Theme 1 Lines Of Analysis Flashcards

Question

Line of analysis for external factors in relation to a factor affecting supply

Answer 1

1. Sole trader are Only owners of a Business 2. Therefore they can maintain full control over day to day running 3. Able to establish a strong power culture 4. Maintain consistency throughout Business 5. Build strong Brand 6. Differentiate from competitors 6. Price Inelastic 7. Increase price without sign fall in demand 8. Increase Revenue 9. Increase Gross profit margin 10. Increase Retained profit to reinvest in…

Answer 2

1. Unlimited Liability 2. Increased Risk of Investment 3. If Business debt Exceeds Buisness Assets 4. May need to sell personal Assets 5. Increased Risk makes it less attractive for Investment 6. Reduced Investment 7. Less Capital 8. Reduced Asset

Answer 3

* Knowledge + Experience from Partners * Look in case + input knowledge + experience * Improved Innovation * Differentiation ( specifiy how) * Price InElastic * Increase Price * Without SiG Fall in Demand * Increased Gross profit * Increased Operating Profit | MUST ADAPT TO THE CASE

Answer 4

* Unlimited Liability * Increased Risk of Investment * If Business debt Exceeds Buisness Assets * May need to sell personal Assets * Increased Risk makes it less attractive for Investment * Reduced Investment * Less Capital * Reduced Asset

Answer 5

1. LTD comapnies can choose their Own Shareholders 2. Choose people who match their objective e.g. Passion for Innovation 3. Means Less focus on Short term results as they share goals on R&D + Long term Investment 4. Can Reinvest more capital into R&D / Growth rather than being Pressured to pay Dividends 5. Able to Innovate + Pursue Objectives 6. Differentaite from Competitors in Long term

Answer 6

LTD unable to sell shares on Stock Market Makes it Difficult to raise large amount of Capital Business may find it Difficult to build Scale Limit amount of R&D Less innovation Less Differentiated product

Answer 7

1. Franchisor means allowing Independant businesses to use your Brand name 2. Means Franchisee provides Capital to open new Branches / Stores 3. Reducing Capital required for Expansion 4. Franchisor being able to Expand much Quicker 5. Able to Benefit from Marketing EOS 6. Fixed costs of Advertising spread over More units 7. Lower Fixed cost per units = Advertising More Affordable 8. Able to Increase Marketing Budget + Advertise More 9. Build Stronger Brand

Answer 8

1. Franschisor Risk at damaging Brand Reputation 2. As Franchisor not responsible for day to day running of outlet 3. Franchisee may fail to uphold High level of Customer Service 4. Due to lack of Supervison from Franchisor 5. Poor Customer Service in 1 outlet affects Reuptation of others 6. Customers may Switch to Rival Businesses 7. Reducing Sales Revenue 8. Reducing Gross Profit

Answer 9

1. Franchisee means paying to use another Businesses Brand 2. Means they already have access to well known brand 3. Meaning there are already customers who have Brand Loyalty 4. Business More Price InElastic 5. Franchisee can charge Higher prices than independant Businesses as customer willing to pay them 6. Increased Revenue + Profit Margins 7. More Retained Profit to Reinvest to open furhter Franchises

Answer 10

1. Franchisee means paying to use another Businesses Brand name 2. Leads to Higher Costs as Fees and Royalties will need to be Paid 3. Leading to Increased Cash outflows 4. Lower Net Cash Flow 5. Reducing Cash Reserves 6. Lower Liquidity ( Acid test Ratio) 7. Unable to pay day to day bills such as rent / suppliers 8. Forced to sell Non current assets in order to pay bills 9. Unable to Operate

Answer 11

1. Have gone through Stock Market Flotation 2. Therefore their shares are advertised to and accessible to the Public 3. Due to this they can Sell large Volume of Shares = Sig Amount of capital being Generated 4. Increased Cash Available to Invest in Non Current Assets so Business can Build Scale

Answer 12

1. Means Leaders will consider Employee welfare when Making Decisions 2. Employee input may be listened to but decision making still controlled by Leader 3. May mean that ideas ( be specific) suggested by Subordinates Ignored by Leader 4. Reduction in Innovation 5. Product less Differentiated 6. Loss of Competitive Advantage 7. Explain Drawback

