Past Paper Questions Flashcards
What is consultation? (2)
employees opinions are sought when making business decisions.
What is Span of control? (2)
the number of employees that a manager is responsible for
Explain one way in which a business such as Bon Bon’s adds value to the products it sells. (4)
- adding value is the process of turning inputs into something that will sell more than it costs
- Bon Bon’s do this with their hand- packed confectionery
- This could give Bon Bon’s a USP compared to competitors
- as a result customers may be prepared to pay a higher price for Bon Bon’s products
What is trade-off?
a situation where having more of one thing leads to having less of another.
Assess a likely trade-off for Bon Bon’s of not having “mass market ambitions”. (10)
(DISADVANTAGE)
- by not having mass market ambition, Bon Bon’s is potentially sacrificing gaining new potential customers
- this could lead to them missing out on additional sales it could have made by selling to a wider range of retailers such as supermarkets.
- resulting in, a lower cashflow and possibly not being able to cover costs of production
Assess a likely trade-off for Bon Bon’s of not having “mass market ambitions”. (10)
(ADVANTAGE)
- by not having a mass market ambition Bon Bon’s can focus on building a strong brand as a niche provider of traditional sweets
- This could help to build brand loyalty and repeat purchases as well as new customers
- resulting in higher profit margins
What is a dog in the boston matrix?
is a product with a low market growth and a low market share
Bon Bon’s has identified “traffic light lollies” as being dog in its product portfolio.
Assess the possible consequences for Bon Bon’s continuing to sell “traffic light lollies”. (12)
(DISADVANTAGE)
- traffic light lollies may still require marketing such as promotions and discounts
- this means that funds could be taken away from better selling products such as the question mark
- this could result in these products having a lower market share
- resulting in a reduction in revenue leading to a limited growth for the business and its other products
Bon Bon’s has identified “traffic light lollies” as being dog in its product portfolio.
Assess the possible consequences for Bon Bon’s continuing to sell “traffic light lollies”. (12)
(ADVANTAGE)
- including dogs in the product portfolio attracts some customers to buy products
- this could lead to additional sales of other products
- resulting in an increase in cashflow
- this means Bon Bon’s can reinvest their profit into their other products such as the candy necklace
What is a decentralised structure?
Where authority is spread widely through the organisation.
Assess the potential benefits for Beaverbrooks of having a more decentralised organisational structure. (10)
+means employees lower down the hierarchy can voice their ideas
+leads to an increase in motivation as it gives a sense of empowerment
+result in new ideas and possibly competitive advantage in the market and boost sales
-however, decision making may take a long time and maybe a loss of focus if junior employees make decisions
+Junior employees understand customer needs more
+means store managers could deal with issues in store rather than passing it on to head office and saving time
-different decisions could be made in each store
-leading to a lack of brand consistency
Assess two factors that could affect the supply of Beaverbrooks silver jewellery. (8)
-how much a supplier is willing and able to give to a market at a given price and over a period of time.
technology:
- older technology can slow down production
- could lead to a decrease in beaverbrooks silver jewellery
- resulting in lose of sales due to not keeping up with demand
- however, new technology can be expensive to introduce
cost of production:
- price of silver could increase
- resulting in an increase in cost of jewellery production
- however, they may already have a large amount of silver stock so there may not be an instant affect on supply
To continue developing the most innovative technology in the travel market, MT could either use more venture capital or a bank loan.
Explain these two options and recommend which option would be most suitable for a company that operates in a dynamic market, such as MT. (20)
(VENTURE CAPITAL)
+ A venture capitalist like Piers Linney will offer advice as well as finance
+means decision making would be more effective
+leading to increased productivity and better time and resource management
+resulting in quicker and more effective achievement of goals such as developing their new app.
- may have to give up a large percentage the ownership of the company
- especially if it is more than 50% of the company
- This means MT will potentially be giving up control and decision-making power.
- leading to the business possibly changing the direction of their original business plans
To continue developing the most innovative technology in the travel market, MT could either use more venture capital or a bank loan.
Explain these two options and recommend which option would be most suitable for a company that operates in a dynamic market, such as MT. (20)
(BANK LOAN)
+ have already developed new tech e.g Hotel2020
+meaning they may already have the staff and equipment required to develop new technology
+could mean the finance needed could be small and easily gained from the bank
- can have high interest rates
- this means the costs of the production would rise
- leading to MT having to increase the amount of downloads or increase the price of their new app in order to cover costs
What is venture capital?
when a business presents an idea to specialists in return for an investment
