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Business A Level AQA > Miss M Al-Saad > Flashcards

Miss M Al-Saad Flashcards

1
Q

Why do businesses exist

A

Business exist for multiple reasons
- To provide goods/services that meet needs & wants of their customers
- to achieve a specific social, ethical or environmental purpose
- To create wealth for owners or other stakeholders in the business

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2
Q

What is a mission statement

A

Mission statements are long term goals that a business strive to achieve
It is a broad statement of why the business exists

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3
Q

Benefits of a good mission statement

A
  • it can be used as a marketing tool to attract customers
  • it can be used to motivate employees
  • it can attract future shareholders
  • As a starting goal for a business
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4
Q

What are objectives

A

Objectives are specific, short term goals that business want to achieve/maintain in the business
Objectives should be S.M.A.R.T (Specific, measurable, achievable, realistic & time based)

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5
Q

What does S.M.A.R.T mean in a business

A

Specific
Measurable
Achievable
Realistic
Time based

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6
Q

Objectives can be corporate and functional.
What does corporate mean

A

Corporate objectives are meant for the whole business

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7
Q

Objectives can be corporate and functional.
What does functional mean

A

Functional objectives are based in a specific financial department
They may be HR, Operations, Finance, Marketing

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8
Q

What are output levels

A

Output levels are the number of goods or services produced by a industry, company or economy in a timeframe

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9
Q

What are variable costs

A

Variable costs are things that change almost immediately depending on the levels of output

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10
Q

What are fixed costs

A

Fixed costs are costs that don’t immediately change depending on the output levels in the business

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11
Q

Examples of fixed costs

A

Insurance, Mortgage, Rent, Salaries

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12
Q

Examples of variable costs

A

Raw materials, Packaging supplies, Commissions, Salaries

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13
Q

What is capital expenditure

A

Money spent by a business or organisation on acquiring or maintaining fixed assets

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14
Q

What is revenue expenditure

A

Any money spent in the business to cover short-term expenses

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15
Q

Examples of objectives

A

To (achieve):
Specific levels of profit
Specific levels of growth
Specific levels of cash flow
Survive as a business
Social and ethical targets

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16
Q

What is revenue

A

Revenue is the total amount of money a business earns from selling goods or services.

17
Q

Cash cow products mean?

A

Products that have high market share in a low growth market

18
Q

What is a product portfolio

A

The range of products a business sells (aka the product mix)

19
Q

Benefits of a wide product portfolio

A
  • more revenue as there’s more products available for purchase
  • different products are at different stages of the product life cycle (products in growth/maturity stage can provide cash sales to develop products in the research & introduction stage)
20
Q

Problem child products mean

A

Low market share in a high growth market

21
Q

What is penetration pricing

A

Charging a low price for new product to secure a place in the market
The goal is to attract customers away from competitors by offering a lower price

22
Q

Psychological pricing

A

Charging prices below significant figures.
E.g £9.99, £19.99, £49.99

23
Q

What is Dynamic pricing

A

Businesses setting highly flexible prices for products based on current market demands

24
Q

What is revenue

A

The value of products sold during a particular period

25
Q

What is a sole trader

A
  • Owned alone
  • Finance is provided by the owner (capital)
  • Owner is entitled to ALL profit
26
Q

Advantages of sole trader business

A
  • Complete control of the business
  • more flexible
  • quicker, easier & cheaper to set up than a LTD
27
Q

Disadvantages of sole trader

A
  • Unlimited liability - personal possessions at risk if business is in debt
  • Owner is only source of capital/finance
28
Q

Disadvantages of sole trader

A
  • Unlimited liability - personal possessions at risk if business is in debt
  • Owner is only source of capital/finance

Business A Level AQA (4 decks)

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