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A LEVEL BUSINESS > Paper 1- Theme 1.5 Entrepreneurs and Leaders (& design mix) > Flashcards

Paper 1- Theme 1.5 Entrepreneurs and Leaders (& design mix) Flashcards

1
Q

Define business

A

An organisation that exists to provide goods and services on a commercial basis to customers

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2
Q

Define goods

A

tangible products

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3
Q

Define services

A

Intangible products

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4
Q

Enterprise

A

skills and abilities to take risks and create profits

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5
Q

Define entrepreneur

A

Person who organises operates and assumes the risk for a business venture

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6
Q

Benefits of business to society

A
  • employment
  • drive innovation through R&D
  • pay taxes to government on profits
  • create wealth among society (investment returns)
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7
Q

Only doing entrepreneurial motives and characteristics and business objectives flash cards for 1.5 as in test

A

Shush

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8
Q

Characteristics of an entrepreneur

A
  • determination and perseverance
  • passion
  • resilience
  • ability to cope with risk
  • courage
  • creative
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9
Q

define skill and characteristic

A

skill= ability to do something well

Characteristic= feature of someone’s personality

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10
Q

Define risk

A

Risk= probability that things will not go as planned

e.g. the chance invested money is lost

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11
Q

Define uncertainty

A

when businesses are unable to predict external shocks or future events

e.g. spontaneous recession, global pandemic

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12
Q

Skills needed by entrepreneurs

A
  • persuasive abilities- need to persuade others to do think like supply goods on credit, work harder and more productively
  • problem solving skills- investigate possible causes of problems
  • financial skills- ability to read and understand key documents (like cash flow forecasts)
  • networking skills- able to turn acquaintances into business friends and benefit from their networks as well (including based crowdfunding or social media endorsement)
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13
Q

Motives for becoming an entrepreneur

A
  • Profit maximisation
  • profit satisficing -enough profit to be satisified
  • ethical stance- morally correct behaviour meeting ethical beliefs
  • social entrepreneurship- support cause rather than make a profit
  • independence- ur own boss, make own decisions
  • home working and flexible hours- easy to maintain, work life balance in control
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14
Q

Define leadership

A

relationship through which one person influences the behaviour or actions of other people

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15
Q

Importance of leadership

A

Source of inspiration
Better working environment
Provide direction (everyone aligned on objectives and aims)
Build effective teams

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16
Q

Barriers to entrepreneurship

A

Personal- risk averse, lack of self esteem, gender

Economic- taxation, market energy regulations

Financial- lack of start up capital

Political- unstable political landscape

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17
Q

Define intrapreneurship

A

Involves people within a business creating or discovering new business opportunities that leads to new parts of or even a new business being created

e.g gmail

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18
Q

Why encourage intrapreneurship

A

Create innovation within business
Motivate employees
Diversification
Encourage collaboration inside business

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19
Q

How to protect a business from uncertainty

A
  • keep excess cash supplies
  • reduce no of creditors, increase number of debtors
  • diversify
  • foster agility in decision making and actions
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20
Q

How to mitigate risk

A

Calculated risks
Diversify to spread risk
Persist through adversity

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21
Q

Define mission statement

A

Overriding goal of the business that provides a vision for the future, and usually considers then purpose of the business

good if motivate staff, is relevant for all stakeholders, differentiates from competitiors

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22
Q

Define aim

A

aim- long term plan from which objectives are derived

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23
Q

Define objective

A

Objective- target derived from goals, that must be achieved in order to realise the aim (All should be SMART)

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24
Q

Purpose of objectives

A

Provide direction
Motivate employees
Reduce uncertainty
Can measure performance

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25
Q

Define corporate objectives

A

overall business targets that translate down into each department of function

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26
Q

Define functional objectives

A

more specific objective that feeds into each corporate objective, focus on a specific function of the business (HR, operations, finance, marketing)

