Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business paper 3 > Paper 3 Knowledge > Flashcards

Paper 3 Knowledge Flashcards

1
Q

3 factors affecting demand

A
  • Price of Substitutes / complementary goods
  • Seasonality
  • External shocks (Legislation, new competition, natural disasters)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Describe a Supply and demand graph with directions of shifts

A

Y Axis = Price
X Axis = Quantity

Demand = Negative Gradient
Supply = Positive gradient

Left = decrease
Right = Increase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

3 Factors affecting Supply

A
  • Change in cost of production (Left or right)
  • New Technology (Right)
  • Gov Subsidies (Right)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the 3 areas of the design mix and describe

A

Function
- Benefits that a product/service provides

Aesthetics
- Design, style and appearance of product

Cost
- All production costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

3 ways to design products to meet social trends

A
  • Waste minimisation
  • Products designed to be recycled
  • materials sources ethically
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Above the line vs Below the line promotion

A

Above the line
- Promotion involving any type of advertising through the media (TV, radio, billboards etc)

Below the line
- forms of promotion that dont involve advertising
(Sales promotions, PR (sponsorships),)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the purpose of promotion?

A

Method a business uses to communicate with its customers / potential customers/.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are 3 influences on promotion?

A

Target Audience
- This changes which methods will be effective

Technology
- Can be used to only reach the target audience

Promotion budget
- Determine which methods can be used

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a brand

A

represents the personality and characteristics of a business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

3 ways to build a brand

A
  • Exploiting a USP
  • Advetisinng
  • Social Media
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

3 benefits of a brand

A
  • Adds value to product
  • builds trust
  • recognisable product
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

types of brand

A

Manufactures brand
- Kellogg’s

Own-label brands
- retailer brands (Sainsbury’s crisps)

Generic brands
- Products with no brand association (carrots)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is viral marketing

A

A method of promotion that relies on an audience sharing and pushing the message of a product or service.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are 3 influences on price (price the business set)

(Marketing mix)

A

Costs
- What profit margins is the business looking for

PED
- Potential for a business to change the price

Product Life Cycle
- the stage of the life cycle that the product is in

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the 6 pricing strategies?

A
  • Skimming
    High then lower with demand
  • Penetration
    Low to enter then raise once market share high
  • Cost Plus
    Add percentage to unit costs
  • Predatory
    So low that rivals cant afford to compete
  • psychological
    price to make it look cheaper than it is
  • Competitive
    setting price based on nearest competitor
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is personalised pricing?

A

Technology used to collect customer information and then target them with a personal price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Who are the 5 potential parties in a distribution network?

A

Manufacturer
- Factory that creates the product

Agents & Brokers
- Link buyers and sellers

Wholesalers
- Take bulk qualities from suppliers and distribute to retailers

Retailers
- Provide customers with specialised service and sell

Consumer
- Using the product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

2 influences on distribution

A

Scope/scale
- Product sold internationally may require more parties in the network

Control over Pricing & Promotion
- A business may use its own network if this is important

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is Direct selling

A

Direct sale from manufacturer to consumer
- eg Ecommerce (Coca cola)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is an entrepreneur and what do they do

A

Someone who takes a financial risk to set up and grow a business

  • Innovate and Invent
  • Take risks
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are 3 barriers to an entrepreneurs success?

A

Red Tape
- Legal barriers

Lack of Finance

Lack of entrepreneurial skills

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What are the 4 forms of business ownership +/-

A

Sole Trader
-> Self employed person that owns 100% of the business
+ Easy and free to start
- Unlimited liability
- Long hours

Partnerships
-> Multiple owners of a business
+ Serve a larger audience
- Unlimited liability
- shared profits

LTD
-> owned by private shareholders
- Long incorporation process
+ Limited liability

PLC
-> large business, shares owned by the public
+ Easy to raise finance
- Lots of legal parameters
- £50,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is franchising? +/-

A

Limited company that licences the right for individuals or groups to use their branding and supply chain.

+ Up front payment and royalty payments
- Risk of damaged brand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What are 3 other forms of business

A

Social Enterprises
- not-for-profit organisations (charities)

Lifestyle business
- A business run to sustain a particular lifestyle for the owners

Online Business
- ecommerce

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is stock market floatation?

A

Money generated from selling shares when a company goes public

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

How much does it cost to go public?

A

£50,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Effects of share price rises and falls. 2 for each

A

+ Employees could receive bonuses
+ Easier to raise capital

  • Vulnerable to takeover
  • Harder to raise capital
28
Q

What is opportunity cost?

A

Benefit lost from not selecting the next best alternative

29
Q

What is a trade off?

A

Giving up one thing in order to have another

30
Q

3 methods to help business decisions

A

Investment Appraisal
- Determining wether an investment is worthwhile

Comparing advantages and disadvantages

Risk vs reward
- is the risk worth the reward

31
Q

3 difficulties to an entrepreneur becoming a leader

A

Sharing Control

Increased stress

Different skillset (compassion and personal skills)

32
Q

3 reasons to stay small

A

Flexibility
- faster decisions and changes

Costs
- Lower running costs

Personal service
Easier to provide a personal service to customers

33
Q

What is Sales Forecasting?

