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business > theme 1 > Flashcards

theme 1 Flashcards

1
Q

what is a mass market?

A

An unsegmented market in which products are offered to every customer through mass retailers or independent stores and promoted through mass media.

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2
Q

what is a niche market?

A

The subset of the market in which specialist products are offered to small group of customers.

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3
Q

characteristics of a mass market?

A
  • fast moving consumer goods
  • can produce large quantities at lower unit cost by exploiting eos
  • customers form majority of market
  • needs and wants more general
  • higher output and capacity
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4
Q

characteristics of a niche market?

A
  • sells to small consumer groups w specific needs
  • easier to focus on needs
  • able to charge prem prices
  • loyal customers
  • higher profit margins
  • lack economies of scale
  • can attract competition if successful
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5
Q

market size?

A
  • value: total amount spent by customers buying products
  • volume: physical quantity of products which are produced and sold
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6
Q

market share?

A

sales of a business / total sales in the market
x 100

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7
Q

why might the measurement of market share be important?

A

it may indicate a business that is a market leader

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8
Q

what can brands be used to do?

A
  • differentiate product from rivals
  • create customer loyalty
  • help product recognition
  • develop an image
  • charge prem price when brand is strong
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9
Q

what is a brand name?

A

name, term, sign, symbol or any feature that allows consumers to identify the goods/services of a business and to differentiate them from competitors

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10
Q

dynamic markets?

A

a market which is subject to continual and rapid change

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11
Q

benefits of online retailing?

A
  • can market to those who prefer to shop from home
  • easier to gather personal info from customers so that they can be targeted w other products/ offers in the future
  • selling costs (sales staff, rent, overheads) can be avoided
  • marketing costs will be lower
  • reach more customers
  • open 24/7
  • greater flexibility
  • customers can buy anywhere, globally
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12
Q

how markets change?

A
  • size of markets
  • nature of markets
  • new markets
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13
Q

adapting to change

A
  • flexibility (e.g., employees w multiple skills)
  • market research
  • investment (in new product)
  • continuous improvement in increasingly competitive environment
  • develop a niche
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14
Q

how competition affects the market
(business)

A

methods to attract customers from competitors:
- lowering prices
- making products appear different
- offering better quality
- offering extras, e.g., customer service

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15
Q

difference between risk & uncertainty?

A

risk:
when actions are taken however, the outcomes are unknown

uncertainty:
events which are completely beyond the control of businesses which can impact the market and cause financial consequences

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16
Q

product orientation?

A

when businesses focus on the production process and the product itself

develop and make a product which they believe customers will want and will sell well

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17
Q

market orientation?

A

a business which continually identifies, reviews and analyses consumer’s needs

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18
Q

advantages of market orientation?

A
  • can respond quicker to changes in market due to market info
  • stronger position to meet new competition
  • more able to anticipate market changes
  • more confident that launch of new product will be successful
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19
Q

effect of market orientation on business:

A
  • consult consumer continuously (market research)
  • design product according to consumers wishes
  • produce in consumers preferrable quantity
  • distribute to consumers buying habits
  • set price that consumers are willing to pay
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20
Q

what is market research?

A

involves gathering, presenting and analysing info about marketing and the consumption of goods and services

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21
Q

use of market research:

A
  • identifies and anticipates customers wants and needs
  • quantify the likely demand of a product
  • provides insight into consumer behaviour
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22
Q

what is primary research?

A

involves collecting primary data, information that did not exist before the research began.

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23
Q

methods of primary research?

A
  • questionaries
  • phone interviews
  • personal interviews
  • focus groups
  • observation
  • test marketing
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24
Q

what is secondary research?

A

collection of secondary data, info which already exists in some form

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25
Q

methods of secondary data?

A
  • internal data; existing market research reports, sales figures, annual reports from businesses, stock movements
  • external data; info from competitors, gov publications, data from customer services, international publications, internet website pages
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26
Q

quantitative & qualitative data

A

qualitative:
- collection of data about attitudes, beliefs and intentions

e.g., through focus groups and interviews

quantitative:
- collection of data that can be measured

e.g., use of gov publications

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27
Q

limitations of market research?