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27
Q

factors that influence the objectives made

A 
position in market (amount of competition)
size of business
state of economy
age of business
political factors
28
Q

Define a sole trader business

A

Business owned and controlled by one person

  • unlimited liability
  • may be one or two employees, but makes final decision
29
Q

Advantages and disadvantages of sole trader

A

Pros

  • owner benefits from all profits
  • no administrative costs to pay (low start up costs
  • own boss- personal hours

Cons

  • unlimited liability
  • hard to take time off for any reason
  • limited finance availability
30
Q

Define partnership

A

where (2-20) people share ownership as well as the equal responsibility for management, losses and profits

uses deed of partnership- states how profits are split, how much each partner invested and rules if a partner wanted to leave

31
Q

Advantages and disadvantages of partnerships

A

Pros

  • each partner contributes skills
  • share workload

Cons

  • unlimited liability
  • possible clash of interest and so conflict
32
Q

Define a ltd

A

Private limited company

  • company where shares are sold privately with permission of the majority of shareholders (not on stock market)
  • limited liability
  • 2 to 20 owners and at least one director
33
Q

Advantages and disadvantages of ltd

A

Pros

  • limited Liability
  • shares kept within trusted circle (no risk of hostile takeover)
  • profits are often retained

Cons-

  • Harder to source funding
  • limited to 50 shareholders
  • corporation tax needs paying to be limited
34
Q

How entrepreneurs come up with ideas

A
  • personal experience (habits, interests)
  • market research (e.g market mapping)
  • business experience (insight to what works)
  • observations (look for things like poor customer service)
35
Q

Define plc

A

a company, with limited liability, that is able to raise capital by selling shares on the stock market

36
Q

Advantages and disadvantages of plc

A

Pros

  • float stocks
  • larger scale of production
  • higher legal status- benefit from publicity

Cons

  • need 50,000 of share capital raised to be considered
  • shareholders lose control and less profits
  • Shareholders may disagree (may lead to divorce of ownership and control)
  • shareholders are short termist, want high share value and profits as dividends
37
Q

Define social enterprise

A

Business that trades to tackle social problems, improve communities, people’s life challenges and the environment

38
Q

Advantages and disadvantages of social enterprise

A

Pros

  • access grants from government
  • can gain customers from being ethically and socially beneficial
  • can do good for society

Cons

  • lack of funding from investors who want quick returns
  • rely solely on donations, may be hard to sustain
39
Q

Define a company

A
  • organisation owned by investors (shareholders)
  • separate legal entity to owner
  • controlled by managers
40
Q

Define dividend

A

payment of profits from company to shareholders

-not paid if company not in profit
usually paid dividend per share and in the company’s financial cycle

41
Q

Define lifestyle business

A

aim to provide a great quality of life for owner

  • started to profit satisfice
  • work on projects something you enjoy
  • live how they want (working time schedule, location)
  • risky to start up, more pressure and commitment
42
Q

Define an online business

A

-a company set up and run online

  • lower financial risks as can be tested online for success
  • limitless scalability
  • hard to engage in food customer service
  • sometimes lack of trust and credibility issues with new customers
43
Q

Roles of an entrepreneur

A
  • creating and starting up a business
  • expand and grow business
  • provide a product or service
  • provide employment
  • take calculated risks to gain possible returns
44
Q

Define franchise

A

business model that sells the legal rights to use their brand identity (name, logo), products and processes

(allows franchisee to sell a product or service under business name of the franchisor)

45
Q

Define franchisee

A

someone who buys the right from a franchisor to copy their business format and sell their p/s

46
Q

Define franchisor

A

someone who sells their franchise (license) to a franchisee to allow them to trade using the brand or business format

47
Q

Define royalties

A

percentage of total business profits made, given from franchisee to franchisor

(in order to use their business concept)

48
Q

Pros and cons for a business starting a franchise (franchisor)

