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business paper 1 > paper 1 > Flashcards

paper 1 Flashcards

1
Q

what is risk

A

possibility the business will have a lower than anticipated profit or experience a loss

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2
Q

what is uncertainty

A

business is unable to predict external shocks or future events

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3
Q

mass market advantages

A

wide range of customers
economies of scale

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4
Q

mass market disadvantages

A

competition is high

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5
Q

niche market advantages

A

less competition
know customers

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6
Q

niche market disadvanatges

A

smaller target audience
small market
needs to be innovative

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7
Q

benefits of branding

A

added value
brand awareness
strengthen social and ethical considerations
increased trust and loyalty
positive relationships

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8
Q

drawbacks of branding

A

harm reputation
increased pressure

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9
Q

benefits of dynamic markets

A

new customers
new competition
opportunity to be niche

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10
Q

drawbacks of dynamic markets

A

increased product and development costs
continuous marketing costs

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11
Q

online retailing benefits

A

shop from home
more accessible
saves time
wide audience

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12
Q

online retailing drawbacks

A

hacking
poor quality
less support
security
hard to access audience

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13
Q

9 factors of market change

A

economic growth
demographics
market size
economy
social
emerging markets
ethics
competition
market growth

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14
Q

porters 5 forces

A

competitive rivalry
power of suppliers
power of consumers
threat of new entrants
threat of substitutes

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15
Q

8 business objectives

A

survival
profit maximisation (shrinkflation)
sales maximisation
market share
cost efficiency
employee welfare
customer satisfaction
social objectives

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16
Q

benefits to market research

A

effective decision making
reduces costs of poor decisions
develop marketing plan
prepare for market change

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17
Q

drawbacks of market research

A

time consuming
may be unreliable

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18
Q

5 primary research methods

A

questionnaire
observations
focus group
interviews
test marketing

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19
Q

benefits of primary research

A

exact data needed
representative sample size
relate to business

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20
Q

drawbacks of primary research

A

time consuming
expensive
sample bias

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21
Q

benefits of secondary research

A

easy and quick to access
easier to analyse and interpret

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22
Q

drawbacks of secondary research

A

less relevant
lack accuracy

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23
Q

market segmentation benefits

A

increase revenue
increase loyalty
specific target marketing

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24
Q

market segmentation drawbacks

A

expensive to adapt
limited production
high marketing costs

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25
Q

market mapping benefits

A

see perceptions compared to competition
identify gaps in market
show USPs
identify competitive rivalry

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26
Q

market mapping drawbacks

A

moment in time
relies on primary research

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27
Q

10 porters generic strategies

A

price leadership
added value
innovation
reliability
reputation
quality
advertising
branding
convenience
customer service

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28
Q

8 factors effecting demand

A

changes in price of substitutes
complementary goods
changes in incomes
fashions, tastes + preferences
advertising and branding
demographics
external shocks
seasonality

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29
Q

5 factors effecting supply

A

cost of production
introduction of new technology
indirect taxes
government subsidies
external shocks

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30
Q

design mix

A

function
aesthetics
cost (economic manufacture)

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31
Q

5 waste reduction

A

waste minimisation
re-use
re-cycle
up-cycle
ethical sourcing

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32
Q

6 promotion mix

A

above the line advertising
below the line advertising
direct marketing
personal selling
public relations
sponsorship

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33
Q

promotion pros and cons ?