2 approaches

A

Using a range of techniques and information to predict future sales

  • Market research (surveys and reports)
  • Backdata (time series analysis) -> predating further sales based on past sales figures
34
Q

3 drawbacks to sales forecasting

A

Volatile consumer tastes and preferences

Quality of the data
- accuracy could vary dramatically

External shocks
- changing commodity prices, wars / political stability

35
Q

Fixed costs vs variable costs

A

Fixed costs
- Dont change with level of output

Variable costs
- Change directly with level of output

36
Q

What is contribution?

2 formulas (contribution and total contribution)

A

Returns a business makes from each unit sold.

Contribution = selling price - variable cost per unit

Total contribution = total output x contribution per unit

36
Q

Short run vs Long run

A

Short Run
- Immediate future
- Variable costs are variable and fixed costs are fixed

Long Run
- Long Term
- All costs are variable as fixed costs will change over time (even fixed costs such as Mortgage & salaries)

37
Q

Break even definition and formula

A

Point where costs = revenue

B-E point = Fixed Costs / Contribution per unit

38
Q

What is the margin of safety?

A

Difference between break even and current output

39
Q

2+ and 2- of break even analysis

A

+ Simple and easy
+ Break even point is helpful when making decisions

  • Oversimplifies
  • Costs are rarely constant so inaccurate
40
Q

Historical vs zero based budgeting

A

Historical
- time series analysis (Backdating)

Zero based budgeting
- opportunity costs of all decisions is deciding factor - all spending must be justified

41
Q

What is variance?

A

Difference between budgeted and actual figure

42
Q

Gross, net (profit for year) and operating

How do you do the margins?

A

Gross -> Revenue - COGS

Net -> Revenue - total costs

Operating -> Gross - Operating expenses

(Type of profit / Revenue) x 100%

43
Q

What is a statement of comprehensive income>

A

Document stating businesses income and expenditures over time

44
Q

What is profitability?

A

A measure of business profit relative to expenses

45
Q

Cash vs Profit

A

Cash
- Liquid money available within the business

Profit
- Money a business makes after all expenses are paid

46
Q

What is a statement of financial position? (balance sheet)

A

Financial document recording all assets and liabilities of a business

47
Q

What is liquidity?

A

Ability of a business to pay short term financial obligations with cash

48
Q

Current ratio, acid test ratio & Working capital formula

A

Current
Current assets / Current liabilities

Acid
(Current assets - Inventory) / Current liabilities

Working
Current Assets - Current liabilities

49
Q

3 ways to improve liquidity

A
  • Delay payments
  • Encourage cash sales
  • Short term loans
50
Q

Types of economies of scale

4 internal

2 external

A

Internal (Business)
- Purchasing (Bulk Buying)
- Technological (Better tech)
- Financial (better interest rates)
- Managerial (Employ specialists)

External (Industry)
- Labour (Build up win skilled labour force
- Cooperation (Firms work together and collaborate)

51
Q

3 Impacts of diseconomies of scale

A

Communication Problems
- harder to communicate clear messages

Flexibility
- Harder to adapt to business environment as longer decision making

Motivation
- Such a larch business employees struggle to see their impact

52
Q

What is Overtrading?

A

When a business grows so quickly that they have to overstretch their financial resources.

53
Q

Takeover vs merger

A

Takeover
When a business gains majority share of another business and therefore, control

Merger
When 2 business come together under one board of directors

54
Q

Types of growth (vertical and horizontal)

A

Backwards Vertical
- taking over a supplier

Forwards Vertical
- Taking over a customer (retailer)

Horizontal
- Merging with a business in the same level of the supply chain

Conglomerate
- Acquiring a business in another industry

55
Q

+ / - of organic growth

A

+ Less risk
+ Diseconomies of scale minimised

  • Slow Pace
  • Competition may be growing faster
56
Q

What are ethics

A

moral principles that guide business decisions

57
Q

3 ethical business practices

A

Treating workers and suppliers fairly (Fair trade)

Ethical sourcing of materials

Sustainability

58
Q

What is CSR (Corporate Social Responsibility)

A

The responsibility a business has to itself to maintain a positive social impact.

59
Q

What are the 4 sections of the CSR pyramid (Top to bottom)

Similar to Maslow as bottom ones are essential first

A

Philanthropic responsibility
- be a good corporate citizen (contribute to community)

Ethical responsibility
- Do what it right & avoid harm

Legal responsibility
- obey the law

Economic responsibility
- Be profitable

  • can be expensive and take time to do this
60
Q

8 Assessors of a country as a production location

A
  • Cost Of Production
  • Position in trading bloc
  • Skilled Labour
  • Ease Of Doing Business
  • Government Incentives (Low tax, subsidies, low rates)
  • Infrastructure
  • Politcal Stability
  • Natural Resources
61
Q

4 Local impacts of an MNC

A

Job Creation

Increase in local businesses (Supply chain & people earning more)

Infrastructure (If not in place, business has to install)

Community & Environment (pollution, parks, support schools)

62
Q

4 National Impacts of an MNC

A

FDI flows (Investments from other countries)

Balance of Payments

Consumer benefit (lower prices, more choice)

Transfer pricing (MNC selling in other country to avoid tax in manufacturing country)

63
Q

What are 3 stakeholder conflicts

A

Shareholders seek greatest ROI

Customers look for the lowest prices

Governments seek taxes

64
Q

4 influences (ways to control) MNCs

A

Political influences (lobbying)

Social media

pressure groups

Legal controls (tariffs and quotas)

Business paper 3 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions