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OCR Business A Level > Introduction To Business > Flashcards

Introduction To Business Flashcards

1
Q

What is enterprise?

A

Another word for business.

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2
Q

What is an Entrepreneur?

A

Name given to a person starting a business.

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3
Q

What are the 4 factors of a business?

A
  • Accounting and Finance
  • Marketing
  • Operations
  • Human Resources
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4
Q

What is involved in Accounting and Finance?

A
  • Keeps detailed records of all products made and sold, cost of goods sold and tax due
  • responsible for ensuring costs under control.
  • sufficient funds to pay day to day basis
  • set budget to control business
  • operate business payroll
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5
Q

What is involved in marketing?

A
  • meeting the needs of the consumers: market research
  • inform customers in manner that creates the desire to buy
  • customer service
  • TV ads
  • lack of product knowledge can lead to customers losing interest and gain poor publicity.
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6
Q

What is involved in operations

A

-Design and control process of production
- maintenance on equipment, stock control, quality control and manage tech changes
- production and operations management

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7
Q

What is involved in Human Resources?

A
  • responsible for the well being of employees (recruitment, training etc)
  • time and money to department depending on the size of the business
  • motivate workforce & ensure business complies with the employment legislation
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8
Q

What are the 4 factors of production?

A
  1. Land- natural resources
  2. Labour- effort humans contribute
  3. Capital- machinery, tools and buildings
  4. Entrepreneurship- combine land, labour and capital in new ways
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9
Q

What is a stakeholder?

A

An individual or a group of people who share an interest in the business

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10
Q

What is a constraint on a business?

A

It is a restraining factor that limits how a business operates

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11
Q

What are the 4 business sectors?

A
  1. Primary Sector
  2. Secondary Sector
  3. Tertiary Sector
  4. Quaternary Sector
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12
Q

What are the 2 sectors that businesses can be categorised into?

A

Private and Public

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13
Q

What is a private sector?

A

It is set up by individuals and is profit oriented

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14
Q

What is a public sector?

A

It is run by the local or central government and it provides a service.
It doesn’t aim to make a profit, however it still has to be cost effective.

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15
Q

What is a third sector organisation (TSO)?

A

They can be charities, community groups and social enterprises and they are there to achieve social goals

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16
Q

What is a sole trader?

A

They own the business and make all the decisions affecting it. They could employ a number of people but they are still in overall control.

17
Q

What is the advantage of being a sole trader?

A
  • full control
  • simplicity: fewer legal formalities and is straightforward
  • tax benefits: profits taxed at personal income
  • privacy: fewer reporting requirements maintaining greater privacy about their finances
  • direct relationship with customers: lead to better customer service and loyalty.
18
Q

What are the disadvantages to being a sole trader?

A
  • unlimited liability: personally responsible for all business debt, putting personal assets at risk
  • limited capital: raising funds can be more challenging as options typically limited to personal savings and loans
  • workload: burn out and lead to poor performance
  • limited expertise: lack the diverse skill set needed to manage all aspects of the business effectively
  • difficulty in expansion: growing bis can be hard due to resource constraints and limited access to capital
19
Q

What is a partnership?

A

2 or more people that run the business together

20
Q

What are the advantages to a partnership?

A
  • easy to establish
  • more partners mean more capital
  • shared work for different skill sets
21
Q

What are the disadvantages to a partnership?

A
  • slower decision making
  • losses and profits are shared
  • legal restrictions on the maximum number of partners
    Business lacks capital for expansion
22
Q

What is a franchise?

A

The right given by one business to another to sell goods using its name

23
Q

What are the advantages to a franchise?

A
  • establish brand
  • training and support
  • reduced risk
  • collective buying power
  • market support
24
Q

What are the disadvantages to a franchise?

A
  • lack of control
  • variable performance
  • reputation can be at risk
  • renewal and exit challenges, exiting a franchise is complex
25
Q

What is a co-operative?

A

A business owned and run by its members

26
Q

What are the advantages to a co-operative?

A
  • members are in control
  • community focus
  • lower costs
  • shared benefits (dividends)
27
Q

What are the disadvantages to a co-operative?

A
  • slower decision making
  • member commitment
  • market competition
  • complex structure, not clear of communication and management
28
Q

What is a shareholder?

A

Part owners of a private or public limited company

29
Q

How do you measure business size?

A
  1. Turnover and profit
  2. Market shares
  3. Number of employees
  4. Number of shops or factories
  5. Capital employed
30
Q

What are the factors affecting the size of the business?

A
  1. Size of market
  2. Nature of product
  3. Personal preference
  4. Ability to access resources for expansion
31
Q

What is a takeover?

A

One company buys control over the other

32
Q

What is a merger?

A

Two companies agree to join together and create a new company

33
Q

What is involved in a merger?

A
  • boost new company brand. Allow strengths to be brought to new company
  • new business take large slice of market
  • ensure economies of scale achieved
34
Q

What is a horizontal merger?

A

Company in direct competition and share the same product line and market

35
Q

What is a vertical merger?

A

Companies are in different stages of productions and they may merger with its suppliers

36
Q

What is a congeneric takeover?

A

Companies serve the same consumers but in different ways

37
Q

What is a market extension merger?

A

Companies sell same product but in different markets

38
Q

What is a product extension merger?

A

Companies sell different but related products in the same market

39
Q

What is a conglomerate merger?

A

Companies that have no common business area

OCR Business A Level (3 decks)

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