A

short or long term
product life cycle
cost
can success be measured

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34
Q

4 types of branding

A

manufacture / corporate branding
product branding
own label branding
rebranding

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35
Q

3 branding to reflect social trends

A

viral marketing
social media
emotional branding

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36
Q

6 pricing strategies

A

cost plus pricing
price skimming
competitive
penetration
predatory
psychological

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37
Q

cost plus pricing benefits

A

easy
protects profit margins

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38
Q

cost plus pricing drawbacks

A

ignores market conditions
ignores competition

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39
Q

price skimming benefits

A

high profits
creates a brand

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40
Q

price skimming drawbacks

A

decreases barriers to entry
works well to competitors

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41
Q

competitive pricing benefits

A

customer loyalty

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42
Q

competitive pricing drawbacks

A

risk wars
risk loss

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43
Q

penetration pricing benefits

A

catch competition off guard
minimises cost focus

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44
Q

penetration pricing drawbacks

A

competitors retaliate
customers leave

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45
Q

predatory pricing benefits

A

deters new entrants

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46
Q

predatory pricing drawbacks

A

customers leave
illegal sometimes

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47
Q

psychological pricing benefits

A

appears in lower price bracket

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48
Q

psychological pricing drawbacks

A

demand for even lower prices
feel manipulated

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49
Q

direct distribution benefits

A

collect data on habits
faster delivery
build relationships
respond to feeback

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50
Q

direct distribution drawbacks

A

distribution is complex
harder to find products

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51
Q

indirect distribution benefits

A

share shipping and storage costs
benefit from third party

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52
Q

indirect distribution drawbacks

A

slower delivery
shared profits

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53
Q

5 stages in product lifecycle

A

development
introduction
growth
maturity
decline

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54
Q

extension strategies

A

updating packaging
adding value
adapting product
new market
advertising
reduce price

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55
Q

4 elements of Boston matrix

A

star
cash cow
question mark
decline dog

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56
Q

whats a star on boston matrix

A

high market share
high market growth

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57
Q

whats a cash cow on boston matrix

A

high market share
low market growth

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58
Q

whats a question mark on boston matrix

A

low market share
high market growth

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59
Q

whats a decline dog on boston matrix

A

low market share
low market growth

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60
Q

benefits of boston matrix

A

decide what needs investment
review product portfolio

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61
Q

drawbacks of boston matrix

A

too simple
could be in middle of category

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62
Q

3 customer loyalty

A

customer service
loyalty cards
saver schemes

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63
Q

inelastic demand values

A

in between 0 and 1

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64
Q

elastic demand value

A

greater than 1

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65
Q

benefits of using PED

A

decide staffing
inventory
predict cash flows and profits

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66
Q

4 factors effecting PED

A

availability of substitutes
frequency of purchase
necessities
luxury goods

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67
Q

luxury good values

A

above +1

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68
Q

normal good values

A

above 0

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69
Q

inferior good values

A

less than 0

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70
Q

benefits of using YED

A

predict and plan price changes
aids budgeting
helps production

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71
Q

profit =

A

sales revenue - total costs

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72
Q

sales revenue =

A

selling price x quantity sold

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73
Q

market share =

A

business sales / total market sales (x100)

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74
Q

percentage change =

A

difference / original (x100)

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75
Q

price elasticity of demand =

A

%change in demand / %change in price

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76
Q

income elasticity of demand =

A

%change in demand / %change in income

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77
Q

market growth =

A

(market size now / market size in past) - 1 (x100)

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78
Q

4 motivational theories

A

taylor
herzberg
maslow
mayo

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79
Q

taylor’s theory

A

time and motion studies
financial incentives
piecework

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80
Q

herzberg theory

A

hygiene factors - absence demotivates but presence doesn’t motivate
motivating factors - non-financial

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81
Q

maslows theory

A

hierarchy of needs

  1. self actualisation (top)
  2. self esteem
  3. social needs
  4. safety needs
  5. basic needs. (bottom)
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82
Q

mayos theory

A

Horthorn electrical plant
social needs
team-working

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83
Q

5 financial incentives

A

piecework
commission
bonus
profit share
performance related pay

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84
Q

piecework benefits

A

efficiency
more experienced benefit

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85
Q

piecework drawbacks

A

increased pressure
decreased quality

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86
Q

commission benefits

A

benefits hard workers
pay for work done

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87
Q

commission drawbacks

A

less income security
high risk
quality suffers

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88
Q

bonus benefits

A

increased motivation
increased productivity

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89
Q

bonus drawbacks

A

damage moral
employees may demand

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90
Q

profit share benefits

A

motivation
loyalty
tax

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91
Q

profit share drawbacks

A

not mandatory
not guaranteed
impacts profits

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92
Q

performance related pay benefits

A

focus morale
benefits relationships

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93
Q

performance related pay drawbacks

A

competitive
demotivate if unrealistic goals

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94
Q

8 non-financial incentives

A

delegation
consultation
empowerment
flexible working
job enrichment
job enlargement
job rotation
team working

