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Business studies > Theme 1 > Flashcards

Theme 1 Flashcards

1
Q

Dynamic nature of business

A

A business must understand how dynamic the market is that it is entering.

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2
Q

Obsolete

A

out of date/ not in use

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3
Q

E-commerce

A

Using the internet to carry out business transactions

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4
Q

M-commerce

A

using mobile technology to carry out business transactions

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5
Q

Types of reward

A

Profit, personal development, self-esteem, independent satisfaction

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6
Q

Ways to reduce risk

A

Plan, research, finance with care, calculated risks, keep costs down

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7
Q

Customer needs

A

A business needs to understand the needs and wants of customers in their target market segment.

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8
Q

Adding value

A

Adding value is the transformation process that describes what happens inside the business.

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9
Q

What is an enterprise ?

A

A business

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10
Q

Market research

A

The purpose is to gather information which will enable a business to be informed in its decisions and identify gaps in the market.

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11
Q

Primary research

A

Data collected first hand for a specific purpose.

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12
Q

Secondary research

A

Data that already exists and has been collected for a different purpose.

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13
Q

Qualitative data

A

expresses peoples opinions and cannot be shown on a graph

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14
Q

Quantitative data

A

Numerical data that can be expressed on a graph

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15
Q

Market segmentation

A

Involves dividing a market into parts that reflects different customer needs and wants.

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16
Q

Market mapping

A

Is the process to identify a gap in the market by looking at what competitors offer

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17
Q

Competitive environment

A

where a business operates in a market where there are other businesses producing the same or similar goods and services.

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18
Q

Revenue formula

A

Price x quantity

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19
Q

Total costs formula

A

Fixed costs + variable costs

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20
Q

Profit formula

A

Total revenue - total costs

21
Q

Break even formula

A

(selling price per unit- variable costs)

22
Q

Interest rates

A

Affect both the business and the consumers. They can represent a reward for savings or a cost for borrowing.

23
Q

Unlimited liability

A

The owner is responsible for all debt.

24
Q

Limited liability

A

The owner is only reliable for debt up to the amount they invested into the business.

25
Q

Sole trader

A

An individual owning the business on their own

26
Q

Partnership

A

Formed where a business is started and owned by more than one person.

27
Q

A company

A

Formed when a business is set up to have a different legal identity from its owner.

28
Q

Marketing mix

A

How a business combines its products and its price and uses promotion and the place of sale in order to succeed.

29
Q

Legislation

A

Where the government makes laws in order to control business action and protect the needs of stakeholders.

30
Q

Technology

A

The application of knowledge, skills and techniques to improving business performance.

31
Q

Stakeholders

A

Any individual or organisation who has a vested interest in the activities and decision making of a business. (managers, employees, customers ,pressure groups)

32
Q

Business plan

A

provides a focus on the business idea and helps the financial viability of the idea and encourages the business to set appropriate objectives.

33
Q

Economic climate

A

The general situation in a country affecting the wellbeing of individuals and the government in areas such as output, prices and employment

34
Q

Business location (factors)

A

Cost, labour, competition, raw materials, technology, government assistance, nature of business activity

35
Q

Sources of finance

A

Bank overdraft, trade credit, personal savings, share capital, venture capital (professional investor), loan

36
Q

Cash flow

A

the process of cash flowing in and out of a business

37
Q

customer wants

A

Goods and services that we would like but don’t need to live

38
Q

Useful insight provided by market research

A
  • Demand
  • Competition
  • Customers
  • Market segments
39
Q

Why use market segmentation ?

A
  • Choosing market mix
  • Choosing promotion
  • Market mapping
40
Q

Advantages of market mapping

A

helps spot gaps, analyses competitors

41
Q

Disadvantages of market mapping

A

‘Gap’ doesn’t mean demand, reliable ?

42
Q

Examples of primary research

A

Questionnaires
Surveys
Interviews
Likert scale

43
Q

Example of secondary research

A

Government report

44
Q

Business aims

A

Is the ultimate purpose

45
Q

Business objectives

A

Is a goal that is sought in order to achieve an aim

46
Q

What do objectives depend on ?

A

Size of business
Competition
Type of business

47
Q

Main business aims

A

Profit maximisation
Survival
Customer satisfaction

48
Q

different aspects of the economic climate

A 
> Interest rate changes
> Inflation
> Consumer income
> level of unemployment
> taxation
> exchange rates
49
Q

Why is cashflow forecasting important ?

A

Can forecast cashflow problems

Can find a solution to a potential problem before it becomes a problem

Business studies (2 decks)

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