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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

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23
Q

Customer service

A

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

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24
Q

Sales team

A

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

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25
Constraints
Limiting factors
26
Constraints of a business
Employee skills Competition The economy Finance available Legistration
27
Primary sector
Activities undertaken by directly using natural resources E.g fishing, forestry, agriculture
28
Secondary sector
Involves converting raw materials into finished goods E.g construction / manufacturing, assembly plant, goods can be finished or unfinished
29
Tertiary sector
Financial services Leisure services Transport (Accounting for 80% of the UK’s economy)
30
Stakeholders
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
(Stakeholder) shareholders and owners are mainly interested in…
Success of the business Profit Return on investment Employee and customer satisfaction Business growth
32
(Stakeholder) managers and employees are interested in…
Good, stable pay Good working conditions Dedicated work force Fair hours Roles and eponsibility
33
(Stakeholder) customers are mainly interested in…
Value for money Good quality Low price Good customer services
34
Shareholders
Part owner for the business
35
Private sector
Businesses are operated and owned by private individuals and companies They are generally run for profit E.g sole traders, partnerships, PLCs, LTDs
36
Public sector
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
Third sector organisations
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
The private sector splits into….
Unincorporated and incorporated
39
Unincorporated
Same legal identity to company / business, unlimited liability
40
Incorporated
Owners and business are a separate legal identity, limited liability
41
Sole traders
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
Stakeholder vs shareholder
Stakeholders have an interest in the business e.g customers, employees A shareholders is a part owner e.g through shares
43
How to measure business size
No. Employees Amount of shares Profit No. Factories and shops Value of assets
44
Factors that influence business size
Market size and growth Finance - ability to access resources Nature of the product
45
Reasons why a business might want to grow
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
Why do small businesses survive
Customer services No diseconomies of scale Less likely to have large overhead bills
47
External growth
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
Takeover
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
Joint ventures
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
Joint venture knowledge mark
JV partners benefit from each others expertise and resources
51
Synergy
Two businesses so nine and make more profit than what they made individually added together.
52
Strategic alliance
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
JV and Stategic Alliance entities
JV - new entity Strategic Alliance - separate entities
54
Economies of scale
When unit costs fall as output rises
55
Diseconomies of scale
Unit costs rise as output rises
56
Purchasing EOS
As a business gets bigger they can buy in bulk and benefit from bulk buy discounts
57
Financial EOS
Occurs when mass producing a good results in a lower average cost
58
Managerial EOS
Larger firms may benefit from having specialised management teams, better coordination and more efficient decision making processes
59
Technical EOS
Large-scale businesses can afford to invest in expensive and specialist capital machinery
60
Marketing EOS
A large firm can spread its advertising and marketing budget over a large output and it can purchase its inputs in bulk at negotiated discounted prices if it has sufficient negotiation power in the market
61
Risk-bearing EOS
The larger scale producer can purchase raw materials from different sources so safe guarding against strikes or crop failures
62
Concentration EOS
When firms within the same industry cluster together, they can take advantage of the existing infrastructure and supply networks

A level Business OCR (7 decks)

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