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IB Business And Management HL > Paper 1 Case Study > Flashcards

Paper 1 Case Study Flashcards

1
Q

Public Sector

A

Services that non-payers also benefit from, funded by taxes or the state, delivers public services (transport, education, healthcare)

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2
Q

Private Sector

A

Motivated by money, run by private individuals, legally regulated by the state and laws of the country

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3
Q

Public-Private Sector

A

High cost public infrastructure projects funded with private sector money. Normally involves a long term maintenance contract. Also known as private finance initiative

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4
Q

Aim of PPPs

A

To share skills and resources to provide public services

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5
Q

For profit commercial

A

Sole traders, partnerships, and cooperations

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6
Q

For profit social

A

Cooperatives, Microfinance providers, PPPs

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7
Q

Microfinance

A

Banking service that is provided to low income or unemployed individuals or groups who otherwise have no access to financial services

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8
Q

Microfinance providers

A

Small loan given to impoverished people to help them start a business or become employed

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9
Q

Advantages of Microfinance providers

A

Helps impoverished back on their feet, low interest rates, who don’t have resources gain access

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10
Q

Disadvantages of Microfinance providers

A

Clients may not be able to benefit from credit, large debt can occur from borrowing, higher interest than normal loans

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11
Q

Corporate social responsibility

A

As well as a priority of maximising profit, a business has legal and moral responsibilities, allowing businesses to adopt ethical code

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12
Q

Non governmental organisations (NGOs)

A

A volunteer based organisation to meet a goal for the betterment of society with no profit

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13
Q

Advantages NGOs

A

Can experiment with views, adapt to local needs, communicate on all levels, recruit anyone

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14
Q

Disadvantages NGOs

A

Workers don’t earn income, restrictions of approaching a problem or area

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15
Q

Vision statement

A

The preferred future, what an organisation would like to achieve in the long run, where they want to be

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16
Q

Mission statement

A

The present state of a company to its stakeholders and how they can reach the vision

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17
Q

Cell production

A

Mass production in teams with a focus on quantity and responsibility

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18
Q

Impact of cell production

A

Allows organisations to move away from traditional hierarchical organisation structures, allows businesses to interfere many non-financial rewards (EG: job rotation, job enrichment, teamwork etc)

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19
Q

Process of cell production

A

Adjusts mass production so workers can work in a team and be responsible for a certain part of the production line. In comparison, mass production only allows workers to carry out 1 specific tast

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20
Q

Cell production advantages

A

Often improves quality, increases productivity, and reduces production costs. Workers are more motivated than mass production even though a similar production process is taking place

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21
Q

Disadvantages cell production

A

Production could be slower which decreases total output levels

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22
Q

The key functions of management

A

Planing, organising, leading, controlling

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23
Q

The key functions of management: Planning

A

Defining the goals of the organisation and determining the activities and resources required to achieve them

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24
Q

The ley functions of management: Organising

A

Creating an organisation structure that is suitable for the achievement of of the agreed goals and objectives of the organisation

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25
Q

The key functions of management: Leading

A

Guiding and motivating others to work effectively to achieve the organisation’s goals and objectives

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26
Q

The key functions of management: Controlling

A

Checking to determine whether an organisation is progressing towards its goals and objectives and then taking corrective action if it’s not

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27
Q

Management involves:

A

Planning resources and tasks to achieve goals set, budgeting how funds will be spent, staffing - which is the process of recruiting, training, and compensating employees, organising activities to particular people to carry them out, controlling activities done such that they are. Not different from pre-planned ones

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28
Q

Management is about:

A

Making sure that resources such as time, money, HR, and equipment are used efficiently and effectively to achieve goals/tasks, the primary focus is work/tasks

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29
Q

Leadership is about:

A

Knowing what is best for an organisation and leading them in the right direction 0 thinking through the right action, being able to change

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30
Q

Leadership involves

A

Having a long term vision, motivating and empowering people, inspiring others, encouraging teamwork, listening to people and getting to the root causes quickly and effectively, mentoring by imparting knowledge and wisdom to the team and its members

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31
Q

Styles of leadership

A

Autocratic, democratic, paternalistic, laissez-faire, situational

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32
Q

Autocratic leadership

A

Leaders who take full authority and assume full responsibility over their employees. They centralise power and decision making in themselves and expect employees to do what they are told. It is typically negative based on threats and punishment, it can be positive if they choose to reward employees

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33
Q

Democratic leaders

A

Leaders who decentralise authority with decisions arising from consultation with subordinates and participation by them. Employees are informed about conditions affecting their jobs, which encourages them to express their ideas and suggestions

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34
Q

Paternalistic leadership

A

A paternal leader adopts a fatherly style, exercising the organisational power to control and protect subordinate staff, who are expected to be loyal and obedient. It is suitable for businesses with a formal hierarchical structure and where creative thinking is not solicited from staff

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35
Q

Laissez-faire or free reign leaders

A

Avoid power and responsibility, depend upon the group to establish its own goals. Useful in situations where a elder can leave a choice entirely to the group

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36
Q

Situational leader

A

Involves adjusting leadership styles depending on the abilities of subordinates. Under such leadership style, it is important for the leader to find the right balance between giving directions and providing support and respond with a style that is appropriate to the situation

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37
Q

Advantages of autocratic leadership

A

Effective in emergencies when absolute followership is needed

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38
Q

If business leaders do not change accordingly to respond to change in the global world. This may result in the following costs:

A

Reduced creativity, missed opportunities, cultural blundering

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39
Q

Subcontractor

A

An external company that is hired to carry out a task on behalf of another company. The process of hiring the external company is known as outsourcing or subcontracting.

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40
Q

Reorganisation methods

A

Outsourcing, subcontracting, offshoring, in-housing, re-shoring

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41
Q

Outsourcing (or subcontracting)

A

Transfer of internal business activities to an external business organisation

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42
Q

Offshoring

A

Similar to Outsourcing yet moving business activities overseas / abroad

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43
Q

Advantages of outsourcing (and offshoring)

A

Reduced labour and productions costs (eg: rent), improved efficiency, increase expansion into foreign markets, reduced government regulations and taxes

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44
Q

Disadvantages of outsourcing (and offshoring)

A

Complex to set up, organise, and administer, loss of jobs in the original location which leads to a lack of job security for remaining employees, loss of quality control, reputation at risk, ethical concern of exploiting foreign workers in LEDCs

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45
Q

In Housing

A

Conducting production within a company rather than relying on outsourcing

46
Q

Re-shoring

A

Opposite of offshoring, to bring back production form overseas

47
Q

Commercial marketing

A

Focuses on a customer’s needs and wants

48
Q

Social marketing

A

Focuses on Society’s wants and needs

49
Q

Two ways in which a new product can be developed

A

Product or market orientation

50
Q

What is product orientation based on?

A

The assumption that there will always be a market for the product that the firm makes

51
Q

Product orientation is driven by

A

Technological innovation, rather than a customer’s needs - it rests on the belief that if an innovative product is produced to a good quality - people will buy it

52
Q

Examples of product orientation

A

Pharmaceuticals, electronic industries

53
Q

What is market orientation based on?

A

The satisfaction through market research and analysis - they make their decisions based on what customers want and need

54
Q

In the 21st century (most common orientation method)

A

Market orientation because more companies are becoming more accomodating to customer preferences

55
Q

Distribution

A

The process of getting good from producers to customers, ensuring that products and services are available when required

56
Q

A company’s channel decisions

A

Directly effect every other marketing decision

57
Q

A company’s pricing depends on

A

Whether it uses mass merchandising or high quality specialty stores

58
Q

Distribution channels

A

Direct selling to consumer, single intermediary channel, two intermediary channel

59
Q

Advantages of market orientation

A

Reduced risk of failure, easier to anticipate changes and respond to them, easier to compete with competitors

60
Q

Disadvantages of market orientation

A

Expensive to Confucius research, difficult to meet constantly changing customer needs, uncertainty of the future effects research

61
Q

Advantages of product orientation

A

Associated with high quality products, niche market, succeeds in industries where speed of change is slow, company has control over its activities

62
Q

Limitations of product orientation

A

Risk of failure because it ignores customer needs, spending money on research and development and not consumer needs might not lead to ideal results

63
Q

Above the line promotion

A

The use of media for marketing communication with customers

64
Q

AIDA model

A

Attention, Interest, Desire, Action

65
Q

Examples of above the line promotion

A

Tv, internet, magazines, radio, billboards, cinema

66
Q

Below the line promotion

A

Not dependent on the media, refers to techniques when the marketer has some kind of control. Often, customers are offered short term purchase incentives often referred to as sales promotion techniques

67
Q

Examples of below the line promotion

A

Loyalty cards/programs, money off coupons, buy one get one half price/free, competitions, demonstrations, sponsorship, PR

68
Q

5 elements of the promotion mix

A

Advertising, personal selling, sales promotion tools, PR, Direct marketing

69
Q

Direct marketing

A

No intermediaries are involved in making a sales transaction. Mailing lists are used to inform what’s on sale, how long, and what price. EG: telemarketing

70
Q

PR

A

Activities designed to give an organisation or its products/service an image amongst all stakeholders (existing/potential customers, employees, shareholders, local community, government)

71
Q

Sales promotion tools

A

Techniques designed to stimulate customer purchases short term (EG: coupons, samples, demonstrations) they dramatise products to boost sales

72
Q

Personal selling

A

Face to face contact between buyer and seller, salesmanship, buyers can ask questions, sales people adjust their sale messages to suit the buyer

73
Q

Advertising

A

A tool used by marketers to send messages via the media to inform / influence the receivers (eg: radio, TV, newspapers)

74
Q

Stakeholders

A

Groups of people who have a particular interest in a business organisation

75
Q

Internal stakeholders

A

Groups within the business / part owners, managers, directors, employees, shareholders

76
Q

External stakeholders

A

Groups outside the business who are still impacted by it: customers, suppliers, competitors, special interest groups, government

77
Q

Penetration pricing

A

Products are priced low to attract more customers and discourage competitors. This strategy enables the firm to penetrate or capture a large share of the market quickly

78
Q

Loss leaders

A

Products priced at very low levels to attract customers. The company makes a loss on each product sold. It is expected that the loss made on a loss leader will be compensated for by profit from other products

79
Q

Price discrimination

A

When a company charges members of difference groups of consumers different prices for the same product or service

80
Q

Closing balance =

A

opening balance + net cash flow for the month

81
Q

Net cash flow =

A

Cash inflow - cash outflow

82
Q

Supplier interest

A

Regular orders and steady payments.