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95
Q

delegation benefits

A

builds trust
engagement between works
focus tasks

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96
Q

delegation drawbacks

A

quality suffers
additional training costs

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97
Q

consultation benefits

A

promote problem solving
workers feel involved

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98
Q

consultation drawbacks

A

views not used
no credit to employees

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99
Q

empowerment benefits

A

improves trust
encourages creativity
gives feedback

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100
Q

empowerment drawbacks

A

job insecurity
managers become uncomfortable

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101
Q

team working benefits

A

increased productivity
less competition
individual strength

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102
Q

team working drawbacks

A

wastes time

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103
Q

flexible working benefits

A

cope with demand fluctuations
extend opening hours

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104
Q

flexible working drawbacks

A

poor quality
lack of communication

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105
Q

job enrichment benefits

A

challenging
learn new skills
workers more involved

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106
Q

job enrichment drawbacks

A

more workload
decreases productivity

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107
Q

job enlargement benefits

A

increased responsibility
career growth
improve skillset

108
Q

job enlargement drawbacks

A

more work but same pay

109
Q

job rotation benefits

A

less boredom
skilled in all areas

110
Q

job rotation drawbacks

A

poor quality
training costs and time

111
Q

10 flexible workforce

A

multiskilling
part-time
temporary
flexible hours
home working
outsourcing
permanent
full time
shift work
0 hour contract

112
Q

multiskilling benefits

A

less staff
interesting

113
Q

multiskilling drawbacks

A

don’t specialise in one thing

114
Q

part time benefits

A

same benefits pro rata
cost effective

115
Q

part time drawbacks

A

inflexible

116
Q

temporary benefits

A

meet seasonal demand and shortages

117
Q

temporary drawbacks

A

expensive
training

118
Q

flexible hours benefits

A

valuable staff

119
Q

flexible hours drawbacks

A

confuse customers
need extra staff to cover

120
Q

home working benefits

A

saves money
flexible
no travel costs

121
Q

home working drawbacks

A

no socialisation
quality decreases

122
Q

outsourcing benefits

A

less full / part time workers

123
Q

outsourcing drawbacks

A

more expensive
less control

124
Q

permanent benefits

A

job security
relationships
development

125
Q

permanent drawbacks

A

get bored
limit earning

126
Q

full time benefits

A

parental and holiday leave
life ensurance

127
Q

full time drawbacks

A

reduced flexibility
run out

128
Q

shift work benefits

A

less stress
avoid traffic

129
Q

shift work drawbacks

A

sleep alignment
employee comparison rises

130
Q

0 hour contract benefits

A

flexibility
unpredictable business

131
Q

0 hour contract drawbacks

A

no commitment
job insecurity

132
Q

whats collective bargaining

A

negotiations between workers and representatives (trade unions)

133
Q

recruitment process

A

Job analysis
Job description
Person specification
Advertise the job
People apply
Short list
Interview
Selection

