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Business > Introduction To Business > Flashcards

Introduction To Business Flashcards

1
Q

Franchise

A

When you buy the right to sell the established product

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2
Q

Enterprise

A

Another word for a business

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3
Q

Entrepreneur characteristics

A

Risk taker
Persistence
Self belief and confidence
Creative
Comfortable with risk
Leadership skills

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4
Q

Private sector

A

Run for profit owned by individuals and companies

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5
Q

Public sector

A

Run on behalf of public, not run for profit
Eg teachers army police NHS

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6
Q

Third sector

A

Value driven
Eg charities ,cooperatives ,community groups

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7
Q

Unincorporated

A

The owner is the business
Soletrader, partnership

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8
Q

Incorporated

A

Legal difference between business and owners
PLC, LTD

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9
Q

Limited liability partnership

A

Partnership with limited liability
Owners are called members

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10
Q

Unlimited liability

A

If a business fails and goes into debt, personal assets can be taken to pay for debt

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11
Q

+ - for franchiser

A

+
Low cost to expand
Products under franchiser control
Carefully selected applicant

  • Control issues
    Cost of supporting
    Possibility of conflict
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12
Q

+- to franchisee

A

+lower risk
+advice and training
+marketing
+easier to obtain finance

-profit is shared
-fees (royalty payments)
-supplies have to be bought from franchiser
-less independence
-can’t sell franchise

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13
Q

4 factors of production

A

Land
Labour
Capital
Enterprise

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14
Q

Adding value

A

Difference between price of finished product and cost of inputs in making it
Output - inputs

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15
Q

How to add value

A

Building a brand
Delivering excellent service
Product features and benefits
Offering convenience
Reduce costs

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16
Q

Benefits of adding value

A

Charge a higher price
Create a point of difference from competition
Focus on target market

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17
Q

Accounting and finance

A

Manage money in and out, set budgets, chase debt

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18
Q

Operations management

A

Managing the process of creation of goods and services

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19
Q

Marketing

A

Communicate product to potential customers

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20
Q

HRM

A

Job analysis and staffing, training, organisation

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21
Q

Customer service

A

Meet expectations of customers

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22
Q

Sales and support services

A

Support customer before and after product is purchased

23
Q

Constraints of a business

A

Environment
Legislation
Competition
Economy

24
Q

Cooperatives

A

A business owned and run by its members (employees and customers)
Profits are shared between members

25
Q

Cooperatives advantages

A

Legally straightforward to establish
Limited liability
Higher quality of service
Loyal customers

26
Q

Cooperatives disadv

A

Capital is limited
Weak management
Slower decision making
Employees may want more

27
Q

Benefits of multinationals

A

Significant employment and training
Adds to GDP
Increased competition and consumer choice
Increased tax rev

28
Q

Drawbacks of multinationals

A

Domestic business may not be able to compete
Tax avoidance
Could damage domestic business
Too powerful

29
Q

How do small businesses still survive

A

Low costs
Good quality of service
Unique
More manageable
No DEOS

30
Q

Organic growth

A

Growth within the business

31
Q

Organic growth adv

A

Lower risk
Slower - sensible rate
Builds on existing activities
Good for high growth markets
Rewards innovation
Financed through internal funds

32
Q

Organic growth disadv

A

Growth dependant on growth of overall market
Hard to build market share
Slow growth

33
Q

External growth

A

Growth from outside the business

34
Q

External growth adv

A

Higher risk
Faster
Transformational
Higher potential returns
Open new markets

35
Q

External growth disadv

A

Greater risk
Greater cost
Lose control

36
Q

Forward integration

A

Acquiring business further up supply chain
Supplier buys business

37
Q

Backward integration

A

Acquiring business operating earlier in supply chain
Business buys supplier

38
Q

Horizontal Intergration

A

Acquire business in same stage in supply chain

39
Q

Conglomerate (diversification)

A

No clear connection to the business buying it

40
Q

Merger

A

Two businesses join together to form new business

41
Q

Merger adv

A

Increase market share
Eos
New markets
More knowledge

42
Q

Merger disadv

A

Loss of control
Extra costs
Redundancies if needed
Split profits
Demotivation

43
Q

Joint ventures

A

Two or more businesses pooling their resources and expertise to achieve particular goal - new entity is formed

44
Q

Joint venture adv

A

Share costs
Share skills
Eos

45
Q

Joint venture disadv

A

Conflict
Risk of losses
Objectives may change

46
Q

Strategic alliance

A

Arrangement between 2 companies to undertake mutually beneficial project while each retains its independence - separate entities

47
Q

Strategic alliance adv

A

Gain new client base
Competitive skills
New business markets
Additional income
Increase capital
Reduce risk
Affordable

48
Q

Strategic alliance disadv

A

Often better off at end
Legal disputes over who owns what
Expensive
Difficult to coordinate

49
Q

Synergy

A

Value of two businesses brought together is higher than sum of two individual businesses

50
Q

Aims

A

Overall target - long term

51
Q

Mission statement

A

Overriding goal of the business and reason for its existence

52
Q

Corporate objectives

A

Cover range of key areas

53
Q

Functional objectives

A

Specific functions of business

54
Q

Business unit / individual target

A

More focused on individual

Business (8 decks)

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