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A-Level Business > external influences > Flashcards

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
Q

Constraints of a busniees

A

Environment
competition
legislation (E.G. Minimum wage)
The Economy

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26
Q

Functions of a business

A

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)

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27
Q

Private Sector

A

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

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28
Q

Public sector

A

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.

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29
Q

Unincoperated

A

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)

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30
Q

Incorporated

A

Legal differences between the business and the owners
owners (share holders) have limit led liability
most incorporate businesses operate as private company

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31
Q

Franchises

A

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)

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32
Q

+ & - of franchises

A

+: -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
Q

+ & - for the Franchisee!!

A

+: - 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
Q

what is a cooperative

A

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
Q

+ & - of cooperatives

A

+: -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
Q

Local markets

A
  • 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
Q

National markets

A
  • 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
Q

International Markets

A
  • 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
Q

what are the 3 types of market

A

Local, National & International

40
Q

reasons for the growth in multinationals

A

Emerging economies
economies of scale
protectionism (taxing imports to protect domestic markets)
extend growth through take overs & mergers

41
Q

+ & - of multinationals (host)

A

+: -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
Q

Measuring Business size and Growth

A 
Number of employees
number of factories, shops and offices 
turnover & profit levels
Stock market value
capital employed
43
Q

factors affecting the size of a business

A
  • market size
  • nature of the product
  • personal preference
  • ability to access resources for expansion
44
Q

What are the 2 types of growth

A

Organic & External

45
Q

Organic Growth

A

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
Q

External growth

A

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
Q

Types of intergration

A

forward
↑

                     ← horizontal→

                               ↓
                        backward
48
Q

What is the basic supply chain

A

Raw materials → manufacturing → distribution → retail

49
Q

forward, horizontal & backward intergration

A

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
Q

Merger

A

combination of two previously separate business achieved by forming a completely new business into which the two original businesses are integrated

51
Q

Takeover

A

Where one business either buys a majority stake in the business or makes a successful bid to assume control of a business

52
Q

strategic alliances

A

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
Q

Joint venture

A

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
Q

How do you indicate a price Increase on a supply or demand graph

A 
|                      / (S)
  (p1) |_ _ _ _ _ _  /
   ↑   |                  /|
 (p)   |\_\_\_\_\_\_\_ / |
        |               /|  |
        |             /  |  | 
        |           /    |  | 
        |         /      |  |  
        | \_\_\_\_\_\_\_|_|\_\_\_\_\_\_\_\_\_\_\_          
                      (Q) (Q1)           
                          →
        |          \            
  (p1) |_ _ _ _\   
   ↑   |            |  \  
 (p)   |\_\_\_\_\_ |_ \ 
        |            |   |  \
        |            |   |    \
        |            |   |      \
        |            |   |        \ (D)
        | \_\_\_\_\_|_ |\_\_\_\_\_\_\_\_\_\_\_\_                                                                                                    
                (Q1)   (Q)
                       ←
55
Q

How do you show a right shift on a supply & demand graph

A 
Price |         \             / (S)/ S1
         |           \         /      /
         |             \     /      /
     (P)|\_\_\_\_\_\_\_\./ (E) /
          |              /|\     /
          |_ _ _ _ /  |_\ /(E1)
          |           /    |  /| \
          |         /      |/  |   \ (D)
          | \_\_\_\_\_\_\_|_ |\_\_\_\_\_\_\_\_\_\_\_\_\_
                          (Q)                 Quantity
56
Q

What is Elasticity

A

measures how sensitive quantity demanded is to a change in prices

57
Q

what is elastic demand

A

Vastly changes to the change in price, luxury

58
Q

What is Inelastic demand

A

Doesn’t change demand massive amounts, few substitutes necessity

59
Q

Elastic graph

60
Q

Inelastic graph

A

Very steep

61
Q

Other word for competition

A

Rivalry among sellers.

62
Q

What is a market

A

Place where buyers & sellers meet to establish a price

63
Q

Types of market structures

A

Competitive market, monopolistic competition, oligopoly, monopoly

64
Q

Definition of Competitive

A

A market in which there are a large number of sellers. Businesses in theses markets compete on mainly price

65
Q

Definition of Monopoly

A

A market is dominated by one seller

66
Q

what percentage of a market in the UK do you need to be described as a monopoly

67
Q

What are the characteristics of a monopoly market

A
  • single company or group
  • inferior products
  • absence of competition
  • High prices
68
Q

what are the characteristics of a competitive market

A
  • many companies
  • low prices
  • lots of competition
69
Q

Definition of economies of scale

A

Economies of scale arises when Unit costs fall as output rises

70
Q

Definition of Oligopoly

A

Exits where a market is dominated by a few firms.

71
Q

Definition of Monopolistic competition

A

A market structure with many competing firms each of witch supplies a slightly differential product

72
Q

characteristics of Oligopoly

A
  • Few companies
  • compete on non-price differences
  • similar (high prices some times)
  • The products and prices in this type of market are similar
73
Q

characteristic of Monopolistic competition

A
  • Many firms (not as many as competitive market)
  • Similar (competitive) prices
  • compete on non-price differences
74
Q

What does collude mean

A

Cooperate in a secret or unlawful way in order to deceive or gain an advantage over others.

75
Q

Definition of market size

A

Expressed as the collective value of the goods/services that buyers purchase.

76
Q

Definition of market growth

A

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

77
Q

Definition of market share

A

The percentage of total sales (by value) that a business has in a specified market

78
Q

What’s the difference between international and multi nationals

A

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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