A

Pros

  • receive royalties and initial franchise fee from franchisee
  • expand quickly and cost efficiently (can be geographically)
  • use economies of scale for mass advertising and buying power as increase number of stores
  • low risk of success (only 6-7% of franchises fail)

Cons

  • loss of control
  • risk of damaging brand name
  • profits shared
49
Q

Pros and cons for a franchisee opening a franchise

A

Pros

  • existing customer base (brand is known and established)
  • take advantage of mass advertising and training
  • easier to attract finance

Cons

  • lack of freedom and control (over supplies, rules, design)
  • pay royalties and large initial fee
  • hard to scale up
  • can be ended by franchisor without notice
50
Q

define a market

A

any place that buyers and sellers come together to exchange goods or services at a price

51
Q

Define marketing

A

meeting the needs and wants of the customer, using a combination of the 4 p’s (product, place, promotion and price)

-target the right product for the right target market

52
Q

what is a marketing strategy

A

A plan of how you’re going to achieve your marketing objective (feeds into corporate objective)

53
Q

Define market orientation

Pros and cons

A

•outward looking approach to new product development, focus on consumer needs and wants

-adapts product based on needs (using market research)

Pros
- more likely to produce a product the customer would buy

Cons

  • hard for dynamic markets
  • costly, time consuming
54
Q

Define product orientation

Pros and cons

A

inward looking approach to new product development, focus on what products can be made and the production process

Pros

  • possible first mover advantage
  • more money spent on product not market research

Cons
- may not be a market or demand for this product

55
Q

Define marketing mix

A

Combination of factors to help the business take into account the customers needs when selling a product

Factors are product, price, place, promotion

56
Q

Define design mix

A

Way in which all aspects of a products design (function, aesthetics, economic manufacture) are considered

57
Q

Define the design mix fixtures

A

Function
-way in which a product performs in a way to do the job they were designed to do

Aesthetic
-degree of beauty or style as perceived by the user (some people as a differentiating feature)

Economic Manufacture
-must be capable of being manufactured at a cost below selling price (so it’s viable and makes a profit)

58
Q

define social trends in terms of the design mix

A
  • way society as a while behaves and the values that determine behave
  • can alter importance of each design mix feature
59
Q

How social trends have changed the design mix

A

•Resource depletion

  • designed so consumption is sustainable (not affecting long term supplies by currently making products)
  • less scarce materials (as cost more)

•waste minimisation
- eliminate waste before it’s produced or reduce its quantity or toxicity

• recycling

  • reuse or recycle different parts
  • may be a trade off for function or aesthetics

•ethical sourcing

  • not damaging lives of employees that gather raw resources
  • customers boycott buying products made in sweat shops or using child labour
60
Q

Pros and cons of Being ethical

A

Pros

  • protect natural world
  • competitive advantage (charge premium)
  • positive PR

Cons

  • costly to implement
  • ppl may see through “fake” marketing strategies
  • may not receive monetary benefits short term
61
Q

Define opportunity cost

A

Cost of missing out on the next best alternative when making a decision

62
Q

Define a trade off

Examples

A

negative consequence as a result of a business choice made

e.g. choice of less market research for a lower cost has the trade off of less successful new product launch

63
Q

Factors deciding decision making of starting up a new business

A
  • the potential sales of the idea
  • cash needed for the idea
  • whether the timing (in the market) is right
  • whether the entrepreneur and the staff have the skills needed for the idea to work
64
Q

Opportunity costs in developing a new business idea

A

Personal opportunity costs

  • entrepreneur sacrifice their own regular income
  • investment may be at expense of personal assets
  • long hours may sacrifice social time

Opportunity costs of one business idea opposed to another

  • miss out on potential sales of other
  • cost of launch and investment restrict other investment opportunities
65
Q

Difficulties that entrepreneurs face when becoming a leader

A
  • learning to delegate power and roles
  • trusting others
  • listening to other ideas
  • developing an emotional intelligence

A LEVEL BUSINESS (20 decks)

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