A
  • human behaviour: may not be honest
  • sampling & bias
  • behaviour of interviewers
  • external data may not be accurate to own business
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28
Q

use of ICT to support market research

A
  • company websites
  • social networking
  • databases
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29
Q

geographic, demographic and psychographic segmentation

A

geo: different customer groups are likely to have different needs depending on where they live

demo: age, gender, income, social class, ethnicity, religion

psycho: groups customers n attitudes, opinions and lifestyles

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30
Q

behavioural segmentation

A

how customers relate to a product

  • usage rate
  • loyalty
  • time and date of consumption
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31
Q

benefits of market segmentation?

A
  • can produce diff products for diff segments which can increase revenue
  • more loyalty to tailored products
  • avoid wasting promo to uninterested customers
  • can market a wider range of goods to diff customer goods
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32
Q

factors which affect market positioning?

A
  • benefits offered by product
  • usp
  • attributes of product
  • origin of product
  • classification of product
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33
Q

what is a market map?

A

a 2 dimensional diagram that shows 2 of the attributes or characteristics of a brand and those of rival brands in the market

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34
Q

disadvantages of a market map?

A
  • only 2 attributes can be analysed
  • info needed to plot on maps can be expensive and may require primary research
  • questionable on how valuable this type of map is
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35
Q

factors affecting comp advantage of a product/service?

A
  • product design
  • product quality
  • promo
  • customer service
  • delivery times
  • eos (produce efficiently at a low cost)
  • flexibility (can change designs, speed up processes)
  • ethical stance
  • focusing on particular market segment
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36
Q

product differentiation?

A

attempt by a business to distinguish its product from those of competitors

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37
Q

factors of product differentiation?

A
  • flexible pricing
  • recognition
  • extend product range
  • brand development
  • overcome competition
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38
Q

adding value to products & services

A
  • bundling
  • customer service
  • speed of response to customers
  • packaging
  • frequent buyer offers
  • customisation
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39
Q

demand?

A

the amount of product that consumers are willing and able to purchase at any given price

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40
Q

factors leading to a change in demand?

A
  • prices of subs
  • prices of complements
  • changes in consumer incomes
  • fashions, tastes and prefs
  • advertising and branding
  • demographics
  • external shocks ( competition, gov, economic climate, social / environmental factors
  • seasonality
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41
Q

supply?

A

the amount of a product which suppliers will offer to the market at a given price

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42
Q

factors leading to a change in supply?

A
  • changes in the costs of production
  • intro of new tech
  • indirect taxes
  • gov subsidies
  • external shocks ( world events, weather, gov)
  • price of related goods
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43
Q

what is the equilibrium price?

A

where supply and demand are equal

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44
Q

total revenue?

A

price x quantity

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45
Q

changes in demand?

A

if demand increases, price will rise

if demand falls, prices also fall

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46
Q

changes in supply?

A

if supply increases, price will fall

if supply falls, prices increase

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47
Q

factors causing disequilibrium in market?

A
  • excess demand:
    position where demand is greater than supply at a given price and there are shortages in the market
  • excess supply:
    position where supply is greater than demand at a given price and there are unsold goods in the market
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48
Q

price elasticity of demand?

A

percentage change in quantity demanded / percentage change in price

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49
Q

percentage change?

A

change / original x 100

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50
Q

interpretation of values:
- less than 1
- greater than 1

A

less than 1: price inelastic
greater than 1: price elastic

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51
Q

factors influencing ped?

A
  • time (subs will be used in long term)
  • competition for same product
  • branding
  • proportion of income spent on product
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52
Q

formula of income elasticity of demand?

A

percentage change in quantity demanded / percentage change in income

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53
Q

interpretation of numerical value
greater than 1
less than 1

A

greater than 1: income elastic
less than 1: income inelastic

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54
Q

diff between normal & inferior goods?

A

normal:
when there is an increase in income which results in an increase in demand, and the value of income elasticity will be positive

inferior:
when there is an increase in income which results in a decrease in demand and the value of income elasticity will ne negative

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55
Q

factors influencing income elasticity of demand?

