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business > external influences - miss blackwell > Flashcards

external influences - miss blackwell Flashcards

1
Q

define demand

A

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

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2
Q

define supply

A

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

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3
Q

equilibrium price

A

when demand is equal to the supply

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4
Q

3 determinants of demand

A
  • trends and fashion
  • advertising
  • wealth
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5
Q

define price

A

amount customers pay for a product

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6
Q

define cost

A

amount spent by a business making/supplying/ buying a product

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7
Q

3 determinants of supply

A
  • price
    -tax
  • price of other products
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8
Q

define price elasticity of demand

A

shows how responsive demand is to change in price

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9
Q

inelastic demand

A

quantity demanded is insensitive to a change in price
- eg: petrol - necessity product

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10
Q

elastic demand

A

quantity demanded is sensitive to a change in price
- eg: holidays abroad - not a necessity product

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11
Q

define competition

A

rivalry amongst sellers

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12
Q

define market

A

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

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13
Q

characteristics of a non physical market

A
  • grown rapidly
  • offer every convienience
  • can be online or digital
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14
Q

characteristics of physical markets

A
  • ## personalisation can be offered
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15
Q

define online

A

when you buy something through technology and wait for it to be delivered to you

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16
Q

define digital

A

when you download and buy a product which is yours straight away - video game

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17
Q

define competitive market theory

A
  • a market in which there is a huge amount of sellers
  • businesses mainly compete upon price
  • low prices to get the most sales
18
Q

define monopoly theory

A

a market dominated buy one seller only
- high prices as can take advantage of customers

  • in reality the CMA made a monopoly mean that it is any firm with more than 25% of the industries sales
19
Q

define oligopoly

A

exists where a market is dominated by a few firms
- the mobile network

20
Q

characteristics of an oligopoly

A
  • product and prices in the market are similar
  • businesses compete on non price differences
  • sometimes oligopolies collude
21
Q

define monopolistic competition

A

a market structure with many competing firms each of whom supplies a slightly different product
- eg : hairdressers

22
Q

define market size

A

the collective value of the goods and services that buyers purchase

23
Q

define market growth

A

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

24
Q

define market share

A

the percentage of sales that a business has in a specific market

25
Q

5 ways to increase market share

A
  • follow / adapt to a trend
  • advertising on social media
  • improve quality
  • stockpile so no selling out
  • lower prices
26
Q

define barriers to entry

A

the factors that could prevent a firm from entering and competing in a market

27
Q

factors which stop people from entering a market

A
  • large start up costs ( machinery and premises )
  • will need to break loyalty between other brands and customers
    -inability to gain ecomomies of scale
28
Q

define barriers to exit

A

the factors that could prevent a firm from leaving a market even if it wanted to

29
Q

factors which stop people from exiting a market

A
  • difficulty of selling off capital ( shelves, tills, machinery )
  • high redundency costs
  • contract with suppliers
30
Q

define market power

A
  • the ability of a firm to influence or control the terms and conditions on which goods are bought and sold
31
Q

define market dominance

A

the business with the most market share in a specific market

32
Q

define merger

A

when two companies join together to form a new , larger business

33
Q

define acquisition/takeover

A

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

34
Q

4 external growth advantages

A
  • may gain new management with different skills and talents
    -will result in an increase in revenue amd therefore market share
  • may be able to meet customer needs more effectively
  • economies of scale
35
Q

4 external growth disadvantages

A

-communication problems
- may take on extra debts business struggles to pay back
-higher prices
- employees could result in redundancy

36
Q

define organic growth

A

expansion from within a business

37
Q

3 examples of organic growth

A
  • opening new stores
  • employing more workers
  • launching new products
38
Q

3 advantages of organic growth

A
  • less risk than external growth bcos of no mergers/aquisitions
  • growth can be financed internally thru retained profits
  • growth rate can be grown at more steady rate
39
Q

3 disadvantages of organic growth

A

-harder to build market share if the market already has a leader
- slow growth so bad for shareholders

40
Q

what are 3 things the CMA aims to do

A
  • work to encourage competition
  • investigates mergers and aquisitions which could restrict competition
  • looks into where there might be abuses of dominant positions
41
Q

3 examples of the cartel offence

A
  • market sharing
  • price fixing
  • bid rigging

business (2 decks)

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