paper 2 revision Flashcards
paper 2 mistakes
why person may set up their own business
made redundant own boss flexible working hours profit recognition and status creative / own ideas
advantages of part time employees
flexible hours
more hours when busy
easier to recruit
willing to accept lower pay / only work when busy
advantages of full time employees
trained
more committed
promotion
easier to communicate with
features of leaflets
cheap printing costs wide range of people can contain promotion can be kept for later use may be seen as junk (-)
features of the local newspaper
target market not seen by young people cheaper than national advertising a lot of info black and white
features of social media
free backs up reputation video and audio can be added can be targeted may be seen as fake/scam
ways break-even analysis = useful for business
sales needed for break even safety / profit margin profits/loss depending on output effect of change in price OR costs on break even persuade bank manager --> loan
roles of marketing
identify customer needs satisfy customer needs maintain customer loyalty gain information about customers anticipate changes in customer needs
importance of quality
establishes a brand image brand loyalty good reputation increases sales attracts new customers can charge a higher price ensure food safety regulations are met avoids costs of defects/waste increases market share
reasons why finance is needed
capital expenditure - machinery, owners capital insufficient
working capital - wages, output depends on it, prevents cash flow problems / illiquidity
new product - market research, outflow without inflow
start up - raw materials, not enough owners capital, time required to generate enough cash to pay for assets
quality control (-)
costs of inspector
source of fault unknown
doesn’t eliminate faulty process
high costs of fixing defects
quality assurance (+)
(define)
less customer complaints
less costs due to less defects
employees feel trusted = motivator
quality assurance (-)
expensive to train employees
rely heavily on employees
longer to produce output
application forms
wide range of written information easier to compare applicants time to review applicants may lie shows qualifications
interview
can easily assess personality tests for team work if unfriendly... increases costs can explain questions
aptitude test
cant lie about own skills
prevents unsuitable person being employed
easier to select most skillful person
expensive and time consuming
increase in minimum wage
improved motivation increased costs costs may not changed if already above minimum wage competition for workers increase in potential customers
advertisement control
may need to be changed - less attractive
if truthful - no difference
competitors have to tell truth - may increase sales
no waste plastic to landfills
increase costs to remove waste
if competitors have more waste - business has increased sales
train workers to be efficient
environmentally friendly as a goal
brand image less legal problems employees prefer it less pressure groups ... higher costs less competitive
increase market share as a goal
higher sales more dominant - influence prices ... higher costs of marketing may be higher than increase in revenue no increase in market share if market growing same as sales
survival as goal
avoid making a loss easier to achieve other objectives protects investments ... not long term may need to borrow if not making enough profit
CAD adv
less labour
greater output
improved quality
less waste
CAD dis
high costs
redundancy costs
training costs
may need to recruit skilled workers```
improving employee skills adv
lower unit costs
motivation
greater output
improving employee skills dis
higher training costs
off-the-job = disruptive
higher wages
may find new jobs with new skills
piece rate
taylors theory - money motivates higher pay for higher output higher wages quality may drop not for office staff
profit sharing
payment from dividends higher rewards maslow - belonging less control less dividends / retained profit workers may prefer cash
job rotation
less boring changes tasks more training less quality may do a job they dont like motivating until used to new tasks
reducing marketing budget
reduces advertising costs loyal customers - dont need it known brand ... falling sales competitors less market research (in home and host country)
increased investment in automated equipment
efficiency lower unit costs quality less employees ... higher costs redundancy debt training costs
cheaper supplier
lower variable costs increases profit margin ... lower quality transport costs
methods of primary research
questionnaire - cheap survey - cheap interview - face to face focus group consumer panel observation
retailers
knowledge of market sets up outlets distribution costs ... less profit less control
online selling
profit margin market research due to direct selling wider market cheaper price due to lower costs ... packaging and delivery broken in delivery access to internet fraud/hacking difficult to refund storage costs
locating in country adv
jobs incomes + tax less imports competition = lower prices competition = wider choice
locating in country dis
competition = local businesses suffer repatriation pollution depletion of natural resources less jobs if employees brought in
importance of a brand image
give the product a USP differentiate a product from competitors encourages customer loyalty higher quality product than unbranded products can charge a higher price
ways to use the internet
advertise online research competitor prices research different suppliers sell online email customers/supplier/employees pay invoices/internet banking video conferencing
benefits of a organisation chart
shows how everybody is linked together in the organisation
each individual can see their own position in the organisation
it shows the links and relationship between different departments
employees can see their position = belonging`
reasons why batch production is suitable
demand for product/size of market
nature of product
size of business
nature of demand
effect on new production line on employees
increased output = higher wages training = job satisfaction new jobs = higher wages easier job ... some may lose their jobs may not like new job lose job = lower living standard = buy less products
effect on new production line on shareholders
increased profit in LT
share price increases
…
reduced dividends in ST
effect on new production line on banks
expansion = repay loans
need additional loans
makes profit from interest on loans
…
investments takes time to increase revenue = delay in repaying loan
if fails, bank loan not returned = loss of money
bank loan as source of finance
large capital installments ... interest higher expenses collateral
lease as source of finance
no capital maintenance covered ... not business's asset expensive
retained profit as source of finance
no interest not repaid ... not enough opportunity cost
competitive pricing dis
research costs
disregard to quality
many competitors - doesnt stand out
adv of promotional pricing
getting rid of old products
help to renew interests
attracts more customers
characteristics of employees
experience in job qualifications in job polite honest reliable good communicator hard working
problems of high inventory
capital tied up costs of storage space inventory may worsen and wasted - loss of profit inventory may go out of date maintenance costs