A
  • necessities
  • luxuries
  • price of product
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56
Q

significance:
- businesses selling goods w high income elasticity
- businesses selling goods w low income elasticity
- production planning
- product switching

A
  • demand for goods that are v sensitive to changes in income
  • demand for goods that are income inelastic tend to be more stable during diff phases in business cycle (farmers not affected by income changes)
  • if businesses know the income elasticity of demand for their products they can respond to predicted changes in incomes
  • some manufacturers have flexible resources and can switch from the production of one good to another
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57
Q

what are the factors of a design mix?

A

function:
product/service must be fit for purpose and must be capable of doing the job that it is sold to do

aesthetics:
products/services should provide a sensory simulation in addition to performing a function
(size, appearance, shape, smell)

cost:
a business should be able to produce and sell a product/service at a profit

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58
Q

benefits of adapting product designs to social trends?

A
  • if waste is reduced, fewer resources will be used, lower costs and higher profits
  • products are likely to be more popular and sell in larger quantities, revenue will raise and improve profits
  • design features can be used as usp
  • viewed as good corporate citizens
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59
Q

what is promotion?

A

an attempt to obtain and retain customers by drawing their attention to a firm or its products.

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60
Q

above the line promotion?

A

advertising in the media. e.g., newspapers or tv adverts

categories:
- informative advertising
- persuasive advertising
- reassuring advertising

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61
Q

below the line promotion?

A

form of promotion that doesn’t involve advertising

sales promo:
free gifts, coupons, loyalty cards, competitions

public relations:
press releases, conferences, sponsorship, donations

merch & packaging:
product layout, display material, stock

direct mail

direct selling

exhibitions and trade fairs

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62
Q

factors affecting the chosen method of production?

A
  • cost
  • market type
  • product type
  • stage in product life cycle
  • competitors’ promos
  • legal factors
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63
Q

types of branding?

A

manufacturer brands:
created by producer of goods and services

own label brands:
products manufactured for wholesalers or retailers by other businesses

generic brands:
only contain name of actual product

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64
Q

benefits of strong branding?

A
  • added value
  • ability to charge prem prices
  • reduced ped (price increase will have less impact on demand)
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65
Q

ways to build a brand?

A
  • exploiting a usp
  • advertising
  • sponsorship
  • using social media
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66
Q

pricing strategies?

A

competitive:
based on prices charged by rivals

cost plus:
adding a % to costs of producing product

mark up:
% added to unit cost that makes a profit for a business when setting price

penetration:
low price initially

predatory:
v low price forcing rivals out of business

psychological:
slightly below a round figure

skimming:
high initially

67
Q

what are pricing strategies?

A

pricing methods used by a business when deciding what to charge for its products

68
Q

factors that determine most appropriate pricing strategy?

A
  • differentiation and usp
  • ped
  • amount of competition
  • strength of brand
  • stage in product life cycle
  • cost and need to make a profit
69
Q

what is distribution?

A

the delivery of goods from the producer to the consumer

70
Q

what is a distribution channel?

A

the route taken by a product from the producer to the customer

71
Q

direct selling?

A

when producers market their products directly to consumers

e.g.,
the internet
direct mail
door-to-door selling
mail order catalogues
direct response adverts
telephone selling

72
Q

what is a retailer?

A

a business that buys goods from manufacturers and wholesalers and sells them in small quantities to consumers

73
Q

what is a wholesaler?

A

a business that buys goods from manufacturers and sells them in smaller quantities to retailers

74
Q

what is an agent/broker?

A

an intermediary that brings together buyers and sellers

75
Q

factors when choosing the appropriate distribution channel?

A
  • nature of the product (exclusive, may need a demo, fast moving)
  • cost
  • the market
  • control
76
Q

product life cycle?

A

product development, intro, growth, maturity, decline

77
Q

what are extension strats?

A

ways to prolong the life of a product, before it starts to decline.

  • product adjustments
  • promotion
78
Q

what is a product portfolio?

A

a collection of products a business is currently marketing, made up of product lines (group of products that are v similar)

79
Q

what is the boston matrix?

A

a 2x2 matrix model that analyses a product portfolio according to the growth rate of the market and the relative market share of products within the market

80
Q

explain the boston matrix

A

categorised by market growth rate and relative market share

stars: high market growth, high market share.
- need to invest in product to cope w growing market and sales e.g., new production facilities or promo
- net cash flow = nearly 0

cash cows: low market growth, high market share
- little need for investment
- strong positive net cash flow

? : high market growth, low market share
- investment required to cope w expanding sales in fast growing market
- net cash flow likely to be 0 or -

dog: low market growth, low market share
- little investment required but may earn some profit
- net cash flow depends if profit is made

81
Q

what is a marketing strategy?

A

a set of plans that aim to achieve a specific marketing objective

82
Q

strats for mass markets?

A

product: develop a usp to differentiate from similar rivals

price: prices charged are to be v similar

promo: should invest heavily in advertising

place: often use multiple channels to distribute their goods

83
Q

strats for niche markets?

A

product: designed carefully to meet specific needs of customer groups

price: more flexibility in pricing

promo: more targeted, less need to use national media and specialised publications instead

place: more selective when choosing distribution channels

84
Q

strats for B2B & B2C?

A

outbound marketing strats:
directing marketing material at potential customers whether they are expecting it or not.

e.g., mail, email, telemarketing

inbound:
attracting potential customers to websites when they are looking for suppliers/ solutions.

e.g., blogging, socials, video marketing, search engine optimisation

hybrid:
combination, inbound strats take at least 6 months to generate results so outbound methods can be employed in the short term, which can be dropped after.

85
Q

disadvantages of outbound & inbound marketing strats?

A

outbound:
- can be ignored
- persistence can ruin brand rep
- may be seen as poor quality and wasting resources
- higher costs

inbound:
- effort and resources required more to build up useful content
- recruitment of experienced inbound marketers can be difficult and to keep up w trends.

86
Q

how to develop customer loyalty?

A
  • communication
  • customer service
  • customer incentives
  • personalisation
  • preferential treatment
87
Q

approaches to staffing?

A

staff as an asset:
employees are valued and their welfare is cared for.

e.g.,
- acceptable remuneration
- reasonable holidays, sick leave, maternity leave, pensions
- safe working environment
- training
- job security
- recognition & professional rs
- clear & effective leadership
- chances for promotion
- opps to solve problems

employees will have high retention costs and is likely to help recruit and motivate high quality staff.

staff as cost:
- paying minimum wage
- using 0 hour contracts
- neglecting investment in training
- providing minimum legal rights (holidays, sick pay)
- penalties for being late
- using cheap recruitment methods

88
Q

what is a flexible workforce?

A

workforce that can respond, in quantity and type, to changes in market demand

89
Q

methods to increase flexibility?

A
  • multi-skilling
  • part time / temp staff
  • flexible hours & home working
  • outsourcing
90
Q

advantages of a flexible workforce?

A
  • allows business to expand and contract quickly in response to changes in demand for its product
  • specialist jobs can be completed by a temp worker
  • temp staff are cheaper to employ
  • employees are responsible for only training their permanent workers
  • employees that can job share and work flexible hours allows for more efficiency
91
Q

disadvantages of a flexible workforce?

A
  • temp workers may have less motivated and only financially driven
  • outsourcing may result in poor quality work, damaging rep
  • temp workers may not be available when required
  • employing temp workers can be a costly process
  • temp workers may not work as well as permanent staff
  • too many temp workers may cause demotivation amongst core workers (bad environment)
92
Q

difference between dismissal & redundancy?

A

dismissal:
when employees are dismissed for a number of unfair reasons e.g., for joining a trade union

redundancy:
where there is no work for the employee to do so are dismissed under a lawful method

93
Q

why are employer / employee rs important?

A

it has an impact on the welfare of the employee and the performance of a business.

as a result, the business should result in an adaptable and co-operative workforce and high levels of skill and output.

94
Q

objectives which may cause conflict between employer/employees?

A
  • rates of pay
  • intro of new tech
  • flexible working
  • work conditions
95
Q

what is individual approaching?

A

this is when employers have developed a rs with employees at an individual level.

employees will negotiate wages, holidays, hours of work and other terms directly w the employer.

pay and other conditions vary w employees as those w good bargaining skills may get a better deal.

96
Q

what is collective bargaining?

A

determining wages, conditions of work and other terms through a negotiation process between employers / employee representatives e.g., trade union reps.

