Specification Areas

Question 1

3 internal stakeholders

Answer 1

• employees
• managers
• shareholders

Question 2

5 external stakeholders

Answer 2

• suppliers
• banks
• government
• local community
• customers

Question 3

Shareholders of private limited company:

Answer 3

• likely to be wealthy
• venture capitalists
• provide advice
• can sometimes interfere with the running of the business

Question 4

Shareholders of public limited company:

Answer 4

• individuals or large business

- shareholders only have voting rights

Question 5

Stakeholder mapping

Answer 5

1) keep satisfied
2) manage closely
3) monitor
4) keep informed

Question 6

internal influences on product development (5)

Answer 6

• availability of budget
• talent
• past success/failure
• need to increase sales
• how old current products are

Question 7

external influences on product development (5)

Answer 7

• gap in market
• government policies
• customer expectations
• competitors actions
• new technology

Question 8

predatory pricing

Answer 8

price set low by dominant competitor to undercut competition

Question 9

ways to analyse financial performance (6)

Answer 9

• budgets
• cash flow forecast
• breakeven point
• profit margins
• receivables
• payables

Question 10

value of cash flow forecasts (3)

Answer 10

• highlight when and by how much a business will be short of cash
• anticipate and prepare for cash flow problems
• avoid running out of cash and liquidation

Question 11

ways to increase sales (4)

Answer 11

• increase promotions
• reduce price
• use product life extension strategies
• find new markets and segments

Question 12

ways to reduce fixed costs (4)

Answer 12

• find cheaper premises
• reduce staff number
• capital intensive
• increase capacity utilisation

Question 13

organic growth methods (5)

Answer 13

• open new branches
• invest in new tech and facilities
• increase capacity
• develop new products
• enter new markets

Question 14

benefits of product innovation (4)

Answer 14

• brand loyalty from first mover advantage
• price skimming
• price penetration
• publicity

Question 15

benefits of process innovation (6)

Answer 15

• efficiency
• quality
• faster production time
• lower unit cost
• mass customisation
• flexibility

Question 16

Greiners growth model

Answer 16

• creativity
• leadership
• direction
• autonomy
• delegation
• control
• coordination
• red tape
• collaboration
• ’?’

Question 17

drivers of retrenchment (7)

Answer 17

• high costs
• poor return on investment
• financial difficulties
• failed takeover or merger
• economic downturn
• saturated market
• new CEO

Question 18

methods of retrenchment (6)

Answer 18

• reduce output
• make redundancies
• withdraw product form market
• sell off parts of the the business
• outsource
• de-merger

Question 19

features of culture (5)

Answer 19

• the way stakeholders are treated
• the type of HR strategy
• diversity of the workforce
• structure
• decision making

Question 20

Charles handy culture model

Answer 20

• Power - Task

- Role - Person

Question 21

reasons for changing culture (6)

Answer 21

• decline in performance
• loss of staff
• demotivation
• lack of innovation
• poor customer service
• loss of management control

Question 22

Hofstedes national cultures

Answer 22

• power distance
• individualism
• masculinity
• uncertainty avoidance
• long term orientation

Question 23

Strategic planning process

Answer 23

1) mission statement
2) SWOT
3) corporate objectives
4) decide on strategy
5) implement strategy
6) evaluate success

Question 24

pros of using network diagram (2)

Answer 24

• establishes quickest time for completing a project

- identifies critical tasks

Question 25

cons of using network diagram (3)

Answer 25

• durations are estimations
• doesn’t consider unforeseen factors
• too complicated for large projects

Question 26

internal causes of failure (4)

Answer 26

• wrong strategic decisions
• poor execution of strategy
• poor leadership
• financial difficulties

Question 27

strategic drift stages

Answer 27

• incremental change
• strategic drift
• flux
• transformational change or death

Question 28

Contribution profit stages (5)

Answer 28

Revenue -
Variable costs =
Contribution -
Fixed Costs =
Profit