Answer 13

1. PLC companies shares Sold to the Public 2. Therefore, there is More pressure From Shareholders for Short Term Profits 3. So Business may neglect Long Term Objectives for Short term Returns 4. To satisfy shareholders by using Profits to pay regular Dividends 5. Neglecting Investment into R&D to develop innovative Products 6. Product becomes less Differentiated in Long Term

Answer 14

1. Autocratic leadership means that all decisions made by Leader 2. No delegation or Consultation 3. Ensures Quick Decision Making 4. Business able to quickly adapt to changes in Trend 5. Identify Example 6. Increased Differentiation / Low Costs - Explain how this links to Business

Answer 15

1. Means Leaders will consider Employee welfare when Making Decisions 2. Whilst still maintaining full control of Decision making Process 3. Employees Esteems needs Met ( Maslow) 4. As their Welfare is Important to Leader, employees will feel valued by organisation 5. Increased Employee Motivation 6. Explain Importance of Motivated Work Force 7. Link to Relevant Benefit to Business

Answer 16

1. Autocratic leadership means that all decisions made by Leader 2. No delegation or Consultation 3. Employees don't feel valued by Organisation 4. As they are not included in Decision making Process 5. Esteem needs not Met ( Maslow) 6. May become Demotivated 7. Explain Drawback of Demotivated Workforce, reference Case

Answer 17

1. Means that leader involves Employees in decision making Process 2. Means employees will have Greater level of Responsibility and Authority 3. Increased responsibility will Means employees fell recognised By leader 4. Meeting Esteem Needs Maslow 5. Increased Motivation 6. Explain Importance of this 7. Link to Benefit of Business

Answer 18

1. Means that leader involves Employees in decision making Process 2. May delay Decision Making Process 3. Business fails to adapt to changing trends 4. Loss of First mover Advantage 5. Product Less differentiated 6. Loss of Competitive Advantage 7. Explain Drawback of this

Answer 19

1. Delegates full responsibility for decision Making to employees 2. Means employees will have Greater Level of Responsibility + Authority 3. Increased Responsibility will mean employee's feel recognized by leader 4. Meeting Esteem Needs ( Maslow) 5. Increasing Employee Motivation 6. Explain importance of Motivated Workforce

Answer 20

1. Delegates full responsibility for decision Making to employees 2. Means employees will have Greater Level of Responsibility + Authority 3. To ensure effective Decision Making Employees must Posses Necessary Skills 4. If not Employees may feel overwhelmed with lack of direction 5. Hygiene Factors not Present ( Herzberg) 6. Employees become Demotivated 7. Explain Drawback of Demotivated Workforce

Answer 21

- Believing your approach will carry over into any Marker - Often case in UK businesses for companies who have brands built around “being British” e.g. Burberry

Answer 22

- Adapting your marketing strategy for every Market - Case for Less differentiation therefore less unique selling point = need to adapt to be competitive

Answer 23

Mixed approach that takes advantage of transferable marketing approach, also adapting certain parts of Marketing mix where appropriate E.g Apple make changes + coco cola changing size of packaging

Answer 24

1. Market Penetration – The concept of increasing sales of existing products into an existing market 1. Least risky 2. Increasing marketing efforts or streamlining distribution processes 3. Decreasing prices to attract new customers within the market segment 4. Acquiring a competitor in the same market 2. Market Development – Focuses on selling existing products into new markets 1. 2nd least risky 2. Catering to a different customer segment or target demographic 3. Entering a new domestic market (regional expansion) 4. Entering into a foreign market (international expansion) 3. Product Development – Focuses on introducing new products to an existing market 1. Investing in R&D to develop an altogether new product(s). 2. Acquiring the rights to produce and sell another firm’s product(s). 3. Creating a new offering by branding a white-label product that’s actually produced by a third party. 4. Diversification – The concept of entering a new market with altogether new products 1. Highest risk endeavor 2. Both product development and market development are required