97
Q

advantages of collective bargaining?

A
  • agreements are transparent
  • cost effective for one set of negotiations
  • rules & terms are likely to be respected by both parties
  • favouritism may be reduced at work
98
Q

disadvantages of collective bargaining?

A
  • negotiations can take longer
  • views of individuals may not always be reflected
  • negotiation costs can be high
  • failure to agree can lead to consequences e.g., strike
  • owners may feel their freedom to manage is compromised
99
Q

what is recruitment and selection?

A

when businesses hire new employees, they need to attract and appoint the best people, those w the right skills and appropriate experience.

100
Q

stages in recruitment & selection process?

A
  • identify the type & no. of staff needed
  • prepare job description & person specification
  • advertise the job using appropriate media
  • evaluate applicants and select a shortlist for interview
  • carry out interviews
  • evaluate interviews & make appointment
  • provide feedback for unsuccessful candidates
101
Q

what is a job description?

A

states the title of a job and outlines the tasks, duties and responsibilities associated w that job.

main purpose is to show clearly what is expected of an employee

102
Q

what is a person specification?

A

provides details of the qualifications, experience, skills, attitudes and any other characteristics that would be expected of a person appointed to do a particular job.

103
Q

what is internal recruitment and its advantages?

A

recruitment from within the business.

advantages:
- cheaper no adverts
- employees familiar w procedures and environment, less induction training
- qualities, abilities and potential of the candidate is better known to the employer
- regular internal recruiting can motivate staff

104
Q

what is external recruitment and its advantages?

A

when someone is appointed from outside the business

advantages:
- new and different ideas brought in as well as experience from other working organisations.
- may attract larger number of applicants, more choice

105
Q

other methods of recruitment?

A
  • word of mouth
  • direct application
  • advertising
  • private employment agencies
  • headhunting (chosen by agency)
  • job centres
  • gov funded training schemes
106
Q

what are some recruitment and selection costs?

A
  • HR: to identify the number and type of staff required
  • admin: checking and updating job descriptions and person specifications
  • advertisement
  • interviewing
  • new person recruited may negotiate higher salary or more benefits
107
Q

what are some examples of training costs?

A
  • training courses
  • loss of output (off the job training)
  • employees leaving
108
Q

what is training?

A

process of increasing the knowledge and skills of workers so that they are better able to perform their jobs.

109
Q

objectives of training?

A
  • making workers more productive, teaching effective ways of working
  • familiarising workers w new equipment or tech
  • educating workers in new methods of working e.g., change in production line
  • making workers more flexible
  • preparing workers to move into a diff department
  • improving standards of work, to improve quality
  • implementing health & safety at work policies
  • increasing job satisfaction & motivation (confidence gained)
  • assisting in recruiting and retaining high quality staff
110
Q

what is induction training?

A

training given to new employees when they first start a job

111
Q

what is on the job training?

A

training given in the workplace by the employer.

  • learning from other workers
  • job rotation
  • mentoring
  • apprenticeships
  • graduate training
112
Q

advantages / dis of On TJ training?

A
  • output is being produced
  • trainees learn by doing job
  • cheaper
  • easy to organise

disadvantages:
- output may be lost if workers make mistakes
- may be stressful for worker
- trainers may get frustrated
- could be danger to others

113
Q

what is off the job training?

A

training which takes place outside the business by an external training provider e.g., uni.

114
Q

advantages / dis of Off TJ training?

A
  • output is not affected if mistakes are made
  • workers learning cant be distracted by work
  • training could take place outside of work hours
  • customers and others are not at risk

dis:
- no output
- can be expensive
- some aspects of work cannot be taught off the job
- may take time to organise

115
Q

benefits of training?

A

managers:
workers are more motivated & satisfied, more co-operative and easier to work with, better at doing job

owners:
will benefit if productivity is higher, costs will be lower and may gain comp advantage

employees:
able to do jobs more efficiently, more motivated, less stressed, more job satisfaction

customers:
better quality products produced, improvements in customer service

116
Q

what is an organisational structure?

