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external influences Flashcards

1
Q

Definition for demand and price

A

as price goes down demand goes up &and vice versa

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2
Q

Demand definition

A

the amount of a good/service that customers are willing and able to buy at any given price

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3
Q

supply definition

A

the amount of a good/service that sellers are willing and able to sell at any given price

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4
Q

price and supply interaction

A

when the price of a product goes up the business will want to supply more due to it being more profitable over another good

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5
Q 
label the supply and demand graph
      |         \             / (_)
      |           \         /
      |             \     /
 (_) |\_\_\_\_\_\_\_\ / (_)
      |               /|\ 
      |             /  |   \
      |           /    |    \
      |         /      |      \ (_)
      | \_\_\_\_\_\_\_|\_\_\_\_\_\_\_\_\_\_\_\_\_
                      (_)
A 
Price |         \             / (S)
         |           \         /
         |             \     /
     (P)|\_\_\_\_\_\_\_\./ (E)
          |               /|\ 
          |             /  |   \
          |           /    |    \
          |         /      |      \ (D)
          | \_\_\_\_\_\_\_|\_\_\_\_\_\_\_\_\_\_\_\_\_\_
                          (Q)                 Quantity
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6
Q

equilibrium price

A

the situation in a market where demand is equal to the supply i.e. both party’s have compromised in theory customers buy what they want and shops have no unsold stock

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7
Q

determines of demand

A

price, cost, wealth, advertising and promotional offers and public relations, taste and fashion, demographic changes(i.e. population) , government action, price of other good, Substitutes & complements

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8
Q

Determines of supply

A

price, costs, Taxes, subsidies, price of other products

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9
Q

What will cause a right shift on a graph

A

anything positive that isn’t a price change e.g. demand- more advertising, new trends
e.g. supply- costs fall, lower taxes

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10
Q

What will cause a Left shift on a graph

A

anything negative that isn’t a price change e.g. demand- less advertising, new trends
e.g. supply- government action, higher taxes

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11
Q

what is Quantitive data

A

Data you can put into numbers

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12
Q

What is Qualitive data

A

opinions that is written out such as focus groups

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13
Q

enterprise

A

another word for a business & someone wiling to take a risk to make a profits (entrepreneur)

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14
Q

entrepreneurs characteristics

A

self belief, confidence, persistence, drive, ability to work under pressure, creative ,imaginative, ability to be comfortable with a risk, leadership skills, energy& enthusiasm

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15
Q

decision making process

A

risks, rewards, uncertainty & opportunity

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16
Q

GDP meaning

A

Gross Domestic product

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17
Q

GNP

A

Gross National Products

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18
Q

Recession

A

when the GDP stays negative for over 2 Quaters

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19
Q

Steak holders Type

A 
Creditors (some one that you owe money to) 
Owners
Employs
Managers
Customers
Government
Suppliers
Society
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20
Q

Factors of production

A

Land-natural resources
Labour- the human input
Enterprise
Capital- goods used in the supply of other products e.g tech

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21
Q

What are the three sectors In Business

A

Primary, Secondary, Tertiary

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22
Q

What’s the Primary sector

A

Activities undertaken by directly using natural resources :
-Agriculture
-Fishing
Forms a base for all other products produced in other sectors (only 1% of the UK Economy)

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23
Q

What’s the Secondary sector

A

Involves converting raw materials into finished goods:
-Manufacturing/construction
-Assembly plants
-Goods can be finished or unfished (one part of the finished Product E.G. steering wheels in cars)
accounts for 10% of the UK economy

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24
Q

What’s the Tertiary sector

A

-Prevision of services
-Financial services
-transport
most important accounts for 90% of the UK economy