134
Q

internal recruitment benefits

A

lower costs
know candidates
improved promotion

135
Q

internal recruitment drawbacks

A

no new ideas
reduces talent pool
cause friction

136
Q

external recruitment benefits

A

more talent available
more applicants
new ideas

137
Q

external recruitment drawbacks

A

higher costs
can’t assess in work environment

138
Q

induction training benefits

A

settle in quick
likely to stay
get to know colleagues

139
Q

induction training drawbacks

A

takes time
decreases productivity

140
Q

on the job training benefits

A

more confidence
familiar equipment
familiar environment

141
Q

on the job training drawbacks

A

pass on bad habits
lacks time and depth

142
Q

off the job training benefits

A

delivered by specialists
new ideas
qualifications

143
Q

off the job training drawbacks

A

expensive
less productive
not specific

144
Q

3 types of organisational structure

A

tall
flat
matrix

145
Q

tall structure benefits

A

clear accountability
progression opportunities
more control
less workload

146
Q

tall structure drawbacks

A

confused messages
expensive

147
Q

flat structure benefits

A

clear communication
positive relationships

148
Q

flat structure drawbacks

A

saves money
less promotion
lots of responsibilities

149
Q

matrix structure benefits

A

increases morale
utilises skills

150
Q

matrix structure drawbacks

A

co-ordination problems
conflicts of interest
stretches staff

151
Q

centralised organisation benefits

A

economies of scale
buy in bulk
specialisation
advertising costs spread

152
Q

centralised organisation drawbacks

A

slower decision making
not flexible
demotivating

153
Q

decentralised organisation benefits

A

flexible
motivating
fast decision making

154
Q

decentralised organisation drawbacks

A

lack of consistency
no economies of scale

155
Q

4 types of leadership

A

autocratic
democratic
lassiez-faire
paternalistic

156
Q

autocratic leadership benefits

A

clear chain of command
clear directive leadership
quick decision making

157
Q

autocratic leadership drawbacks

A

demotivates
ignores creative solutions
relies on competency
culture dependent

158
Q

democratic leadership benefits

A

feel valued
growth and development
idea benefits
high skilled employees

159
Q

democratic leadership drawbacks

A

decisions take time
depends on employee skills
unreliable staff

160
Q

laissez-faire leadership benefits

A

suitable for creativity
encourages growth, development + innovation
fast decisions

161
Q

laissez-faire leadership drawbacks

A

lack supervision
avoid responsibility
blame culture

162
Q

paternalistic leadership benefits

A

employee loyalty
low employee turnover
effective for low skilled workers

163
Q

paternalistic leadership drawbacks

A

wrong decisions cause demotivation
doesn’t use skills and knowledge
dictatorial

164
Q

5 entrepreneurial roles

A

innovation
expanding a business
risk and reward
creating + setting up a business
barriers to entrepreneurship

165
Q

4 ways for setting up a business

A
  1. market research
  2. project trials
  3. business plan
  4. grow business
166
Q

5 barriers to entrepreneurship

A

entrepreneurial capacity
access to finance
lack of training
fear of failure
lack of confidence

167
Q

6 entrepreneurial characteristics

A

creativity
hard working
resilient
initiative
self-confidence
risk taking

168
Q

6 entrepreneurial skills

A

communication
team working
problem solving
organisation
numeracy
IT

169
Q

2 Financial motives

A

profit maximisation
profit satisficing

170
Q

5 non-financial motives

A

independence
flexibility
ethical reasons
social purpose
personal challenge

171
Q

whats limited liability

A

owner and business are separate

172
Q

whats unlimited liability

A

owner and business are the same

173
Q

sole trader advantages

A

privacy
easy to set up
keep all profits

174
Q

sole trader disadvantages

A

difficult to finance
fully responsible
less free time

175
Q

partnership advantages

A

shared workload
split cost
more ideas and skills

176
Q

partnership disadvantages

A

disagreements
shared profits

177
Q

private limited company advantages

A

flexible management
better to raise money
owner has control

178
Q

private limited company disadvantages

A

high set-up costs
hard to find shareholders
division of ownership

179
Q

public limited company advantages

A

tax efficient
flexible management structure

180
Q

public limited company disadvantages

A

vulnerable to take overs
high set up costs

181
Q

franchisee benefits

A

lower risk
get support
predictable set-up costs
marketing benefits

182
Q

franchisee drawbacks

A

shared profit
less independence
strict operating rules
expensive

183
Q

franchisor benefits

A

fast growth
cheaper
take away risk
more motivated

184
Q

franchisor drawbacks

A

shared profit
damage reputation
high supporting costs
franchisees get merchandise elsewhere

185
Q

online business benefits

A

easy to set up
accessible
paypal process transactions
managed from home

186
Q

online business drawbacks

A

hacking
security

187
Q

whats a social enterprise

A

business trading for social or environmental purposes to help society in some way

188
Q

whats a lifestyle business

A

aim to grow big enough for a return on investment and provide great quality of life

189
Q

whats an opportunity costs

A

cost of foregoing the next best alternative

190
Q

whats a trade-off

A

having less of one thing in exchange for more of another

191
Q

5 factors converting entrepreneur to leader

A

learning to delegate
trusting others
listening to others
less reactive
emotional intelligence

192
Q

BRIC Economies - growing economies

A

brazil
russia
india
china
south africa

193
Q

MINT Economies - emerging economic giants

A

mexico
indonesia
nigeria
turkey

194
Q

implications of economic growth

A

changes in employment patterns
diversify away from primary sector
capital intensive production

195
Q

growth for business

A

more disposable income
opportunities to move into more markets
low labour costs

196
Q

4 indicators of economic growth

A

GDP
Literacy
Health
HDI

197
Q

specialisation advantages

A

economies of scale
more resources
more productive
competitive advantage
GDP growth

198
Q

specialisation disadvanatages

A

overeliant so don’t spread risk
hard to compete if others cheaper
diseconomies of scale

199
Q

FDI benefits

A

employment opportunities
more disposable income
boost economy
multiplier effect

200
Q

FDI drawbacks

A

ethics
communication issues
exchange rates
redundancies

201
Q

Trade liberalisation benefits

A

lower prices
broader range of goods available
diversifies risk
increased competition
benefits poorer countries

202
Q

trade liberalisation drawbacks

A

dependent on industrial nations
increased competition
over cultivation of land

203
Q

whats trade liberalisation

A

relaxation of tariffs and barriers

204
Q

What does the World trade organisation (WTO) do

A

deal with trade rules

205
Q

whats General agreement on tariffs and trade (GATT) do

A

ensure countries keep agreements they made

206
Q

political change benefits

A

new jobs
low labour costs
trade benefits
comparative advantage

207
Q

8 factors increasing globalisation

A

trade liberalisation
political change
significance of global companies
increased investment flows
reduced cost of transport and communication
migration
growth of global labour force
structural change

208
Q

whats protectionism

A

theory or practice of shielding countries domestic industries from foreign competition

209
Q

tariffs benefits

A

domestic goods are cheaper
job security
allows to sell more as price advantage
reduced in strategic trade deals

210
Q

tariffs drawbacks

A

some products don’t put off customers
may just increase costs
other countries may retaliate

211
Q

quotas benefits

A

protects jobs
act as bargaining chip
protect strategic industries
more protective as predictable

212
Q

quotas drawbacks

A

fewer export countries
higher prices as countries retaliate
complex
difficult to measure degree of protection

213
Q

government legislation benefits

A

prevents fake imports
conform to safety regulations
increased customers trust

214
Q

government legislation drawbacks

A

every import can’t be checked
don’t protect against all fakes
profits from fakes fund organised crime

215
Q

subsidy benefits

A

production increase
more jobs so tax paid back to government
first mover advantage
economies of scale

216
Q

subsidy drawbacks

A

retaliation from other countries
encourage unprofitable, inefficient business activity

217
Q

4 methods of protectionism

A

tariffs
quotas
government legislation
subsidies

218
Q

trading bloc benefits

A

access huge markets
free movement of goods and people
reach wider audience

219
Q

trading bloc drawbacks

A

stop access to other trade blocs so limits markets
WTO prefers deals with wide range of nations

220
Q

trading bloc business opportunities

A

freedom to trade
enlarged market
protection from international competition
free movement of people

221
Q

trading bloc business drawbacks

A

developed countries dominate
kill off domestic nations
become standardised
reduce identity

222
Q

2 pull factors

A

economies of scale
risk spreading

223
Q

2 push factors

A

saturated market
domestic competition

224
Q

offshoring benefits

A

lower minimum wage
access trade blocs
tax benefits
larger talent pool

225
Q

offshoring drawbacks

A

damage reputation
increase management cost
reduce efficiency
expose business to corruption

226
Q

outsourcing benefits

A

flexibility
lower costs
get experts
focus on core business

227
Q

outsourcing drawbacks

A

loss of control
increased costs
quality issues

228
Q

5 factors for country as a market

A

level of disposable income
ease of doing business
infrastructure
political stability
exchange rates

229
Q

9 factors for country as a production location

A

costs of production
labour force skills and availability
infrastructure
trading bloc
government incentives
ease of doing business
political stability
natural resources
return on investment

