PPQ - UB Flashcards
Explain the advantages of internal (organic) growth. (4)
- No loss of control as the business is not integrating with others
- Launch new products/services means businesses can target different markets
- Open new physical branches means they can reach new markets by opening up in new locations
- Selling online the business can trade 24/7 around the world
Distinguish between a tactical decision and an operational decision. (3)
- Tactical decisions are made to achieve the strategic objectives whereas an operational decision is made to ensure smooth running of the business on a daily basis
- Tactical decisions are normally made by middle managers whereas operational decisions can be made by any level of management (most likely to be lower level)
- Tactical decisions are more likely to be medium term whereas operational are day-to-day
Describe the benefits to BT of being a multinational company. (5)
- Increased sales revenue/market share/increased profitability.
- Access to a wider market.
- Increased brand awareness.
- Greater economies of scale.
- Availability of skilled workers.
Describe potential conflicts between any of the BT stakeholders mentioned in the case study (4) (shareholders, employees, government and customers)
- Shareholders want high profits whereas employees want high wages.
- Shareholders want a low rate of tax whereas the government may wish to increase it.
- Shareholders want high dividends whereas customers want low prices.
- Employees want a low rate of income tax whereas government may wish to increase it
Describe the objectives of third sector organisations. (3)
- Maximise its donations.
- Support a specific cause.
- Provide a service.
Using the case study, describe the possible objectives of NHS Scotland. (3)
- to provide a healthcare/quality/free service
- to operate within budget/efficiently/to spend taxpayers’ money wisely
- to be ethical/environmentally friendly
Explain the methods NHS Scotland may use to demonstrate they are socially responsible. (4)
- using energy and water efficiently – save on energy costs
- encouraging waste reduction – to reduce landfill
- recycling materials – meeting government targets
- use of sustainable public transport – cuts down carbon footprint/reduces carbon footprint
Distinguish between the features of NHS Scotland and a public limited company (plc) in terms of ownership and control. (2)
- NHS owned by government/taxpayers whereas, PLC owned by shareholders
- NHS controlled by Scottish Parliament whereas, PLC is controlled by Board of Directors
Describe the role of public relations (PR) in an organisation. (3)
- Building awareness/creating a positive image for an organisation.
- Organising sponsorship.
- Donating to charity
Describe advantages of being a social enterprise (3)
- help specific social cause they have chosen
- high quality employees attracted to cause
- make use of an asset lock
Describe methods of growth other than organic. (4)
- conglomerate, business in completely different market
- vertical, business at different stage of production
- outsourcing, hire elsewhere to carry out procedures
- divestment, sell off parts of business to focus on core
Describe benefits of diversified product portfolio. (5)
- spreads risk over different markets
- increases brand awareness
- ‘stars’ allow business to be market leader
- ‘cash cows’ give finance to fund riskier ventures
- ‘problem child’ gives opportunity to invest
Explain advantages of having a varied product portfolio (4)
- spreads the risk if one product fails - because there are others to rely on
- maximise sales - because you are attracting different market segments
- consumers see a variety of products with the same brand – so brand recognition is high
- easier to launch new products as brand recognition and trust is high
Describe the impact of competition policy on an organisation. (2)
- Cannot collude with other organisations to fix prices eg cartel
- Cannot use market power to pay unfairly low prices to suppliers
