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
