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A-Level Business > Paper 1 > Flashcards

Paper 1 Flashcards

1
Q

What is market mapping?

A

Finding the variables that differentiate brands in the market

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2
Q

What are the strengths of market mapping? [3]

A

-Can find a gap in the market
-Identify customer needs
-Helps a business reposition themselves if needed

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3
Q

How can businesses compete other than price? [5]

A

-Added value
-Branding
-Quality
-Innovation
-Convenience

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4
Q

What is demand?

A

The amount of goods people are willing and able to buy

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5
Q

What factors lead to changes in demand? [acronym + one other]

A

PIGPO and external shocks

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6
Q

What does PIGPO stand for?

A

P-Population
I-Income
G-Government
P-Personal tastes
O-Other products

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7
Q

What are examples of external shocks?

A

War and Inflation

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8
Q

What are complementary goods?

A

Goods that consumers purchase together

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9
Q

What is supply?

A

The quantity of a good or service that a producer is willing to make available

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10
Q

What factors affect supply? [acronym + one other]

A

TWICT and external shocks

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11
Q

What does TWICT stand for?

A

T-Technology
W-Weather- product availability
I-Industrial Relations- relationship with staff
C-Cost of production
T-Taxes and Tariffs

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12
Q

What is the equilibrium price?

A

When supply and demand are equal

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13
Q

When does disequilibrium occur?

A

When a price is set at a point where supply and demand aren’t equal

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14
Q

What is PED? [2]

A

-It measures the responsiveness of demand to a change in price
-It can be elastic or inelastic

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15
Q

What does the term “elastic mean? [2]

A

-Demand for the product/service is sensitive to price change
-The value is higher than 1

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16
Q

What does the term “inelastic” mean? [2]

A

-If the price changes, demand stays the same
-The value is between -1 and 1

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17
Q

What is the formula for PED?

A

PED = % change in quantity demanded/ % change in price

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18
Q

What are the factors influencing PED? [3]

A

-Availability of substitutes
-Whether it’s a necessity or luxury good
-Strength of brand

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19
Q

What is the relationship between PED and revenue?

A

If the price of an elastic product increases, demand falls, therefore revenue falls

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20
Q

What are inferior products?

A

Products/services where demand decreases when consumer income increases (value below 0)

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21
Q

What are luxury goods?

A

Products/services where demand proportionally increases when consumer income increases (value above 1)

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22
Q

What are normal goods?

A

Products/services where demand increases when consumer income increases (value above 0)

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23
Q

What is the formula for YED?

A

YED = % change in quantity demanded/ % change in income

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24
Q

How does YED effect business decisions?

A

If incomes rise, businesses may:
-Promote their products more
-Produce more normal goods

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25
Q

What are the factors that influence YED? [2]

A

-Availability of substitutes
-Whether the product is a an inferior, normal or luxury product

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26
Q

What is the design mix?

A

A range of features that are important when designing a product

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27
Q

What are the 3 aspects of the design mix? And where are they located on the triangle?

A

-Function- top
-Cost- bottom left
-Aesthetics- bottom right

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28
Q

Explain function [3]

A

-The product must be functional
-Should be designed so maintenance is carried out easily
-Must be safe

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29
Q

Explain aesthetics

A

The size, appearance, shape etc, must be considered as it will affect consumer choices

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30
Q

Explain cost [2]

A

-Must select materials and processes that will minimise costs
-Environmental trends mean businesses now design for: waste minimisation, re-use and recycling

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31
Q

What are six types of promotion explained?

A
  1. Personal Selling-Sales people
  2. Direct Marketing-Targeted emails
  3. Above The Line- Mass media (e.g. TV, Radio)
  4. Below the Line- Smaller reach (e.g. Leaflets, Posters)
  5. Public Relations- PR is building a relationship with the public by creating a good image
  6. Sponsorship- An affiliation with a celebrity or sport
32
Q

What are 2 types of sale promotions

A

-Price discounts
-Coupons

33
Q

What are the six types of pricing?

A

-Cost plus
-Skimming
-Competitive
-Penetration
-Predatory
-Psychological

34
Q

What is cost plus pricing?

A

Pricing the product a certain margin above your costs (the cost to make plus extra)

35
Q

What is price skimming?

A

Price is set high, then is later reduced

36
Q

What is competitive pricing?

A

Products are priced in line with competitors

37
Q

What is penetration pricing?

A

Setting prices low, then raising them once consumers like them

38
Q

What is predatory pricing?

A

-Happens in oligopolies
-Businesses hold off new ones by lowering their own prices, so that new businesses cant make a significant profit

39
Q

What is psychological pricing?