230
Q

joint venture benefits

A

access to knowledge and resources
new opportunities in markets and distribution
shared workload
spread risk and finances
shared professional skills

231
Q

joint venture drawbacks

A

50% fail
different cultures
imbalance of power
loss of patents

231
Q

global mergers benefits

A

economies of scale
reduced competition
spread risk
new skills

232
Q

global mergers drawbacks

A

high initial costs
diseconomies of scale
clash of cultures
role duplication so redundancies

232
Q

global competitiveness benefits for MNCs

A

economies of scale
scope for best quality sources
closer to customers
diversify risk
more knowledge

233
Q

2 ways to gain competitive advanatge

A

cost leadership
differentiation

234
Q

global marketing benefits

A

economies of scale
lower marketing costs
market power as known brand
consistency in brand image
leverage good ideas quickly and efficiently
uniformity of marketing

235
Q

global marketing drawbacks

A

differences in needs and wants
different responses
different wage patterns
differences in development
competitive environment
legal environment

236
Q

glocalisation benefits

A

access to larger markets
compete more effectively
more demand for customers as familiar

237
Q

glocalisation drawbacks

A

small businesses struggle to compete
no economies of scale
complex to adapt

238
Q

3 global marketing methods

A

ethnocentric
polycentric
geocentric

239
Q

whats ethnocentric marketing

A

no attempt to adapt

240
Q

whats polycentric marketing

A

products adapted and marketed to each country

241
Q

whats geocentric marketing

A

promote global brand but still slightly tailor products

242
Q

ethnocentric marketing benefits

A

economies of scale
lower development costs

243
Q

ethnocentric marketing drawbacks

A

doesn’t suit markets
less sales

244
Q

polycentric marketing benefits

A

right for market
higher sales

245
Q

polycentric marketing drawbacks

A

higher research and development costs

246
Q

geocentric marketing benefits

A

attract higher sales

247
Q

geocentric marketing drawbacks

A

higher product development costs

248
Q

global niche market benefits

A

less competition
customer loyalty
premium prices
reduced risk
reduces PED
reduces average costs

249
Q

global niche market drawbacks

A

global niche market drawbacks

250
Q

cultural / social considerations

A

cultural differences
differing tastes
language barriers
unintended meanings
inappropriate translations
inappropriate branding

251
Q

what is ethnocentrism

A

tendency to view own cultures and ethics superior

252
Q

MNC’s positive effects on local economy

A

employment
increases skills base
increases standards of living
raises countries profile
improves balance of payments
improves infrastructure

253
Q

MNCs negative effects on local economy

A

profit leakage to base country
low paid jobs
pull out quickly
poor safety record
increases urbanisation
widen poverty gap
local businesses unable to compete
negative environmental damage

254
Q

6 MNCs impacts on national economy

A

foreign direct investment
balance of payments
technology and skills transfer
impact on consumers
impact on cultures
impact on tax revenues

255
Q

5 ethical issues

A

shareholder conflicts
pay and working conditions
supply chain considerations
environmental conditions
marketing considerations

256
Q

4 ways of controlling MNCs

A

political influence
legal control
pressure groups
social media

257
Q

political influence benefits

A

smoother trading
less troublesome
help trade and set up as wish for approval

258
Q

political influence drawbacks

A

bribes
weak governments ignore as bring wealth

259
Q

legal control benefits

A

laws can be passed at any point
protects consumers rights

260
Q

legal control drawbacks

A

MNCs might move
may still break laws
deter laws as need wealth
MNCs can afford good legal defence
costs MNCs to abide

261
Q

pressure groups benefits

A

raises public awareness of unethical activities
quickly alert large groups
set up boycotts
change MNCs to prevent PR issues

262
Q

pressure groups drawbacks

A

needs to be large and organised to have impact
large MNCs counter or quieten groups

263
Q

social media benefits

A

orchestrate boycotts
raise awareness
ensure greater transparency
creates social authority to challenge power

264
Q

social media drawbacks

A

not always believed
MNCs may dust itself down
only short-term effects
people move on quickly

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