Gcse Bussines 2.1

Question 1

What is internal growth?

Answer 1

When business boots sales or attracts more customers( more sold prudcts in new markets, online)

-sustainable and slow

(Organic) growth

Question 2

What is external growth?

Answer 2

Merger or takeover a business (increase market share, eliminate rivals)

Merger: two business join together to form a new business

(Inorganic) growth

Question 3

What is horizontal intergration?

Answer 3

Business mergers with another business in same industry.(take advantage of costs

Question 4

What is vertical integration?

Answer 4

One business acquires bussines further up or lower down supply train

Question 5

What is vertical backwards integration?

Answer 5

When a bussines owns the manufacturer/supplier of products

Question 6

What is a forward vertical intervention?

Answer 6

Business acquires another business higher up in supply chain

Question 7

What are public limited company’s?

Answer 7

-suited to large multinational corporation

-has limited liability, they can issue shares to potential owner to the general public.

Question 8

What are the advantages of public limited companies?

Answer 8

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

Question 9

What are the disadvantages of public limited companies?

Answer 9

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]

Question 10

What are the internal factors that cause business aims & objectives to change?

Answer 10

-gain profits
-increase market share
= focus on more staff, new markets entered and product variety

(less about survival and more about expanding)

Question 11

What are the external factors that cause a businesses aims and objectives to change? (6pts)

Answer 11

-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]

Question 12

What is globalisation?

Answer 12

Bussines that buy and sell abroad. Aswell as making products in different country’s to sell them there/ service in another country.

Question 13

Why might a bussines globalise?(3)

Answer 13

Creates a lot of opportunities;
-cheaper labour/materials
-enter new markets
-reduces risk nationally
-

Question 14

What are the drawbacks of globalization?(4)

Answer 14

-change products/ branding to fit culture
-supply chain are hard to manage
-local law / taxes[tariff]
-more competition
(Increase cost

Question 15

How does globalization effect the marketing mix?

Answer 15

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

Question 16

What are qoutas?

Answer 16

Limit the number of products products allowed to be sold. They’re not add any costs

Question 17

What are ethics?

Answer 17

What’s is considered by the consumers/ people on the right and wrong morals

Question 18

How does the environmental ethical issues affect a bussines?

Answer 18

• 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.

Question 19

How does employee ethical issues affect a business?

Answer 19

-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)

Question 20

How do animal rights affect a business?

Answer 20

-plastic packaging will need to be removed
-business will be limited to free range products (increase costs)

Question 21

Why might a business be ethical?

Answer 21

-mostly right
-gain a competitive advantage(customers more interested) meaning they can charge higher prices and gain customer loyalty.
-pressure groups encourage bussines

Question 22

What are the WAYS a business aims and objectives change as it expands

Answer 22

-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

Question 23

What are the external factors that make business aims be objectives to change

Answer 23

-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)

Question 24

What are the internal reason that make business aim and objectives to change?

Answer 24

-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

Question 25

What are the different internal organizational structures in a business?

Answer 25

-flat structure
-hierarchical structure
-centralized
-decentralized