83
Q

Supplier

A

A person or company that provides goods and/or services to other companies as one of the contributors to the development process on the way to the ultimate customer

84
Q

Stakeholders can….

A

Belong to both the internal and external category. EG: A manager could also be a shareholder

85
Q

Share Capital

A

The money invested into a company by shareholders in exchange for shared of the company as a long term source of finance

86
Q

Loan Capital

A

Capital held by a business that has been borrowed through a long term loan

87
Q

Loan capital advantages

A

Can be secured/unsecured, the money can be used wherever the company wants, easily accessible, can be arranged quickly for a specific purpose, repayments are normally spread evenly, the provider does not share profits, you maintain ownership

88
Q

Loan Capital disadvantages

A

Mandatory repayment, higher interest rates which make it harder to afford, short term only, if interest increases so does debt, failure to repay may lead to seizure of a firm’s assets

89
Q

Personal funds advantages

A

No need to owe others, limited amount of people managing the movement of it, cheap, control over the business, more motivation, don’t have to share returns with investors

90
Q

Personal funds disadvantages

A

Possible loss of money, everyone will want some, no more funds leftover for emergencies, risky (bankruptcy), might be insufficient, rebuilding might be hard and lengthy

91
Q

Share capital advantages

A

Shareholders are usually willing to invest in business expansion, no worrying about repayment, sometimes shareholders can bring partnerships of guidance, permanent capital, no interest, not dependent on a single person

92
Q

Share capital disadvantages

A

The company doesn’t have complete control, there are more than one investor which reduces profit, time consuming

93
Q

Phycological pricing strategy

A

Sellers consider the phycology of pricing and not simply the economist. It takes account of the customer’s perception of value of the product. EG: 4.99

94
Q

Competitive (predatory) pricing strategy

A

Used by companies to undermine sales of rivals or to warn rivals not to enter a particular market. A predatory pricing strategy is illegal in many countries, (it is difficult to prove whether the low prices are the result of legitimate price competition or a deliberate act to eliminate the competition)

95
Q

Price leadership

A

Used when customers and other firms agree there is one dominant firm in market share or status. The dominant firm sets its prices and the competitors follow. If the dominant firm raises prices the other firsts follow. This results in higher profits as customers will have to pay more. This requires government regulation to protect customers

96
Q

Things to consider when looking at pricing strategies:

A

The nature of the product, the customer, the competition, short and long term impact on sales and profit , target market and revenue, financial position of the business

97
Q

Promotion is….

A

An attempt by marketers to inform consumers about a product and persuade them to purchase it

98
Q

Social marketing is…

A

Promoting specific behaviours from society ‘social good’. EG: encouraging people to quit smoking

99
Q

Market orientation focuses on

A

Customers (and their needs/wants)

100
Q

Product orientation focuses on

A

The product rather than a need (products that a business is good at developing)

101
Q

Market size

A

Total sales of all businesses in a market

102
Q

Point-of-sale promotion

A

Research into customer buying behaviour in retail stores

103
Q

Day-to-day running

A

Managing to ensure the tactical objectives fare achieved on a short term basis. A constant presence in the organisation

104
Q

Strategic decision making

A

Plans of actions that businesses use to achieve long term aims and objetives/targets. They are made based on long term planning

105
Q

Trading name

A

A business may adopt a name for a specific business unit to reflect the nature of the business which may differ from the company’s official name. They are brands butt usually go beyond a product including physical stores

106
Q

Commissioned

A

A product that is ordered by an organisation of which they are likely to receive a percentage of sales

107
Q

Cost to make

A

The monetary cost of producing essential equipment, materials etc at mid-production stage

108
Q

Cost to buy

A

The monetary cost of buying equipment, materials etc at mid production stages

109
Q

External recruitment

A

Recruiting non existent staff form outside the pool of the company

110
Q

Agents

A

Individual or organisation that acts on behalf of another organisation in a local region

111
Q

Trade agreements

A

The result of negotiations between 2 or more nations hat sets the terms of trade regarding quantities, quotas, tariffs, and sometimes pricing

112
Q

Free-market economy

A

A market economy based on supply and demand with little or no government control. A totally free market economy where buyers and sellers are allowed to transact freely (buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes subsidiaries and quotas

IB Business And Management HL (9 decks)

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