Gcse Bussines 2.1 Flashcards
What is internal growth?
When business boots sales or attracts more customers( more sold prudcts in new markets, online)
-sustainable and slow
(Organic) growth
What is external growth?
Merger or takeover a business (increase market share, eliminate rivals)
Merger: two business join together to form a new business
(Inorganic) growth
What is horizontal intergration?
Business mergers with another business in same industry.(take advantage of costs
What is vertical integration?
One business acquires bussines further up or lower down supply train
What is vertical backwards integration?
When a bussines owns the manufacturer/supplier of products
What is a forward vertical intervention?
Business acquires another business higher up in supply chain
What are public limited company’s?
-suited to large multinational corporation
-has limited liability, they can issue shares to potential owner to the general public.
What are the advantages of public limited companies?
Shares can be issue shares-to potential owners to general public
Have limited liability
Can trade shares on stock market. Allowing bussines to raise more capital than private business limited company—grow bussines—share higher prices—increasing status
What are the disadvantages of public limited companies?
Higher commitment of capital is required . Listing bussines lo. Stock exchange can be expensive and may require lots of papear work.
Has strict regulation and info on plc made public. Allowing rivals to have access to info
- subject to losing ownership. From shareholders(more shares) that vote on key decisions.[takeover]
What are the internal factors that cause business aims & objectives to change?
-gain profits
-increase market share
= focus on more staff, new markets entered and product variety
(less about survival and more about expanding)
What are the external factors that cause a businesses aims and objectives to change? (6pts)
-A strong economy[more disposable income]
-recession[downsize operations]
-customer trends[ethical]
-products manufactured[more units]
-changes in law and regulations
-tech changes[social media strategies]
What is globalisation?
Bussines that buy and sell abroad. Aswell as making products in different country’s to sell them there/ service in another country.
Why might a bussines globalise?(3)
Creates a lot of opportunities;
-cheaper labour/materials
-enter new markets
-reduces risk nationally
-
What are the drawbacks of globalization?(4)
-change products/ branding to fit culture
-supply chain are hard to manage
-local law / taxes[tariff]
-more competition
(Increase cost
How does globalization effect the marketing mix?
Product: adapt designs to local fashion
Place: affect transport between countries
Promotion: adapted to local customs and cultures
Price: affected by exchange rates, taxes, therefore adapt pricing
What are qoutas?
Limit the number of products products allowed to be sold. They’re not add any costs
What are ethics?
What’s is considered by the consumers/ people on the right and wrong morals
How does the environmental ethical issues affect a bussines?
- will increase pressure on bussines to be more environmentally friendly.
-Will reduce plastic in production and packaging
-will shorten distribution chain so there is less transport, less pollution.
How does employee ethical issues affect a business?
-the working environment may need to be improved. To motivate employees
-pay fairer wage. If job role requires higher than minimum wage.
(All increase costs, to attract customers)
How do animal rights affect a business?
-plastic packaging will need to be removed
-business will be limited to free range products (increase costs)
Why might a business be ethical?
-mostly right
-gain a competitive advantage(customers more interested) meaning they can charge higher prices and gain customer loyalty.
-pressure groups encourage bussines
What are the WAYS a business aims and objectives change as it expands
-new markets:
•enters(sell to diff groups and new product in new locations
•exit( original marker shrinks, so product not selling well)
-product range: sell diff ranges of successful product. Or product not selling well. Concentrate on promoting successful product
-less survival; business is stable. Centres more on growth. To maximise profits. For reinvestments. Economy down turn reverts back to survival
-size of work force: more staff is required for bigger firms. Or reduce staff if takes over other firms.so Less people in same role
What are the external factors that make business aims be objectives to change
-new legislation: (like living wage(more higher wages
-change market conditions (growth in market=means more sales) (market shrinks = focus on survival)(more competitive =maintain market share)
-change technology ( keep up to date to buy new equipment and train staff)
What are the internal reason that make business aim and objectives to change?
-performance: company performs better . Sales increase unexpectedly one month. Aims to match that month
- internal changes: changes inside company. Exp new management ( managers have new roles, different priorities
What are the different internal organizational structures in a business?
-flat structure
-hierarchical structure
-centralized
-decentralized
