Questions

Question 1

What are 2 aims of a private sector organisation?

Answer 1

To survive in a market with bigger companys

To make a profit

Question 2

What is meant by the term marketing?

Answer 2

Identifying your target audience’s needs and wants and adapting your marketing mix in order to meet those needs and wants.
The management process of getting the right product at the right time in the right place at the right price.

Question 3

Give two reasons why someone may want to start up their own business?

Answer 3

To make money to give themselves a better financial set-up.

To give something back to the economy and community by providing jobs ect.

Question 4

Suggest an advantage and a disadvantage of a bank loan?

Answer 4

Able to receive money quickly
BUT
Have to pay it back with interest

Question 5

Suggest an advantage and a disadvantage of an overdraft?

Answer 5

Can go into the overdraft when you need to i.e dont need to go to the bank to get it
BUT
Have to pay it pack with interest

Question 6

What is product orientation?

Answer 6

A business will base its products on what it perceives as its internal strengths. They will try and sell whatever they can make without trying to find out if that’s what the customers want.

Question 7

What are 3 advantages of being product orientated?

Answer 7

Economies of scale can more easily occur.
Allows outsourcing of production.
Firms can focus on internal quality.

Question 8

What are 3 disadvantages of being product orientated?

Answer 8

Changed in market structure will not be responded to.
Fashion or taste trend are not accounted for.
Technology can be left behind.

Question 9

What is market led orientation?

Answer 9

The business’s activities will be dictated by the market, it will always attempt to meet the needs of the market with little reference to internal strengths.

Question 10

What are 3 advantages of being market orientated?

Answer 10

The business is flexible to changes in demand patterns.
It will have a strong understanding of the customers.
New products have a greater chance of success.

Question 11

What are 3 disadvantages of being market orientated?

Answer 11

High costs of market research,
Unpredictability of future products.
Abandonment of earlier product investment.

Question 12

What is asset led marketing?

Answer 12

How to relate customers taste to the business’s own strengths. Finding out what the market wants and asking how the business’s skills, knowledge and assets can meet those needs.

Question 13

What are 3 advantages of asset led marketing?

Answer 13

The future activities are predictable.
Profits should be high.
No wasted products.

Question 14

What is job production?

Answer 14

Single items made usually to the buyer’s specification. E.g. wedding dresses. The employees are highly skilled and paid well which means they charge highly and some products take a while to make. The products can be used to differentiate i.e to make a niche market.

Question 15

What is batch production?

Answer 15

Goods are produced in sets, and then using the same equipment and labour, batches of different goods are made. Equipment is adjusted to fit the batch being made at that time. Products can be aimed at niche markets using the same assets to produce a range of goods e.g bakers. Time is lost when machines have to be reset and the firm may not be equipped to deal with large scale orders.

Question 16

What is flow production?

Answer 16

The production of products on production lines. The process is broken down into small, simple tasks so machines can do them or un-skilled workers can. The costs of labour are low, they do need however large amounts of capital investment but will benefit from economies of scales.

Question 17

what is economies of scale?

Answer 17

the reduction in average costs of production that occur as as firm increases its scale of production.

Question 18

what is internal economies of scale?

Answer 18

Reductions in average/unit costs because of increasing internal efficiencies of the firm.

Question 19

What are 3 ways a business can benefit from internal economies of scale?

Answer 19

Bulk buying
Able to use latest technology, increase efficiency and productivity.
Access to wider range of capital.

Question 20

What is the public sector?

Answer 20

Businesses owned and ran by the government. E.g. NHS

Question 21

What are 3 aims of the public sector?

Answer 21

Provide for the population needs.
Provide a quality service.
Provide value for money for the taxpayer.

Question 22

What is the private sector?

Answer 22

Businesses that are not owned by the government e.g. sole traders

Question 23

What are 3 aims of the private sector?

Answer 23

Increase profitability.
Survival
Gaining market share

Question 24

What is diseconomies of scale?

Answer 24

when a business sees an increase in costs as output increases

Question 25

What are the main features of diseconomies of scale?

Answer 25

When a business expands, communication becomes difficult, the managers become under more pressure and hence can become unmotivated, customers may feel they've lost the personal touch they had.

Question 26

what is a private limited company?

Answer 26

Is a business held privately by owners who have limited liability.

Question 27

What is a public limited company?

Answer 27

A business owned by a large number of shareholders.

Question 28

what is a merit good?

Answer 28

Those goods and services that go under-consumed so the government subsidizes them so that consumption does not depend on the ability to pay for the good or service e.g education and vaccination.

Question 29

What is a public good?

Answer 29

A good or service that is provided without profit to all members of a society by the government. It is an non-excluadable good so the consumption by one person doesn't decrease the consumption to another and no-one can be excluded by it e.g street lighting.

Question 30

What are 3 examples of changing working patterns?

Answer 30

Older people working longer Flexible working Home working

Question 31

what is globalisation?

Answer 31

when businesses begin operating on an international scale

Question 32

How might customers be affected by the removal of a monopoly?

Answer 32

Greater choice of provider Princes decrease Greater quality

Question 33

What are 4 characteristics of an entrepreneur?

Answer 33

Innovative Risk taking Determined Creative

Question 34

How might a business benefit from economies of scale?

Answer 34

Technical economies:-Their running costs do not increase in proportion to the firms size e.g. a larger firm will make more use out a piece of machinery so reduces average costs Managerial economies:- Can afford to hire specialist managers- know how to get the best value for money, reduce average costs Marketing economies:-can afford to invest in promotions and advertisements-benefit firm Can diversify to reduce risk and gain competitive edge

Question 35

What are 3 advantages of having a business plan?

Answer 35

Banks are more likely to loan Can be used as a monitoring tool-actual vs budget Forces entrepreneurs to look at all aspects of a business e.g amount of staff

Question 36

What are 3 disadvantages of a business plan?

Answer 36

Many have been poorly researched They are often unrealistic Some businesses may not need them e.g. one person window cleaner, waste of time

Question 37

What are 2 examples of merit goods?

Answer 37

Health | Education

Question 38

Why is public lighting a public good?

Answer 38

It is a government provided service that doesn't stop the consumption of one person by another person. It also is impossible to exclude others from benefiting from it.

Question 39

What factors other than income can affect price of products?

Answer 39

Weather Cost of production Competition Change in consumer taste