A

the way in which positions within the business are arranged. the structure defines:
- workforce roles & job titles
- route through which decisions are made
- who is responsible and accountable to whom
- relationship between positions in a business
- how employees communicate w each other

117
Q

what are organisational charts?

A

a diagram that shows the different job roles in a business and how they relate to each other.

they show:
- how the business is split into departments
- role of employees & job titles
- who has responsibility
- to whom people are accountable to
- communication channels
- rs between different positions in the business

118
Q

employee roles in the organisational hierarchy?

A

directors: appointed to run the business in the interest of its owners. overall charge of activities in an organisation

managers: responsible for controlling / organising within the business. make day-to-day decisions about running the business.

team leaders: members of a team whose role is to resolve issues between team members and co-ordinate team efforts so that the team works efficiently.

supervisors: monitor and regulate the work in their assigned or delegated area

professionals: positions for staff w high levels of qualifications and experience

operatives: skilled workers involved in the production process, carry out instructions of managers / supervisors

general staff: staff w non - specific skills

119
Q

what is a chain of command?

A

the way authority and power is organised in an organisation

120
Q

what is a span of control?

A

number of people a person is directly responsible for in a a business

121
Q

what is centralisation and decentralisation?

A

centralisation:
business organisation where major decisions are made at the centre or the organisation and then passed down the chain of command

decentralisation:
business organisation where decision making is pushed down the chain of command and away from the centre of the organisation

122
Q

advantages of centralisation?

A
  • senior management has more control of the business
  • procedures, ordering and purchasing can be standardised throughout the organisation, leading to eos
  • senior managers should be more experienced and skilful in making decisions
  • senior managers can make decisions from the pov of the business as a whole
  • business may need strong leadership by a central group of senior managers
  • communication may improve if there are fewer decision makers
123
Q

advantages of decentralisation?

A
  • empowers and motivates workers
  • reduces stress and burdens of senior management
  • provides subordinates w greater job satisfaction
  • subordinates may have better knowledge on conditions affecting their area of work
  • quicker response changes
124
Q

types of organisational structures?

A

tall: long chain of command, narrow span of control.

flat: fewer layers of hierarchy, short chain of command but wide span of control (more employee freedom)

matrix: allows businesses to connect people w particular specialist skills, used to solve problems in a business

125
Q

implications of all organisational structures?

A

tall:
- higher management costs (more managers)
- communication may be poor
- messages may get distorted
- slower decision making

flat:
- managers may lose control due to wide span of control
- thus, negative impact on productivity
- co-ordination problems, over-burdened

matrix:
- needs expensive support systems
- may have issues w co-ordinating a team from diff departments w speed of decision making

126
Q

what does it mean to be motivated
& what is it’s importance?

A

the desire to take action to achieve a goal.

a lack of motivation may lead to reduced effort and lack of commitment (short term)

long term effects include of high levels of absenteeism and falling productivity and profits

127
Q

what is taylor’s theory of scientific management?

A

she designed a method to find out the best way to carry out a task at work which included of observing employees then to teach them the quickest method to completing this instead.

however, the quickest and doesn’t suit everyone and taylor viewed people as machines.

128
Q

what was mayo’s hawthorne study?

A

initially, people believed that worker’s productivity was affected by work conditions, skills and financial incentives however changes made showed that this had little to no effect.

elton mayo reported that a business must make sure the personal satisfactions of workers are met for them to be motivated

however, it assumes workers and management share the same goals, that communication will break down barriers and is also biased towards management.

129
Q

what is maslows hierarchy of needs?

A

self actualisation: promo, more responsibility

esteem needs: more recognition for good job

love & belonging: teamwork, communication

safety: job security, safe working conditions

physiological needs: high wages, good working conditions

130
Q

what is herzbergs 2 factor theory?

A

he asked a group of engineers to describe incidents at their job and whether it satisfied or dissatisfied them.

he divided the causes into 2 categories; motivators vs hygiene factors.

motivators: responsibility, recognition, sense of achievement, chance of promo

hygiene: pay, conditions, treatment, relationships w managers, company policy

however, this may be taken for granted, can be expensive to implement and results may vary on subjects

131
Q

what are some financial incentives to improve staff performance?

