Paper 1 Flashcards
1
Q
Opportunity cost
A
Benefit foregone from the next best alternative as a result of a decision
2
Q
Scientific decision making
A
Decisions made based on data and analysis
3
Q
5 influences on decision making
A
- business objectives
- organisational structures
- attitude to risk
- reliability of data
- external environment
4
Q
7 stakeholders
A
- employees
- managers
- customers
- banks
- local community
- pressure groups
- government
5
Q
market size in value =
A
volume sold x average price
6
Q
market share =
A
(a business’ sales/total market sales) x100
7
Q
4 types of market segmentation
A
- demographic
- geographic
- behavioural
- income
8
Q
4 benefits of market segmentation
A
- increase market share
- assist new product development
- extend products into new markets
- identify ways to market a product
9
Q
2 drawbacks of market segmentation
A
- difficult to identify the most important segments for a product
- ignoring other potential customers
10
Q
7p’s of the marketing mix
A
- product
- price
- process
- promotion
- people
- place
- physical environment
11
Q
quality assurance
A
checking the quality of goods and services before it’s delivered to the customer
12
Q
4 benefits of financial objectives
A
- focus for decision making
- can be used to measure success
- improve coordination
- improve efficiency
13
Q
4 limitations of financial objectives
A
- difficult to set realistic objectives
- external factors beyond control
- hard to measure
- conflict with other objectives
14
Q
4 types of financial objectives
A
- revenue, cost and profit objectives
- cash-flow objectives
- return on investment objectives
- capital structure objectives
15
Q
Contribution
A
difference between sales revenue and variable costs
16
Q
Contribution per unit =
A
selling price - variable costs
17
Q
Margin of safety
A
- difference between actual output and breakeven
- margin of safety = actual output - breakeven
- profit = margin of safety x contribution per unit
18
Q
4 causes of cash flow problems
A
- low profits
- too much production
- high receivables days ratios
- seasonal demand
19
Q
5 ways of improving cash flow
A
- overdraft
- short term loan
- debt factoring
- sale and leaseback
- sale of assets
20
Q
Hackman and Oldham model
A
- skill variety
- task identity
- task significance
- autonomy
- feedback
21
Q
ROCE ratio =
A
(operating profit/capital employed) x 100
- how much money the business has made from its money borrowed
22
Q
Outsourcing
A
subcontracting of non-core activities
23
Q
Kaplan and Nortons balanced scorecard
A
- financial perspective
- customer perspective
- learning/growth perspective
- internal process perspective
24
Q
Bowmans strategic clock
A
- low price and low added value
- low price
- hybrid
- differentiation
- focused differentiation
- risky high margins
- monopoly pricing
- loss of market share
25
Greiners growth model
- creativity
- leadership
- direction
- autonomy
- delegation
- control
- coordination
- red tape
- collaboration
- '?'
26
6 enterprise resource planning areas
- finance
- HR
- shop floor
- production planning
- inventory
- sales
27
4 key factors required to implement a strategy
- clear understanding of circumstances
- commitment
- willingness to change
- measure progress
28
Corporate governance
set of systems, processes and principles that ensures a business is managed in the best interest of all stakeholders
29
4 elements of corporate governance
- accountability
- fairness
- transparency
- responsibility
30
5 factors influenced by the political environment
- regulated markets
- enterprise
- environmental issues
- international trade
- infrastructure
31
core competencies
combination of knowledge and technical capacities that allow business to differentiate from its competitors
32
infrastructure
basic physical and organisational structures
33
enterprise
willingness to set up a business venture
34
7 key marketing objectives
- sales growth
- sales volume
- sales value
- launching new products
- entering new markets
- market share increase
- brand loyalty increase
35
price elasticity of demand =
% change in demand/% change in price
36
7 factors that affect the price of a PRODUCT
- costs
- PED
- stage of the product life cycle
- fashion
- disposable income
- niche/mass
- competitors prices
37
6 factors affecting choices when promoting a product
- target market/audience
- type of product
- technology available
- product life cycle stage
- budget available
- promotion of competition
38
cash flow
amount of money available in the business' bank to pay for day to day expenses
39
4 benefits of cash flow forecasting
- highlight when the business will be short of cash
- highlight by how much the business will be short of cash
- avoid liquidation
- help manage extra cash
40
break even point =
fixed costs/ (selling price - variable costs)
41
5 Internal influences on the choice of objectives
- size
- age
- ethics
- social responsibility
- business performance
42
5 External influences on choice of objectives
- shareholders pressure
- competitors actions
- economy changes
- government policy changes
- social changes
43
4 ways to measure marketing success
- sales growth
- market share
- customer satisfaction
- new product development
44
4 HR performance measures
- labour turnover
- labour retention
- labour cost as a % of revenue
- labour productivity
45
4 Operations performance measures
- capacity utilisation
- unit cost
- productivity
- waste rate
46
3 key areas of Elkingtons Triple Bottom Line
- Profit: Economic performance
- People: Social Performance
- Planet: Environmental performance
47
3 benefits of TBL
- Helps businesses consider stakeholders and ethics
- CSR
- Ensures sustainability
48
4 effects of inflation
- suppliers prices will increase
- wages will increase
- business can increase prices unless it's price elastic
- business can keep it prices but its profit margin will be reduced
49
7 factors influencing costs and demand
- competition
- market conditions
- income
- interest rate
- demographic factors
- environmental issues
- fair trade
50
PESTLE + C
```
POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGY
LEGAL
ENVIRONMENT
COMPETITION
```
51
why change is resisted
- self-interest
- low tolerance of change
- difficult assessment of the situation
- misunderstanding
52
how to overcome resistance to change
- education
- participation
- facilitation
- negotiation
- manipulation
- coercion
53
vertical integration
independently becoming their own parts of the supply chain
54
horizontal integration
buying more of one aspect of the supply chain e.g buying more stores to sell products
55
Core competence
Something unique a business can do strategically well
