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A level Business OCR > Introducion To Business > Flashcards

Introducion To Business Flashcards

1
Q

Enterprise

A

Another word for a business

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2
Q

Entrepreneur

A

The action of a risk taker starting their own business
- takes the initiative in trying to exploit a business opportunity
- takes time to understand and calculate the risks involved
- makes an investment to set up the business

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3
Q

Characteristics of an entrepreneur

A

Self belief
Confidence
Persistence + drive
Creative skills
Leadership skills
Ability to work under pressure
Risk taker

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4
Q

GDP

A

Gross domestic product - total market value of the goods and services produced by a country’s economy during a specified period of time.

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5
Q

Ways businesses may assess risk

A

Making sacrifices e.g relationships
Planning, financial documents
If this business fails, can i afford it?
Will customers actually buy the product?
To i have the resources to make this business work?

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6
Q

Aspects of the decision making process

A

Risks, rewards, opportunity cost, Uncertainty

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7
Q

Opportunity cost

A

The cost of the next best alternative foregone (the thing you are not doing)

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8
Q

Uncertainty

A

Interest rates, inflation
External factors, economic factors, confidence people have when spending money

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9
Q

Uncertainty in the economy can cause…

A

…people not not spending as much

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10
Q

Labour

A

The human input into the production process
Decent supply of labour, well skilled

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11
Q

Land

A

Natural resources available for production
Examples - coal, oil, wind

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12
Q

Enterprise (factors of production)

A

Entrepreneurs organise factors of production and take risks
Individual(s) who will take risk and use other actors (land, labour, capital)

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13
Q

Capital

A

Goods used in the supply of other products
E.g machines + assets, taking advantage of machinery to be more efficient

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14
Q

The decision making process is..

A

One of the most critical processes in a business. Effective and efficient decisions will bring results to your business.

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15
Q

Added value is…

A

Equivalent to the increase of value that a business creates by undertaking the production process
E.g buying sweets in bulk, putting them in new packaging (which is more enticing for customers) and then selling them for more

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16
Q

Added value =

A

The difference between the price of the finished product or service and the cost of the inputs involved in making it
Finished product - making costs = added value

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17
Q

Examples of added value

A

Online convenience
Branded (reputation)
Good quality
Attractive packaging
Customer service(can charge more)
Products and features

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18
Q

Benefits of added value

A

Charging more
Creating a point of difference from the competition (unique selling point)
Protecting from competitors trying to steal customers
Focusing a business more closely on its target market segment

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19
Q

Accounting and finance

A

Analyse financial data,
interpret trends and provide valuable insights that guide the company’s direction,
manage assets

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20
Q

Operations and management

A

Converting materials and labour into goods and services efficiently as possible to maximise the profit of an organisation
Stock control
Machinery and technological advancements
Lean production - reduction of waste, increase efficiency + quality

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21
Q

Marketing

A

Monitor data across the marketing life cycle
Promoting products
Identifying needs through quality, price etc
Market research
Target market
Advertising

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22
Q

Human Resources management

A

Implementing and managing various talent development and performance management programs
Recruitment and selection
Training
Employees
Employer retention
Welling of the workforce

23
Q

Customer service

A

Managing customer service staff
Handling customer complaints and queries
Implementing customer service strategies
Analysing customer service data
Retain customers

24
Q

Sales team

A

Create predictable revenue by streamlining the sales process with the best practices and automation

25
Q

Constraints

A

Limiting factors

26
Q

Constraints of a business

A

Employee skills
Competition
The economy
Finance available
Legistration

27
Q

Primary sector

A

Activities undertaken by directly using natural resources
E.g fishing, forestry, agriculture

28
Q

Secondary sector

A

Involves converting raw materials into finished goods
E.g construction / manufacturing, assembly plant, goods can be finished or unfinished

29
Q

Tertiary sector

A

Financial services
Leisure services
Transport
(Accounting for 80% of the UK’s economy)

30
Q

Stakeholders

A

Any individual or organisations who have a vested interest in the activities and decision making of a business (owners, employees, managers are internal creditors) and society and suppliers are external creditors

31
Q

(Stakeholder) shareholders and owners are mainly interested in…

A

Success of the business
Profit
Return on investment
Employee and customer satisfaction
Business growth

32
Q

(Stakeholder) managers and employees are interested in…

A

Good, stable pay
Good working conditions
Dedicated work force
Fair hours
Roles and eponsibility

33
Q

(Stakeholder) customers are mainly interested in…

A

Value for money
Good quality
Low price
Good customer services

34
Q

Shareholders

A

Part owner for the business

35
Q

Private sector

A

Businesses are operated and owned by private individuals and companies
They are generally run for profit
E.g sole traders, partnerships, PLCs, LTDs

36
Q

Public sector

A

Businesses and organisations are run on behalf of the public usually by the government or are funded and report to the government
They are generally not run for profit - exist to provide goods and services to the unlicensed using public funds
E.g NHS, schools, police

37
Q

Third sector organisations

A

Value driven, not necessarily motivated by profit but a desire to archive social goals (public welfare)
E.g voluntary and community group, charity, social enterprises (oxfam and Red Cross)

38
Q

The private sector splits into….

A

Unincorporated and incorporated

39
Q

Unincorporated

A

Same legal identity to company / business, unlimited liability

40
Q

Incorporated

A

Owners and business are a separate legal identity, limited liability

41
Q

Sole traders

A

Start the business them selves but two or more makes a partnership. If the sole traders dies then the business tends to fail and any debts are passed on to family, unlimited liability.

42
Q

Stakeholder vs shareholder

A

Stakeholders have an interest in the business e.g customers, employees
A shareholders is a part owner e.g through shares

43
Q

How to measure business size

A

No. Employees
Amount of shares
Profit
No. Factories and shops
Value of assets

44
Q

Factors that influence business size

A

Market size and growth
Finance - ability to access resources
Nature of the product

45
Q

Reasons why a business might want to grow

A

Owners want a higher return on investments
Growth into new markets can spread risk
A bigger business is better placed to fight external risks (competition and economy)
Opportunity to gain unit cost reduction through EOS

46
Q

Why do small businesses survive

A

Customer services
No diseconomies of scale
Less likely to have large overhead bills

47
Q

External growth

A

The increase in a company is sales and profits that is a result of buying other companies or of forming a business relations with them, quickest form of growth

48
Q

Takeover

A

A type of acquisition that occurs when one organisation purchases another, usually when a large company buys a smaller one. The purchasing company is called the acquirer while the one being purchased is called the target.

49
Q

Joint ventures

A

Involves two or more businesses pooling their resources and expertise to achieve a particular goal. The risks and rewards of the enterprise are also shared.
Reasons behind joint venture :
Business expansion
development of new products or moving into new markets, particularly overseas.

50
Q

Joint venture knowledge mark

A

JV partners benefit from each others expertise and resources

51
Q

Synergy

A

Two businesses so nine and make more profit than what they made individually added together.

52
Q

Strategic alliance

A

Not as long term as a joint venture
An arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project.
Less involved and less permanent than a JV

53
Q

JV and Stategic Alliance entities

A

JV - new entity
Strategic Alliance - separate entities

A level Business OCR (4 decks)

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