduct?

A

Secret agreements to keep prices higher so that the smaller businesses lose revenue

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14
Q

Examples of oligopolies

A
  • Energy and gas companies

- Airlines

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15
Q

Define ‘Market size’

A

The number of individuals in a certain market who are potential/sellers of a product/ service

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16
Q

Why is it important that a business should have an accurate idea of their market size?

A

To plan the launch of a new product

  • Small businesses will not sell a large volume
  • A large market would have more potential sales but more competition
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17
Q

Define ‘Market Growth’

A

An increase in the demand for a business’ product(s) over a period of time

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18
Q

‘Market dominance’ definition

A

The measure of strength of a business and its product(s) relative to competition

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19
Q

What is one way of calculating market dominace

A

Market Share

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20
Q

List ways to incraese marketshare

A

marketshare

  1. Be aware of customer needs
  2. Sell more to existing customers
  3. Find out why ‘old’ customers no longer use the business
  4. Have a clear marketing plan
  5. Use a variety of marlketing techniques- 4Ps
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21
Q

Define ‘barriers to entry’

A

The factors that could prevent a business from entering and competing in a market

22
Q

Define ‘barriers to exit’

A

The factors that could prevent a business from leaving a market, even if they would like to

23
Q

State some example of ‘barriers to entry’

A
  • Large start-up costs e.g. capital costs (buildings and machinery)
  • Matching marketing budgets as those already in the industry; many will also have loyal customers
  • Large restricts such as patent or governmet restrictions
  • Innability to gain econemies of scale
  • Existing firms starting a price war/ destroyer pricing
24
Q

Stated some ‘barriers to exit’

A
  • Difficulty selling off expensive plant and machinery creating ‘sunk’ costs
  • High redundancy costs
  • Contracts with suppliers should be honoured or large pay-offs
25
Q

Ways to grow a business

A

-Organic growth

Merger and aquisitions

26
Q

Define organic growth?

A

When a business grows by selling more of its own products to existing customers or finding new customers, assuming other businesses are not growing at a similar rate.

27
Q

Define merger

A

When 2 businesses join together to form a new larger business that is more dominant.

28
Q

Define takeover

A

Acquiring the control of another business by purchasing the majority of its shares causing the ‘parent company’ to increase dominance. This can cause the relationship between owners and managers to be ‘hostile.’

29
Q

Smaller firms in a large market should look to incraese market share and product prices by…

A
  1. operating in niche markets
  2. Offer better customer serrvice
  3. Offer longer opening-hours
  4. use local resources to gain expertise and customers
30
Q

State what CMA stands for and what they regulate

A

Competition and Markets Authority have the responsibility for enforcing competition laws. Have the power to investigate firms to see if anti-competition manner is active

31
Q

Recap Demand and Supply

A

Should know from economics

32
Q

What is globalisation?

A

The process of growth in world markets through a process of integration where its possible to trade in a global market in the same way as one would in a domestic market.

33
Q

What is a slump on the economic cycle?

A

High levels of unemployment, in many different industries low buyer confidence, low levels of consumer spending low levels of investment and low profits for businesses.

34
Q

What is the multiplier?

A

An initial change in aggregate demand can have a much greater final impact on the level of equilibrium national income

35
Q

What is fiscal policy?

A

Fiscal policy involves the government changing the levels of taxation and government spending in order to influence Aggregate Demand (AD) and the level of economic activity.

36
Q

What is monetary policy?

A

Monetary policy involves the bank of England changing the interest rates in the economy in order to influence the aggregate demand and the level of economic activity.

37
Q

What is a employment tribunal?

A

A special type of court that only deals with employment related issues such as victimization by an employer, unfair dismissal and discrimination.

38
Q

What are some laws that Businesses need to comply with?

A

Sex Discrimination Act 1975
Disability Discrimination Act 1995
National minimum wage act
Health and Safety Act 1974

39
Q

What are the two types of termination of employment?

A

Redundancy and Dismissal

40
Q

What is a redundancy?

A

Where the job that used to be performed no longer exists and so the employee is surplus to requirement.

41
Q

What is a Dismissal

A

This occurs for reasons of discipline or capability. Any dismissal has to be justified and must be fair if it to be legal.

42
Q

Advantages of increase technology at business?

A

Rather than creating unemployment, the introduction of new technology may bring a net increase in employment by increasing demand for the product or service.

New technology creates new demand

43
Q

Disadvantages of increased technology at business?

A

CAD and robotic processes in manufacturing have led to a reduction in the number of workers employed in those areas.

New technology makes it necessary for workers to acquire new skills, what some workers may be reluctant to do due to e.g. age.

44
Q

Advantages of using computer hardware and software?

A

Systems are faster
Storage is easier and storage costs are reduced
Communication is easier and faster
Analysis of large amounts of data is possible to aid business processes
New technology has made it easier for consumers e.g. click and collect
Workers do not have to be in the work place, it is possible to work from home.

45
Q

Disadvantages of using computer hardware and software?

A

Money needs to be spent on effective training for all involved in new systems.

The public may be resistant to changes

System failure or breakdown may mean that the whole business is affected.

New computer technology is costly

Security of data is a problem when storing information in computer systems.

46
Q

How has technology affected the four functional areas of business?

A

Marketing- New technology makes it possible to introduce new products to the market, e.g. smart phones

Financial- The use of technology in the business can speed up accounting practices and to store data electronically.

People new technology on the production line can result in redundancy or new training

Operations- New technology can improve productivity.

47
Q

What types of internal change are there in a business?

A 
Objective
Personnel
Skill Level
Finance
Innovation
48
Q

What types of external change are there for a business?

A 
Globalisation
Environment
Technology
Customer Base
Economy
Competition
Government
49
Q

What is Lewin’s Three step change management model?

A

Unfreeze, Transition, Freeze

50
Q

What is globalization?

A

The growth of the world so that it can be viewed as a whole place rather than a number of separate countries. The result for business is increased interdependence and the ability to trade in the world as if it were one market.

51
Q

What is conciliation?

A

The act of bringing parties together with an independent conciliator to find common ground and a solution to the problem.

A Business Studies Complete Overview of Specification (7 decks)

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