A

piecework: payments for each unit produced

commission: payment for achieving a target

bonus: addition to basic wage/salary

profit sharing

performance related pay: extra pay for achieving targets, targets can include of; getting to work on time, improving skills, getting on w other workers

however, bonus may be too low, may be difficult to achieve, few staff see appraisal.

132
Q

what are some non financial incentives to improve staff performance?

A

delegation: workers may feel more trusted being handed down responsibility from manager

consultation: told about changes

empowerment: recognition, trust, control in decision making, good work environment

(costly, manager may feel insecure)

teamworking: increases productivity, more skills shared, responsibility shared, more ideas

flexible working: staff are able to choose their hours of work, work from home or take lengthy period of leave

job enrichment: more responsibility as their role is extended in the production process.

job rotation: reduces boredom and enables skills / experience.

job enlargement: giving an employee more work to do of a similar nature- prevents boredom

133
Q

difference between managers and leaders?

A

managers:
predict what will happen in the future, plan to achieve their objectives, organise resources, command staff lower down the hierarchy, monitor day-to-day tasks.

leaders:
visionaries, good at carrying through the process of change, often excellent motivators

could be argued that leaders devise strategies whilst managers are responsible for implementing them.

134
Q

characteristics of a leader?

A
  • positive self image, confidence, realistic aspirations
  • need to be able to get to core of a problem, should have vision and commitment
  • intelligent and articulate
  • creative and innovative
  • ability to sense change and can respond to it
135
Q

leadership types?

A

autocratic:
(when manager makes all decisions w out consultation)

manager sets objectives, allocates tasks and insists on obedience- group is dependant on them.

high levels of supervision, poor levels of motivation w employees, little cohesion

paternalistic:
(where leader makes decisions but takes welfare of employees into account)

democratic:
(where managers allow other to participate in decision making)
either persuasive or consultive

good communication skills however long decision making

laissez - faire:
(where employees are encouraged to make own decisions)

group members may be skilled and experienced however may lack knowledge, not able to set deadlines or manage own projects- costly.

136
Q

what are entrepreneurs?

A

individuals who set up and run a business and take the risks associated with this.

  • innovative
  • organised
  • risk takers
137
Q

how do entrepreneurs find business ideas?

A
  • business experience
  • personal experience
  • skills
  • lifestyle choices
138
Q

what are the stages in setting up a business?

A
  • idea
  • research
  • planning
  • financing
  • location
    -resources
  • launch
139
Q

factors in expanding a business?

A
  • financial management
  • admin
  • marketing
  • purchasing
  • managing people
  • production
140
Q

what are intrapreneurs?

A

employees who use entrepreneurial skills without having to risk their own money to find and develop initiatives that will have financial benefits for their employer

141
Q

advantages of employing intrapreneurial staff?

A
  • can drive innovation in a business and discover new commercial opps, gain comp advantage
  • satisfies the self actualisation needs
  • awards can be won for unique products
  • induvial gains opportunity to experiments and be creative
142
Q

barriers to entrepreneurship?

A
  • lack of finance
  • lack of entrepreneurial capacity
  • becoming an employer
  • legal barriers
  • lack of ideas
  • fear of failure
  • aversion to risk
  • unsupportive environment
143
Q

anticipating risk & uncertainty

A

risk:
- can take measures to reduce the amount of risk they take e.g., test it out in similar market.
- using quantitative techniques e.g., decision trees

uncertainty:
- make preparations to deal w consequences, if they were to occur e.g., contingency funds set aside, may also use SWOT analysis and PESTLE to reduce uncertainty

144
Q

what are the characteristics of an entrepreneur?

A
  • self confidence
  • self determination
  • self starter
  • judgement
  • commitment
  • perseverance
  • initiative
145
Q

what are skills required by entrepreneurs?

A
  • organising
  • financial management
  • communication
  • managing people
  • decision making
  • negotiating
  • IT skills
145
Q

reasons why people set up a business?

A

financial motives:
- profit maximisation: attempt to make as much profit as possible in a given time period
- profit satisficing: making enough profit to satisfy the needs of the business owner

non financial:
- ethical stance
- social enterprise (not for profit)
- independence
- home working

146
Q

what are business objectives?

