paper 1 revision Flashcards
reasons why shop in good location
near potential target market proximity far from competitors busy area parking close to utilities near to other services
wholesaler nearby
+ can build relationships
+ variety = revenue
+ breaks bulk
+ quicker access
supplier overseas
+ cheaper as no third party
+ economies of scale
- more paperwork
- can’t check quality
advantages of batch production
flexible to meet changes in demand variety of products = more sales some variety in workers' jobs economies of scale = reduces unit costs less effect on production if machine breaks down spreads risk on multiple product
disadvantages of batch production
time lost switching machines between batches
one fault affects entire batch = waste
inventory sitting between stages
storing semi-finished goods = increases costs
repetitive work = demotivating
responses to increased competition
new products advertise / promotions lower prices merge / takeover keep costs low improving quality good customer service
effects of high interest rates
higher costs reduced demands workers may demand pay rise have to increase prices less expansion
importance of product quality
maintain customer loyalty ensures sales no need to replace faulty goods can charge high prices legal requirements
effects of high labor turnover rate
additional training costs additional recruitment costs reduction in output greater workload / lower motivation hard to maintain quality
measuring size of business
value of sales / revenue
market share
number of employees
value of capital employed
reasons for increasing taxes
generate revenue
influence level of imports and exports
reduce inflation
factors when deciding which shops to close
number of shops in area
level of demand
rents
improving cash flow
ask debtors to pay quicker
delay purchases
short term loan
benefits of being ethical
higher revenue
improved brand image
investors more likely to invest
improves employee motivation
improving internal communication
email - can look back at but may not instantly read
phone calls - feedback but may not have phone
importance of break-even
margin of safety
effect of costs or prices
expected level of profit at levels of output
helps planning
problems of expansion
access to finance need to recruit more workers cash flow problems communication problems competition legal controls
reasons for increased competition
globalisation more businesses enter the market developments in technology lower trade barriers improvement of transport
effects of higher taxation
reduced demands delayed expansion plans higher costs may need to increase prices may have to relocate / stop selling some products
advantages of changing organisational structure (delayering)
improved communications lower labour costs senior managers less remote increased delegation quicker decision making
advantages of part time employees
lower labour costs
wider range of skills
flexible working hours
piece rate
produce more
impact on quality
discourages team work
difficult to calculate individual pay
hourly wage rate
helps budget effectively
focus on quality
doesn’t encourage increased output
disadvantages of being a private limited company
can’t sell shares to the public
legal formalities
have to publish some financial accounts
shareholders expect dividends`
selling in other countries (+)
access to more markets
spreads risk
economies of scale
greater brand awareness
disadvantages of business growth
difficult to control
communication problems
slower decision making
lower motivation
improving communication between managers and workers
appropriate language
short channel of communication
suitable medium
competitive pricing
no loss in market share
resources to find competitor prices
need another way to attract customers
lower price
attract customers
may think its lower quality
revenue will increase (app)
promotion methods
advertise short term price discounts loyalty schemes sponsorship demonstrations
ways pressure groups influence actions of business
negative publicity boycotting protests legal actions petition
objectives if in private sector
maximize profits
increase market share
increase revenue
don’t find protecting jobs important
importance of revenue
day to day expenses
generate profit
measure size / success
earn a loan
problems of wide range of products
lack expertise
increased warehouse space
competitors
obsolescence
finance for inventories
ask suppliers for trade credit
overdraft
cash reserves
importance to managers of financial accounts for decision making
financial performance over time
compare with competitors
decide on source of finance
investment decisions
features of a loan
repaid interest long time to repay (app) security / liability large amounts
features of profits
no need to repay
less amount to be borrowed
importance of training
motivator
less mistakes
less complaints
fewer accidents
responding to pressure groups for littering
reduce amount of paper/material used recycling facilities use recycled material buy supplies in smaller amounts hire someone to clean rubbish
fixed costs
rent utilities insurance salaries loan repayments storage costs
barriers of communication
medium problems - wrong one, technical issues
sender problems - wrong or detailed info
receiver problems - not listening
feedback problems - no feedback
retaining workers
cheaper recruitment
employees know how business works
improves motivation
brand image
new workers
new ideas
training
difficult to find suitable employee
may bring bad habits
qualities of a new manager
good leader organised good communicator friendly knowledgeable patience responsible motivator
factors that affect accuracy of market research
wrong sample size
info out of date
dishonest opinions
poorly written questions
benefits of improving efficiency
reduces average costs less mistakes less waste fewer workers needed higher output competitive advantage
effects of globalisation
more exports cheaper labour easier to relocate build brand image increased competition loss of employees
overdraft
immediately available
repayable within 12 months
interest
shorter credit terms
improves cash inflow
may reduce demand
