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Business Paper 1 > Paper 1 > Flashcards

Paper 1 Flashcards

1
Q

Opportunity cost

A

Benefit foregone from the next best alternative as a result of a decision

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2
Q

Scientific decision making

A

Decisions made based on data and analysis

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3
Q

5 influences on decision making

A
  • business objectives
  • organisational structures
  • attitude to risk
  • reliability of data
  • external environment
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4
Q

7 stakeholders

A
  • employees
  • managers
  • customers
  • banks
  • local community
  • pressure groups
  • government
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5
Q

market size in value =

A

volume sold x average price

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6
Q

market share =

A

(a business’ sales/total market sales) x100

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7
Q

4 types of market segmentation

A
  • demographic
  • geographic
  • behavioural
  • income
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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
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9
Q

2 drawbacks of market segmentation

A
  • difficult to identify the most important segments for a product
  • ignoring other potential customers
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10
Q

7p’s of the marketing mix

A
  • product
  • price
  • process
  • promotion
  • people
  • place
  • physical environment
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11
Q

quality assurance

A

checking the quality of goods and services before it’s delivered to the customer

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12
Q

4 benefits of financial objectives

A
  • focus for decision making
  • can be used to measure success
  • improve coordination
  • improve efficiency
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13
Q

4 limitations of financial objectives

A
  • difficult to set realistic objectives
  • external factors beyond control
  • hard to measure
  • conflict with other objectives
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14
Q

4 types of financial objectives

A
  • revenue, cost and profit objectives
  • cash-flow objectives
  • return on investment objectives
  • capital structure objectives
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15
Q

Contribution

A

difference between sales revenue and variable costs

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16
Q

Contribution per unit =

A

selling price - variable costs

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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
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18
Q

4 causes of cash flow problems

A
  • low profits
  • too much production
  • high receivables days ratios
  • seasonal demand
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19
Q

5 ways of improving cash flow

A
  • overdraft
  • short term loan
  • debt factoring
  • sale and leaseback
  • sale of assets
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20
Q

Hackman and Oldham model

A
  • skill variety
  • task identity
  • task significance
  • autonomy
  • feedback
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21
Q

ROCE ratio =

A

(operating profit/capital employed) x 100

  • how much money the business has made from its money borrowed
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22
Q

Outsourcing

A

subcontracting of non-core activities

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23
Q

Kaplan and Nortons balanced scorecard

A
  • financial perspective
  • customer perspective
  • learning/growth perspective
  • internal process perspective
24
Q

Bowmans strategic clock

A
  1. low price and low added value
  2. low price
  3. hybrid
  4. differentiation
  5. focused differentiation
  6. risky high margins
  7. monopoly pricing
  8. loss of market share
25
Q

Greiners growth model

A
  • creativity
  • leadership
  • direction
  • autonomy
  • delegation
  • control
  • coordination
  • red tape
  • collaboration
  • ’?’
26
Q

6 enterprise resource planning areas

A
  • finance
  • HR
  • shop floor
  • production planning
  • inventory
  • sales
27
Q

4 key factors required to implement a strategy

A
  • clear understanding of circumstances
  • commitment
  • willingness to change
  • measure progress
28
Q

Corporate governance

A

set of systems, processes and principles that ensures a business is managed in the best interest of all stakeholders

29
Q

4 elements of corporate governance

A
  • accountability
  • fairness
  • transparency
  • responsibility
30
Q

5 factors influenced by the political environment

A
  • regulated markets
  • enterprise
  • environmental issues
  • international trade
  • infrastructure
31
Q

core competencies

A

combination of knowledge and technical capacities that allow business to differentiate from its competitors

32
Q

infrastructure

A

basic physical and organisational structures

33
Q

enterprise

A

willingness to set up a business venture

34
Q

7 key marketing objectives

A
  • sales growth
  • sales volume
  • sales value
  • launching new products
  • entering new markets
  • market share increase
  • brand loyalty increase
35
Q

price elasticity of demand =

A

% change in demand/% change in price

36
Q

7 factors that affect the price of a PRODUCT

A
  • costs
  • PED
  • stage of the product life cycle
  • fashion
  • disposable income
  • niche/mass
  • competitors prices
37
Q

6 factors affecting choices when promoting a product

A
  • target market/audience
  • type of product
  • technology available
  • product life cycle stage
  • budget available
  • promotion of competition
38
Q

cash flow

A

amount of money available in the business’ bank to pay for day to day expenses

39
Q

4 benefits of cash flow forecasting

A
  • 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
Q

break even point =

A

fixed costs/ (selling price - variable costs)

41
Q

5 Internal influences on the choice of objectives

A
  • size
  • age
  • ethics
  • social responsibility
  • business performance
42
Q

5 External influences on choice of objectives

A
  • shareholders pressure
  • competitors actions
  • economy changes
  • government policy changes
  • social changes
43
Q

4 ways to measure marketing success

A
  • sales growth
  • market share
  • customer satisfaction
  • new product development
44
Q

4 HR performance measures

A
  • labour turnover
  • labour retention
  • labour cost as a % of revenue
  • labour productivity
45
Q

4 Operations performance measures

A
  • capacity utilisation
  • unit cost
  • productivity
  • waste rate
46
Q

3 key areas of Elkingtons Triple Bottom Line

A
  • Profit: Economic performance
  • People: Social Performance
  • Planet: Environmental performance
47
Q

3 benefits of TBL

A
  • Helps businesses consider stakeholders and ethics
  • CSR
  • Ensures sustainability
48
Q

4 effects of inflation

A
  • 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
Q

7 factors influencing costs and demand

A
  • competition
  • market conditions
  • income
  • interest rate
  • demographic factors
  • environmental issues
  • fair trade
50
Q

PESTLE + C

A 
POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGY 
LEGAL
ENVIRONMENT
COMPETITION
51
Q

why change is resisted

A
  • self-interest
  • low tolerance of change
  • difficult assessment of the situation
  • misunderstanding
52
Q

how to overcome resistance to change

A
  • education
  • participation
  • facilitation
  • negotiation
  • manipulation
  • coercion
53
Q

vertical integration

A

independently becoming their own parts of the supply chain

54
Q

horizontal integration

A

buying more of one aspect of the supply chain e.g buying more stores to sell products

55
Q

Core competence

A

Something unique a business can do strategically well

Business Paper 1 (6 decks)

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