A

goals or targets set by a business to help achieve its long term purpose

  • increases motivation
  • helps owners decide where to take business and steps required
  • SMART; specific, measurable, agreed, realistic, time specific
147
Q

examples of objectives?

A
  • survival
  • profit maximisation
  • sales maximisation
  • market share
  • cost efficiency
  • employee welfare
  • customer satisfaction
  • social objectives (community)
148
Q

what is a sole trader?
+ advs & dis

A

a business organisation which has a single owner

advantages:
- owner keeps all profit
- business is independent and owner has complete control
- simple to set up

disadvantages:
- unlimited liability
- may struggle to raise finance
- work hard long hours

149
Q

what is a partnership?
+ advs & dis

A

business organisation that is usually owned by between 2-20 people

advantages:
- easy to set up
- partners can specialise in their area of expertise
- doesn’t have to publish financial info

dis:
- unlimited liability
- share profit
- conflict

150
Q

what is a limited partnership?

A

partnership where some members contribute to capital and enjoy a share of profit but do not participate in running business. at least 1 partner must have unlimited liability.

151
Q

what is a limited company?

A

a business organisation that has a separate legal entity from that of its owners

features:
- capital is raised by selling shares
- owners (shareholders) have limited liability
- run by directors who are elected by shareholders
- pay corporation tax

152
Q

what is a private limited company?

A

features:
- shares can only be transferred privately (1 individual to another)
- often family businesses owned or friends
- directors tend to be shareholders and involved in running the business

advantages:
- shareholders have limited liability
- more capital can be raised by issuing shares
- control cannot be lost to outsiders

dis:
- have to publish financial info
- profits shared between more members
- cannot raise large amounts of money like plc

153
Q

what is a franchise?

A

a business model in which a business (franchisor) allows another operator (franchisee) to trade under their name

advantages to franchisees:
- lower risk
- support from franchisor
- can benefit from marketing campaigns of franchisor

dis:
- profits shared w franchisor
- lack independence and must stick w rules
- must sign contract, reduce independence

adv to franchisors:
- fast method of growth
- take financial risk
- franchisees more motivated than employees

dis:
- profit is shared
- poor franchisees will damage rep
- cost of supporting may be high

154
Q

what is a social enterprise and its different forms?

A

a business that trades w the objective of improving human or environmental well being

forms:
- co-operatives (organisation owned by its members who have equal voting rights)
- mutual organisations (business owned by its members who are customers not shareholders)
- charities

155
Q

what is a lifestyle business?

A

a business that aims to make enough money to provide the flexibility needed to support a particular lifestyle for the owner

features:
- often small and just owner
- interests of entrepreneur is likely to influence nature
- less stressful, home based most likely

156
Q

what are online businesses?

A

a business that uses the global communications infrastructure of the internet as a trading base

features:
- customers access via internet
- collect payment electronically e.g., paypal
- must have secure websites
- low set up costs
paid for or sponsored advertising is main source of revenue

157
Q

what is a plc?

A

a company owned by shareholders where the shares can be traded openly on the stock market

158
Q

what is a stock market/ floation?

A

stock market:
market for second hand shares

stock market flotation:
process of a company going public- making shares available to the public for the first time

159
Q

advantages + dis of plcs?

A

advantages:
- huge amounts of money can be raised from sale of shares to public
- production costs may be lower as firms may gain eos (plcs are expected to grow, as they get bigger unit costs fall)
- can often dominate the market
- easier to raise finance

dis:
- high setting up costs
- outsider can take over
- members of public have access to company’s accounts (more info published than ltd)
- difficult to deal w customers on personal level
- inflexible due to size
- may be divorce of ownership and control

160
Q

what are opportunity costs?

A

when choosing between diff alternatives, the opp cost is the benefit lost from the next best alternative to the one that has been chosen

161
Q

what are trade-offs?

A

where a decision maker faces a compromise between 2 alternatives
e.g., an ethical stance may be chosen however cam be v costly.

weighing up:
- obtain info (advs / dis)
- balance short and long term
- gauge support

162
Q

moving from entrepreneur to leader

A
  • need for formality
  • need for shared ownership
  • greater responsibility to others
  • need for motivation & inspo
  • need for strategy and vision

business (6 decks)

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