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25
Constraints of a busniees
Environment competition legislation (E.G. Minimum wage) The Economy
26
Functions of a business
Accounting & Finance (Taxes) Human Resource management (Well being of the work force) Operations & management (Machinery, how the production works) Marketing & Support service (Organise advertising & sales support)
27
Private Sector
In the private sector businesses are operated & owned by a privet individual or company(s) Private sector businesses are ran for profit to earn returns for the business owner
28
Public sector
In the public sector businesses and other organisations are owned and run on the behalf of the public, either by the government itself, or by organisation who are funded by report to the government Not profit organisations to provide goods and services to the public using public funds.
29
Unincoperated
The owner is the business-no legal difference owner has unlimited liability for business act (including debts) Most unincorporated businesses operate as a sole trader (Unlimited Liability)
30
Incorporated
Legal differences between the business and the owners owners (share holders) have limit led liability most incorporate businesses operate as private company
31
Franchises
Businesses with well know brand names (Franchisers) lets a person or group of people (Franchisee) set up suing that brand no legal structure in itself (depends on how the original business is set up)
32
+ & - of franchises
+: -Firm may not have to spend large amounts of money in order to expand - products necessary for franchise to operate are under the franchisers control - applicants can be carefully selected for suitability - : -control issues - the cost of supporting the franchisee - the possibility of conflict
33
+ & - for the Franchisee!!
+: - Low risk - support advice & training - Marketing (national) do it for you - Maybe easier to obtain finance - : -profit is shared - franchise fees (royalties) - suppliers have to be brought for m the franchise - less control & independence - The business cannot be sold without permission
34
what is a cooperative
A business that is owned and run by its members(employees & customers) profits are shared between members and reinvested into the business and the local community
35
+ & - of cooperatives
+: -legally straight forward to establish(legal documentation is straight forward) - Liability for members usually limited - higher quality of service is likely to be provided (as customers are likely to be members) - customers are usually loyal supporters - : -capital can be limited (liked to what members contribute) - weak management (those selected may not have grasp of what business principles) - slower decision making (too much insolvent of member) - employees may want more
36
Local markets
- Concerned with customers clustered tightly around the marketer - can learn great deal about the customer & make necessary changes quickly - Potential market is limited & can be susceptible to local competitions
37
National markets
- distribute their product throughout a country (This may involve multiple manufacturing plants a distribution system including warehoues) - offers tremendous profit potential, but also exposes the marketer to new aggressive competitors
38
International Markets
- operates in more than one country - adjustments are normally made in the marketing mix in various countries - legal and cultural differences alone can be greatly affect strategy's outcome - if national markets become more saturated the company can expand into foreign markets
39
what are the 3 types of market
Local, National & International
40
reasons for the growth in multinationals
Emerging economies economies of scale protectionism (taxing imports to protect domestic markets) extend growth through take overs & mergers
41
+ & - of multinationals (host)
+: -significant employment & training to labour force - adds to the host country's GDP & Capital investment - Increased competition, consumer choice - increased tax revenues to hoists country - : domestic Business may not be able to compete - tax avoidance - could damage domestic Business - may not feel as society responsible as domestic businesses (impose culture on host nation)
42
Measuring Business size and Growth
``` Number of employees number of factories, shops and offices turnover & profit levels Stock market value capital employed ```
43
factors affecting the size of a business
- market size - nature of the product - personal preference - ability to access resources for expansion
44
What are the 2 types of growth
Organic & External
45
Organic Growth
Growth form within the business E.G. Launch of new products, expansion into new geographical markets exportations new distribution channels franchise Lower risk slower Builds on existing activities good for high growth markets rewards innovation & brand building
46
External growth
growth from outside the business e.g. take over competitor merger with competitor ``` Acquiring a supplier joint venture over seas higher risk faster transformational popular in mature or declining markets ```
47
Types of intergration
forward ↑ ← horizontal→ ↓ backward
48
What is the basic supply chain
Raw materials → manufacturing → distribution → retail
49
forward, horizontal & backward intergration
forward integration is a company moving up the supply chain, horizontal is company merging or takeover of a company on the same stage of the supply chain
50
Merger
combination of two previously separate business achieved by forming a completely new business into which the two original businesses are integrated
51
Takeover
Where one business either buys a majority stake in the business or makes a successful bid to assume control of a business
52
strategic alliances
an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project, a strategic alliance is less permeant that a joint venture.
53
Joint venture
A joint venture is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance
54
How do you indicate a price Increase on a supply or demand graph
``` | / (S) (p1) |_ _ _ _ _ _ / ↑ | /| (p) |_______ / | | /| | | / | | | / | | | / | | | _______|_|___________ (Q) (Q1) → | \ (p1) |_ _ _ _\ ↑ | | \ (p) |_____ |_ \ | | | \ | | | \ | | | \ | | | \ (D) | _____|_ |____________ (Q1) (Q) ← ```
55
How do you show a right shift on a supply & demand graph
``` Price | \ / (S)/ S1 | \ / / | \ / / (P)|_______\./ (E) / | /|\ / |_ _ _ _ / |_\ /(E1) | / | /| \ | / |/ | \ (D) | _______|_ |_____________ (Q) Quantity ```
56
What is Elasticity
measures how sensitive quantity demanded is to a change in prices
57
what is elastic demand
Vastly changes to the change in price, luxury
58
What is Inelastic demand
Doesn't change demand massive amounts, few substitutes necessity
59
Elastic graph
Not steep
60
Inelastic graph
Very steep
61
Other word for competition
Rivalry among sellers.
62
What is a market
Place where buyers & sellers meet to establish a price
63
Types of market structures
Competitive market, monopolistic competition, oligopoly, monopoly
64
Definition of Competitive
A market in which there are a large number of sellers. Businesses in theses markets compete on mainly price
65
Definition of Monopoly
A market is dominated by one seller
66
what percentage of a market in the UK do you need to be described as a monopoly
25%
67
What are the characteristics of a monopoly market
- single company or group - inferior products - absence of competition - High prices
68
what are the characteristics of a competitive market
- many companies - low prices - lots of competition
69
Definition of economies of scale
Economies of scale arises when Unit costs fall as output rises
70
Definition of Oligopoly
Exits where a market is dominated by a few firms.
71
Definition of Monopolistic competition
A market structure with many competing firms each of witch supplies a slightly differential product
72
characteristics of Oligopoly
- Few companies - compete on non-price differences - similar (high prices some times) - The products and prices in this type of market are similar
73
characteristic of Monopolistic competition
- Many firms (not as many as competitive market) - Similar (competitive) prices - compete on non-price differences
74
What does collude mean
Cooperate in a secret or unlawful way in order to deceive or gain an advantage over others.
75
Definition of market size
Expressed as the collective value of the goods/services that buyers purchase.
76
Definition of market growth
The percentage change in the size of the market, measured over a specific period
77
Definition of market share
The percentage of total sales (by value) that a business has in a specified market
78
What’s the difference between international and multi nationals
International companies are importers and exporters, they have no investment outside of their home country. Multinational companies has locations or facilities in multiple countries, but each location functions in its own way, essentially as its own entity

A-Level Business (9 decks)

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