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Business Studies > Introduction to Business > Flashcards

Introduction to Business Flashcards

1
Q

entrepeneur

A

a risk taker who sets up a business

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2
Q

enterprise

A

The process by which new businesses are formed in order to offer products and services in a market

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3
Q

what are the factors of production

A

land
labour
capital
enterprise

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4
Q

what is land in factors of production

A

natural resources e.g minerals+fields

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5
Q

what is labour in factors of production

A

all human resources available

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6
Q

what is capital in factors of production

A

buildings
machinery+tools
not money

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7
Q

what is the enterprise in factors of production

A

entrepreneur who organises the three other factors

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8
Q

how is bread produced using production factors

A

land-grow wheat
labour-plant wheat
capital-combine harvester
enterprise-owner of farm/bakery making a profit

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9
Q

what will happen if there is a shortage of a particular factor of production

A

price will rise

have to make up for the shortages- increase costs

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10
Q

benefits of entrepreneurship to the economy

A

create jobs

encourage innovation

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11
Q

sectors

A

primary-raw materials
seconding-production+manufacturing
tertiary-service output

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12
Q

third sector

A

want to achieve social goals

e.g charities, co-operatives

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13
Q

sole trader

A

business owned and controlled by 1 person

employs multiple people

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14
Q

advantages of sole trader

A

keep all profits

control over decisions

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15
Q

disadvantages of a sole trade

A

unlimited liability

hard to raise capital for expansion

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16
Q

partnership

A

two or more people run a business

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17
Q

what is a deed of partnership

A

legal document governs running of the business and sets out matters e.g duties of each partner

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18
Q

advantages of a partnership

A

more capitals

more skills

19
Q

disadvantage of partnership

A

share profits

slower decision making

20
Q

limited liability partnership

A

legal partnership where all partners have limited liability

21
Q

unlimited liability

A

personally responsible for all the debts

22
Q

plc

A

type of limited company where shares are sold on the stock exchange

23
Q

ltd

A

type of limited company where shares cannot be publicly trade

24
Q

limited company

A

company which has limited liability

25
Q

limited liability

A

not personally responsible for debt

26
Q

franchise

A

business (franchisor) authorizes the use of their brand name to individuals setting up their own business

27
Q

advantages of a franchise

A

franchiser can charge high prices for supplies

franchisee gets free training+less risk

28
Q

royalty payment

A

payment from franchisee to franchisor on percentage of profits made by franchisee

29
Q

what factors affect the decision to franchise a business

A

time
money
attitude toward risk
franchise are long term investments no immediate reward

30
Q

co-operative

A

business own and run my its members

profits shared between members>shareholders

31
Q

advantages of a co-operative

A

work toward a common goals,motivated

high quality service

32
Q

disadvantages of co-operatives

A

slower decisions-more member involved

investors put off by limited returns

33
Q

what factors affect the size of a business

A

market size
nature of product (standardized bigger EOS)
Personal preference (may not want to expand)
ability to access resources

34
Q

what factors determine the size of business

A

employees
offices/shops/factories
stock market value
capital employed

35
Q

advantages and disadvantages of a large business to employees

A

job security
large hr department
co-ordination difficult
feeling detached from those who make the decisions

36
Q

advantages and disadvantages of a large business to suppliers

A

large orders

over dependence on large customers

37
Q

advantages and disadvantages of a large business on shareholders

A

more market power,higher prices, dividends

managerial EOS

38
Q

advantages and disadvantages of a large business on customers

A

EOS-lower prices

DOS-higher prices

39
Q

organic growth

A

growth from within the business

40
Q

joint venture

A

separate entity created by two or more parties involving shared ownership, returns+risks

41
Q

how is a joint venture different from a merger

A

no change of ownership involved

42
Q

why would a business want to undertake a joint venture

A

share cost burden
risk spreading
share strengths
gain access to other markets

43
Q

strategic alliance

A

formal relationship between two or more companies in pursuit of a common goal

44
Q

drawback of using joint ventures

A

clash in organizational cultures
objectives of each partner might change
inbalance of resources/expertise, one has more power than other

Business Studies (14 decks)

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