Higher Business Management

Question 1

What are the 6 stages of the product life cycle?

Answer 1

Research and development, Launch/Introduction, Growth, Maturity, Saturation, Decline.

Question 2

What are 3 features of the development stage?

Answer 2

High research and development costs, No income for product, Financed by cash cows.

Question 3

What are 2 features of the launch/introduction stage?

Answer 3

Sales rise as customer awareness increases, Supported by advertisements and promotions.

Question 4

What are 2 features of the growth stage?

Answer 4

Sales/profits rise, Supported by promotions.

Question 5

What are 3 features of the maturity stage?

Answer 5

Sales peak reached, Research and development costs paid off, Profit made is used to support the development of new products.

Question 6

What are 2 features of the saturation stage?

Answer 6

Heavy competition, Falling Sales.

Question 7

What are 3 features of the decline stage?

Answer 7

Sales fall rapidly, Prices at their lowest, rivals drop out of market.

Question 8

What are 4 extension strategies?

Answer 8

Improve product - new better versions, Find new uses for product, Alter packaging to appeal to new consumers - different colours, size, shape etc. Change channel of distribution - try internet selling.

Question 9

What is market skimming?

Answer 9

High price charged for product for limited period of time with the aim of maximising profit while product is still unique to the market. As competition increases, price falls in line with that of competitors.

Question 10

What are 4 examples of products that might use market skimming as a pricing strategy?

Answer 10

Video games/consoles, electrical products like TVs, touch screen devices e.g. smartphones, home entertainment equipment.

Question 11

What are the 2 types of market research?

Answer 11

Field and desk research.

Question 12

What are 4 methods of field research?

Answer 12

Surveys, Hall test, Observations, Focus groups.

Question 13

What are 2 methods of desk research?

Answer 13

Internet, Government reports.

Question 14

What are 4 methods that can be used to solve cash flow problems?

Answer 14

Arrange better credit terms with suppliers, Sell unnecessary Non-current assets, Source cheaper suppliers for purchases of supplies/overheads, Offer discount to encourage customers to buy more, pay quicker.

Question 15

What are 2 reasons cash flow problems can occur?

Answer 15

Customers take too long to pay, Cost of raw materials/inputs from suppliers has risen.

Question 16

What are 2 impacts cash flow problems can have on a business?

Answer 16

Business cannot cover expenses which can incur a higher fee to pay if they are not paid on time, Business cannot afford fee to purchase inputs/supplies meaning they cannot meet customer demand leaving customers dissatisfied.

Question 17

What does the Statement of Financial Position (SoFP) do?

Answer 17

Shows value of business at a particular date. It is a record of assets and liabilities.

Question 18

What 3 things does a SoFP show?

Answer 18

Non-current assets- Items business owns and will keep for more than 1 year.
Current Assets- Items business owns and will keep for less than one year.
Current Liabilities- Items business owes and will pay back in the short term.

Question 19

What is the formula for Gross Profit?

Answer 19

Revenue - Cost of goods sold (cost of buying/storing)

Question 20

What is the Gross Profit Ratio?

Answer 20

Gross Profit divided by Sales times 100

Shows percentage of of gross profit for every £1 of sales.

Question 21

What does the Gross Profit Ratio indicate to a business?

Answer 21

Increase in ratio means more sales have been generated.

Decrease means cost of materials may have gone up.

Question 22

What are quality standards/symbols?

Answer 22

Method of ensuring quality. Organisations set standards for quality by giving business who meet these symbols to use so consumers are aware of the standards being met e.g. BSI Kite mark and CE Mark.

Question 23

What are the 3 main areas covered by HRM legislation?

Answer 23

Discrimination, Employee Protection, Health and Safety.

Question 24

What are some protected characteristics under the equality act 2010?

Answer 24

Age, Gender, Disability, Race, Religion/Beliefs.

Question 25

What are 4 impacts of the equality act 2010?

Answer 25

Ensure ads for job vacancies do not contain discriminatory words/statements, Have procedures for investigating any claims of discrimination, Train staff of responsibilities under act, Make premises accessible for all staff/customers.

Question 26

What are 4 benefits to employees from employment protection legislation?

Answer 26

Receive contract of employment, Receive notice period before redundancy and receive redundancy pay - no unfair dismissal, Challenge unfair dismissal in employment tribunal, Paid maternity leave and reinstatement afterwards.

Question 27

What are 4 impacts of employment legislation on management?

Answer 27

Must issue staff with contract of employment detailing rights in workplace, Give staff itemised payslip showing how pay has been calculated, Have grievance procedures in case staff complain about mistreatment, Have disciplinary procedure for when staff accused of misconduct.

Question 28

What are employees and employers duties under health and safety legislation?

Answer 28

Employers- Maintain machinery regularly, Provide protective clothing, Risk assess jobs, Train employees in safe working practices.

Employees- Conduct self appropriately when working, Co-operate with employer by using safety/protective gear, Attend safety training, Report any dangers seen/experienced.