Hass businesses yr9 Flashcards
What is financial risk?
Chance of losing money or facing financial instability when investing or making financial decisions
What are the ways that people manage financial risks?
Diversification (Spreading money across multiple investments), Insurance (to cover big financial losses), and Superannuation (A compulsory savings plan for retirement)
What is diversification?
Spreading money across multiple different investments to reduce risk of a financial loss
What is insurance?
A contract in which you pay premiums to a company or organisation in which in return, provide financial protection against potential financial losses or important assets
What is Superannuation?
A compulsory retirement based savings management plan where money is regularly funded into from your income
What is financial reward?
Money that you gain or profit from investing, saving, or work
How do people increase financial reward?
Investing in shares/equities in the stock market. investing in properties, or investing in savings accounts in banks.
What are shares/equities?
Units of ownership in a company representing a claim on its assets and earnings.
What can change in units of equities?
The unit price can change overtime, depending on the performance of the company, in which you may or may not gain a profit from when selling units.
What are bank savings?
Funds deposited in a kind of bank account that earn profitable interest overtime.
What are scams?
Tricks used by criminals and offenders to deceive people and victims to obtain something they seek. Usually scammers seek and desire money or personal information
How do you protect yourself from scams?
Be cautious (Don’t share personal information to unknown people), and verify before investing (Always check if something is real, verified, or information that is used by official websites and data)
What is competitive advantage?
An attribute that allows a business to outperform against competitors, that can attract more customers, sell more products, or operate more efficiently.
How do businesses gain a competitive advantage?
Innovation, Cost Leadership, Differentiation, and improved customer service
What is Innovation?
The process of creating new ideas, products, services or methods to improve existing solutions.
What is cost leadership?
Where a business aims to become a low-cost producer, either from manufacturing or selling products and services at a lower cost against competitors
What is differentiation?
When a business makes its products or services more unique, different, or better in some way compared to its competitors.
What is customer service in terms of competitive advantage?
Having provided with excellent service and assistance to customers that is distinguished from its competitors. This can lead to customer attraction and loyalty
Why is competitive advantage important?
To attract customers and increase profits, which can lead to high sales and increase profits to help grow the business and succeed
What are MNC’s?
(Multinational Corporations) - Large companies that operate in multiple countries, managing production or delivering services in various global markets.
why do businesses become multinational?
Access to new markets, lower production costs, and global brand recognition
What are some impacts of MNC’s?
Economic growth to host countries (jobs, investing in local economies, and new technologies are brought), Cultural Influence (MNC’s can spread cultural products leading to greater cultural exchange between countries), Effect on small business due to competition, and (usually) negative environment treatment to host countries
What are some challenges that and MNC might face?
Regulations implemented in host countries (E.g: laws, can cause complications), Cultural differences, and global social criticism
What are interest rates?
They represent the cost of borrowing money or the return on money saved or invested.
