Intro to business-steeds Flashcards
What are characteristics of an entrepreneur?
Takes risks, takes the initiative, makes an investment, calculates risks, creative, leadership skills, confident, persistent
What are the factors of production?
Land, labour, capital, entrepreneurship
Benefits of adding value
Charging a higher price, point of difference between competitors, protecting customers from competitors, focusing on target market
What are the different business sectors?
Primary, secondary and tertiary.
Private, public and third.
Local, national and international.
What is an aim, objective and mission statement?
Aim- long term goal
Objective- short term measurable goal
Mission statement- overriding goal written from a strategic perspective
Influences on objectives
Finance, communication, conflicts, legislation, economy, competition, industrial disputes, other stakeholders
What factors influence business size?
Funds, availability of resources, competition, demand, size of market, legislation, nature of the product, technology
Two features of each type of business
Sole- easy to set up,unlimited liability
Partner- no continuity, jobs and profit shared between owners
Ltd-shareholders are friends/family, easier to raise finance
Plc- limited liability, financial information is public
What is a joint venture?
A separate entity created by two or more parties involving shared ownership, returns and risk
What is a strategic alliance?
An agreement between businesses to work towards a common objective
A disadvantage and advantage of organic growth
Ad- little/no cost, more productivity,less risk,grow at sensible rate
Dis- uncontrolled, slow, determined by growth of market
Advantage and disadvantage of a merger
Ad- controlled, benefits of both businesses, less hostile, greater market share
Dis- both have to agree, take on others debt, time consuming, redundancies
Advantage and disadvantage of a takeover
Ad- growth in market share, economies of scale, new resources, immediate growth
Dis- high cost, no control, hostile, problems with integration,redundancies, upset customers
Advantage and disadvantage of a joint venture
Ad- shared resources, reduce risk
Dis-conflict, in balances investment, what if it fails
Advantage and disadvantage of a strategic alliance
Ad- cost saving, beneficial to all, increased efficiency
Dis- customer upset, agreement between all parties, more complicated- conflict
