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Business GCSE (EdExcel) > Theme 2 > Flashcards

Theme 2 Flashcards

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1
Q

What is external (inorganic) growth

A

Joining forces for a business to grow

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2
Q

What is internal (organic) growth

A

Selling more output over a period of time and growing

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3
Q

What is a merger

A

Two or more businesses voluntarily agreeing to join up and work as one business

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4
Q

What is a takeover

A

Where one business buys another

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5
Q

Name two benefits of internal (organic) growth

A

Helps to increase market share

Less risk than external growth

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6
Q

Give two benefits for external (inorganic) growth

A

Competition can be reduced

Market share can increase overnight

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7
Q

Give two drawbacks of internal (organic) growth

A

Slow growth

Growth is dependent on the overall market

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8
Q

Give two drawbacks if external (inorganic) growth

A

Can be expensive to merge/ takeover

Managers may lack experience to deal with the other businesses

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9
Q

Give three methods of internal (organic) growth

A

New markets
New products
New technology

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10
Q

Give a benefit and drawback of retained profit (internal)

A

+ involves no risk or debt

- profit is not guaranteed

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11
Q

Give a benefit and a drawback of selling assets (internal)

A

+ Quick way of raising capital

- looses the benefit of owning the assests sold

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12
Q

Give a benefit and drawback of loan capital (external)

A

+ once applied for the process is quicker

- interest & fixed repayments can affect cash flow

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13
Q

Give a benefit and drawback of share capital (external)

A

+ can raise considerable capital

- risk control of the business & dividends

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14
Q

Give a benefit and drawback of stock market flotation

A

+ quick way to receive capital

- risk control & shareholders may lack experience

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15
Q

Give two reasons why business aims & objectives change (externally)

A

New competitors

New legislation

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16
Q

Give two reasons why business aims & objectives change (internally)

A

Change in working culture

Change in business’ leaders

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17
Q

What is the definition of globalisation

A

Where businesses operate internationally and gain a lot of influence or power

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18
Q

State three ways globalisation can impact a business

A

Imports (cheaper raw materials & competition)
Exports (growth opportunities & problems)
Location ( opportunity to relocate closer to important factors)

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19
Q

What is the definition of a tariff

A

A tax added to the price of an import

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20
Q

What is the definition of trade blocs

A

A group of countries that work together to provide special deals for trading

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21
Q

Give two ways in which businesses can compete internationally

A

E- commerce (24/7 & no need for foreign retailers)

Globalisation ( adapting product to culture)

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22
Q

What is the definition of ethics

A

Weighing up decisions or actions on the basis of morality not personal gain

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23
Q

What is the definition of trade-off

A

How having one thing may force a business to have less of another

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24
Q

What is the definition of a pressure group

A

A group of people who join together to try to influence government or business policy for a particular cause

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25
Q

Give three elements of the design mix

A

Aesthetics
Function
Cost

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26
Q

What is the definition of a product life cycle

A

A business model that represents the sales of a product through different stages

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27
Q

What is a definition of extension strategies

A

Slightly changing the product so that is has a fresh appeal to the target market

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28
Q

What are the four stages in a product life cycle

A

Introduction
Growth
Maturity
Decline

29
Q

Give two ways differentiating helps businesses

A

Helps to position their products and target different market segments
Helps to gain competitive advantage when facing competition

30
Q

Give three influences on pricing stategies

A

Competition
Branding
Product life cycle

31
Q

What are three reasons why business use promotion

A

Inform consumers of a new product / service
Persuade consumers to purchase
Remind consumers of the benefits of that product

32
Q

Give three promotional strategies

A

Advertising
Sponsorship
Special offers

33
Q

Give three ways technology can be used in promotion

A

Email
Social media
Apps

34
Q

What is the purpose of business operations

A

To organise, produce and deliver the goods and services provided by a business

35
Q

What is Job production

A

Production of one-off or bespoke products

36
Q

What is a benefit and drawback of job production

A

+ high profit

- longer production process

37
Q

What is batch production

A

Production of a larger volume of products

38
Q

What is a benefit and drawback of batch production

A

+ some levels of flexibility and automation

- productivity reduced when switching between batches

39
Q

What is flow production

A

Production of high volumes of products

40
Q

What is a benefit and drawback of flow production

A

+ high productivity

- setting up expensive machinery increased costs

41
Q

Give three ways technology impacts production

A

Speeds up the production process
Lowers production costs
Ensures fewer mistakes and defects

42
Q

What is the definition of just in time (JIT)

A

A stock management system where stock is delivered only when it is needed by the production system so no stock is kept

43
Q

What is the definition of procurement

A

The whole process of managing the ordering and receipt of the goods/services in the business

44
Q

Give three factors that lead to the efficient procurement of raw materials

A

Flexibility
Availability
Cost & Quality

45
Q

Give three three impacts in logistics and supply decisions

A

Flexible suppliers can help a business meet customer needs easier
Late deliveries hold up production
Poor quality can lead to dissatisfaction and products returned

46
Q

What is quality control

A

Testing for quality once a product has been made

47
Q

What is quality assurance

A

Focusing on quality at every stage of the production process

48
Q

Why is quality important to a business

A

Can charge a premium price

Builds a string brand image

49
Q

What are the five stages of the sales process

A 
Customer interest 
Speed & efficiency of service 
Customer engagement 
Post- sales service 
Customer loyalty
50
Q

What is gross profit

A

The profit that a business makes before any indirect costs have been deducted

51
Q

What is net profit

A

The actual profit after indirect costs that are not included in gross profit have been paid

52
Q

Calculation for gross profit

A

Sales revenue - cost of sales

53
Q

Calculation of Gross profit margin

A

Gross profit / sales revenue (x100)

54
Q

Calculation of net profit

A

Gross profit - any other expenses and interest

55
Q

Calculation of net profit margin

A

Net profit / sales revenue (x100)

56
Q

Calculation of average rate of return

A

Average annual profit / cost of investment (x100)

57
Q

Give a use and limitation of financial information

A

+ monitor performance of business

- business performance isn’t solely judged on financial performance

58
Q

What are the differences between hierarchical & flat structure

A

H: long chain of command & shorter span of control
F: shorter chain of command & wide span of control

59
Q

Give a benefit and drawback of a hierarchical structure

A

+ easier to control & promotional opportunities

- costly & slow communication

60
Q

Give a benefit and drawback of a flat structure

A

+ clear communication

- no promotion opportunities (= low motivation & retention)

61
Q

What is the difference between a centralised and decentralised structure

A

Centralised: decisions made by head director
Decentralised: decisions delegated to regional branch directors

62
Q

Give a benefit and drawback for a centralised structure

A

+ increased control

- decisions can be slow

63
Q

Give a benefit and drawback for a decentralised structure

A

+ decisions suited to local customers

- loss of control

64
Q

Give three impacts of bad communication

A

Bad employee motivation
Bad customer service
Increased mistakes made

65
Q

Give three reasons why motivation is important in the workplace

A

Can create a hard working & flexible workforce
Attracts & retains hood employees
Improved customer service

66
Q

Give three financial methods of motivation

A

Fringe benefits
Bonuses
Promotions

67
Q

Give three non- financial methods of motivation

A

Job rotation
Job enrichment
Employee reward scheme

68
Q

Calculation of revenue

A

Price x quantity

69
Q

Calculation of variable costs

A

Cost of one unit x quantity

Business GCSE (EdExcel) (2 decks)

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