A

Setting prices lower than a whole number to make the product appear cheaper

40
Q

What are oligopolies?

A

Markets with a few large businesses

41
Q

What are the factors that affect business pricing? [5]

A

-USP
-PED
-Level of competition
-Strength of brand
-Stage in product life cycle

42
Q

What are the stages of the product life cycle in order? [4]

A
  1. Introduction
  2. Growth
  3. Maturity
  4. Decline
43
Q

What are the 2 ways a business treats it’s employees?

A

As an asset or a cost

44
Q

What are ways a business treats asset employees? [3]

A

-Incentives
-Higher pay
-Better working conditions

45
Q

What are ways a business treats cost employees? [3]

A

-Lower pay
-Less flexibility
-No training

46
Q

What are the pros of training employees? [2]

A

-Inspires employees
-Good training reduces the number of employees that leave

47
Q

What are the cons of training employees? [2]

A

-Can cause an information overload
-Takes time

48
Q

What are the 5 organisational structures?

A

Tall, Flat, Centralised, Decentralised, Matrix

49
Q

What is a tall structure? [3]

A

-Many layers of management
-Long chain of command
-Small span of control

50
Q

What is a flat structure? [2]

A

-No hierarchal levels
-Wide span of control

51
Q

What are the pros of a tall structure? [3]

A

-Clear promotion structure
-Higher degree of supervision
-Provides clear and distinct layers with obvious lines of responsibility

52
Q

What are the cons of tall structures? [3]

A

-Communication is more difficult
-Decision making takes longer
-More expensive due to additional layers

53
Q

What are the pros of flat structure? [4]

A

-Higher visibility for all employees
-Better communication
-Faster decision-making
-Promotes autonomy

54
Q

What are the cons of flat structure? [3]

A

-Lack of progression opportunities
-Higher workload for managers
-Less supervision

55
Q

What is a matrix structure? [3]

A

-Teams report to multiple team leaders
-Open communication between teams
-Two chains of command

56
Q

What are the pros of a matrix structure? [2]

A

-Improved decision making
-Improved communication

57
Q

What is the con of a matrix structure?

A

Confusing regarding roles, responsibilities and priorities

58
Q

What is a centralised structure? [2]

A

-Business decisions are made at the top of the business and distributed down the chain of command
-Wide span of control

59
Q

What are the pros of a centralised structure? [2]

A

-Encourages efficiency
-Clear leadership

60
Q

What are the cons of a centralised structure? [2]

A

-Limited communication
-Lack of flexibility

61
Q

What is a decentralised structure? [2]

A

-Decisions are made by managers and subordinates
-Narrow span of control

62
Q

What are the pros of a decentralised structure? [2]

A

-Efficient communication
-Employee autonomy

63
Q

What is the con of a decentralised structure?

A

Branches may compete with each other

64
Q

What is one financial motivator?

A

Piecework- paying employees for every piece of work they complete

65
Q

What are 4 non financial motivators?

A

-Consultation- employees become apart of decision making process
-Empowerment- employees have more power to delegate to others
-Team working
-Job enrichment- giving employees a wider variety of tasks that are higher skilled

66
Q

What are the 4 types of leadership with explanations?

A

-Autocratic- Managers make decisions with little to no input from employees
-Democratic- Employees help in decision making process
-Paternalistic- Dominant figure who makes the right decisions for employees
-Laissez faire- Employees carry out activities and make decisions freely

67
Q

Who created scientific management where employees were provided with proper tools and training and incentives for good performance?

A

Taylor

68
Q

Who’s theory was based around human relationships?

A

Mayo

69
Q

Who created the hierarchy of needs?

A

Maslow

70
Q

Who created the 2 factor theory that argues there are 2 factors (motivation and hygeine) that cause job satis/dissatisfaction?

A

Herzberg

71
Q

What are the roles of an entrepreneur in order with explanations? [5]

A
  1. Setting up the business- market research, business plan
  2. Running the business- supplies, organising staff, complaints
  3. Expanding the business- organic or inorganic
  4. Innovation
  5. Anticipating risk and uncertainty
72
Q

What does the term “intrapreneurship” mean?

A

Employees who think like an entrepreneur

73
Q

What are 3 barriers to entrepreneurship?

A

-Lack of job security
-Lack of capital
-Lack of knowledge

74
Q

What are 3 objectives that businesses set?

A

-Sales maximisation
-Cost efficiency
-Customer satisfaction

75
Q

Define opportunity cost

A

The value of the loss of the next best alternative foregone

A-Level Business (3 decks)

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