Mocks Flashcards
What is stakeholder conflict?
Refers to situation niche interests or goals of different stakeholders conflict with each other (stakeholders may be employees, customers, suppliers, community or creditors).
Examples include: Shareholders vs employees (may want company to focus on maximising profits whereas employees more concerned in job security pay and working conditions). Customers vs suppliers (customers want lowest possible price for goods and service whereas suppliers want to be paid fair price for service they provide).
What is economies of scale? Different types of this?
The process by which average cost of output deceases output increases, can happen in variety of different ways:
- Purchasing economy of scale, bulk buying of goods or service (discount on more you buy)
- Financial economy of scale, negotiating with banks larger firm will be on better position (bigger firm lower the risk and lower interest rates)
- Managerial economy of scale, employing specialist managers in different functions (more efficient no training)
- Technical economy of scale, specialist workforce and equipment purchased (increased productivity, efficient)
What are decision trees? What is net gain?
Is a form of scientific decision making that combines probability and expected pay-off to analyse uncertain outcomes. Managers make a subjective estimate based on experience or past data.
Expected value (EV) of an outcome is probability of outcome occurring multiplied by pay-off bus expected to get, to find EV of course of action add the EVs of different outcomes together.
Net gain is financial gain after initial costs have been subtracted Net gain= EV - initial costs
- Managers should usually choose course of action with highest net gain.
What’s a break even chart?
How to calculate labour turnover and productivity?
labour productivity = output per period / number of employees
labour turnover = number of staff leaving / average number of staff employed x 100
What is ansoffs matrix?
A strategic planning tool that provides framework to devise strategies for future growth, whilst also comparing level of risks involved.
Market development: this is focus on gaining position in new market with existing product (launching existing product to new group of consumers).
Market penetration: focus on gaining stronger position in existing market by customer awareness and sales (greater market share).
Diversification: strategy of moving into new markets with new products not currently in their portfolio.
Product development: strategy of introducing new products into a market which business already has presence in, will expand or reinforce portfolio in the market.
What is price elasticity?
Is how much price change affects the demand. If PED is greater than 1 product is price elastic meaning change in demand is greater than change in price. If PED is less than 1 it’s price inelastic meaning change in demand is less than the change in price.
What is a swot analysis?
A four factor model that details the strengths, weaknesses, opportunities and threats facing a business - helps managers to make strategic decisions.
The strengths and weaknesses are internal factors that business can influence whereas opportunities and threats are beyond control (external) of business so bus has to understand them in order to act appropriately such as political/legal/economic/social/tech factors.
Since SWOT analysis identifies these factors there’s overlap with functional objectives.y
What is niche marketing?
Where business targets a smaller segment of a larger market, where customers have specific needs and wants. Advantages include: charger higher price. Disadvantage risk of over dependence on single product or market.
What is inventory turnover and payable days?
Inventory turnover= costs of sales/cost of average stock held
Payables days= payables/cost of sales x365
What’s current ratio?
Current ratios= current assets/current liabilities
What’s the purpose of setting financial objectives?
direction focus
measurement of success
resource allocation
strategic decision making
investor confidence
risk management
What is a span of control?
number of people who report directly to manager.
What is labour intensive? What is capital intensive?
Labour is a method of production that relies heavily on human labour ti create goods or service. Capital is a production method that uses a lot of capital equipment and technology instead of labour.
What is the boston matrix?
A model which helps businesses analyse their product portfolio, determines which products worth investing in and which should be discounted or divested.
SQCD
Stars- high market growth and market share, in profitable growth phase and have most potential, future cash cows. competitors likely to take advantage of this growth market too so firm will need to spend a lot promoting their product to keep market share.
Question marks- all new products are question marks, they have small market share and high market growth. these aren’t profitable yet and could succeed or fail, need heavy marketing to give them a chance. bus can use question marks for brand building, harvesting or divestment.
Cash cows- have high market share but low market growth. in maturing phase, already been promoted and produced in high volumes so costs are low, bring plenty on money.
Dogs- low market share and low market growth, lost cause if not profitable , business harvest profits in the short term, if no longer making profit can be sold off.
What is e-commerce?
E-commerce is buying and selling of goods or service across the internet, eg online retailing etc.
This means business don’t have to invest that much into overhead costs such as money in stores (rent, utilities,staff) as can reach a much bigger consumer base.
Growth of e commerce given businesses greater access to international markets by translating website and offering worldwide delivery to expand markets (increased sales volume) Manufacturers can also sell directly to consumers to keep all revenue to themselves. Businesses can also track order history of customers to make personal recommendations.
Businesses are able to deal with customer complaints more efficiently to live online assistance, can deal with many customers at once. However, customers also have access to this technology as they can live up reviews on products and compare prices with similar products - thus business products and prices need to be genuinely competitive.
advantages
lower inventory costs (allows better inventory management, reduced cost as holding less).
reduced marketing cost (allows firms to reach potential customers more cost effectively through on online advertising and social media marketing)
increased operational efficiency (e commerce platforms can automate many business processes such as order processing, customer service, fulfilment leading to increased efficiency and lower operational costs.
What is finance function?
What are flexible employment contracts and examples?
FEC allow businesses to be more flexible themselves- more effective at managing change, zero contracts can help when combating sudden surges in demand. Flexible work force can be achieved through mixture of core and peripheral workers (c providing stable environment and p helping with any additional work). Flexible business may outsource some of it work to manage change such as outsourcing manufacturing while staff are being trained.
However flexi-time could result in poor communication and teamwork between staff that work at different times, making it more difficult to manage change effectively.
