Theme 2 Practise Qu's Flashcards
(1)
What is economies of scale?
Increasing OUTPUT whilst cost per unit is LOW.
(1)
What is organic/internal growth
Growth of the firm from WITHIN.
(1)
What is a public limited company?
A company that sells its shares on the stock market where the PUBLIC can BUY it.
(1)
What is a trade bloc?
2024
Regional Free Trade
(1)
What is an import?
Bringing something FROM ABROAD.
(1)
What is an export?
Selling TO ABROAD.
(1)
What is meant by globalisation?
Where a firm is able to locate ACROSS THE WORLD.
(1)
What are tariffs?
Taxes on imports.
(1)
What is Just In Time?
Running the firm with LITTLE STOCK that new supplies arrive BEFORE running out.
(1)
What is quality?
The measure of excellence where a product/service MEETS THE STANDARDS set by CUSTOMERS.
(1)
What is productivity?
Measurement of how much EACH WORKER PRODUCES.
(1)
What is efficiency?
When a firm uses LESS WASTEAGE on their products.
(1)
What is logistics?
How the products will be ORDERED AND DELIVERED ON TIME.
(1)
How does an indirect distribution channel work?
Producer –>Wholesaler –> Small Store –> Customer.
(1)
What is one method of promotion?
- Advertising
- Sponsorship
- BOGOF
(2)
Which two are part of the design mix?
A) Price
B) Function
C) Promotion
D) Cost
E) Quality
B) Function
D) Cost
(2)
Which two of the following are documents produced by a business at the start of
the recruitment process?
A) Application form
B) Curriculum vitae (CV)
C) Job autonomy
D) Letter of application
E) Person specification
A) Application Form
E) Person specifcation
(2)
Which two of the following are services?
A) Accountancy
B) Biscuits
C) Furniture
D) Hairdressing
E) Shoes
A) Accountancy
D) Hairdressing
(2)
Which two of the following are stages of the product life cycle?
A) Birth
B) Cancellation
C) Decline
D) Growth
E) Marketing
C) Decline
D) Growth
(2)
Which two of the following are elements of the marketting mix?
A) Cost
B) Function
C) Materials
D) Price
E) Product
D) Price
E) Product
(3)
Explain one disadvantage to a business of using a just in time (JIT) system of
stock control.
- Firm not able to buy in BULK.
- JIT system results in FREQUENT, SMALL orders placed for RAW MATERIALS.
- Average VARIABLE COSTS INCREASE.
(3)
Explain one advantage to a business of having motivated employees.
- Firm benefits from PRODUCTIVITY.
- Motivated employees = more output PER PRODUCT
- Total Profit Margin RISES.
(3)
Explain one impact on a business of using flow production.
- Increase in AUTOMATION.
- More OUPUT of products due to PRODUCTIVITY
- Cost PER UNIT falls.
(3)
Explain one reason why a business may decide to reduce the size of its workforce.
- Increase in TECHNOLOGY.
- Able to REPLACE EMPLOYEES.
- Increases PRODUCTIVITY via TECHNOLOGY.
(3)
Explain one impact on a business of introducing job rotation.
- Enables FLEXIBILITY.
- Employees able to work at different SHIFTS.
- Production doesnt HALT even when employees are ABSENT.
(3)
Explain one reason why a firm might increase its product range.
2024
- Increases CUSTOMER ATTRACTION.
- DIFFERENT products will tailor towards DIFFERENT CUSTOMER NEEDS.
- Increases SALES.
(3)
Explain one advantage of the firm using (JIT) Stock Control.
2024
- Able to hold LESS STOCK
- Doesnt have to incur costs of WAREHOUSING STOCK.
- Firm has BETTER NET CASH FLOW.
(3)
Explain one impact on a business if tariffs are placed on its imports.
- HIGHER COSTS
- Firm has to pay more for their IMPORTS.
- Reducing (Net) PROFIT MARGIN of the firm.
(3)
Explain one method that a business could use to reduce its
environmental impact.
- Reduce amount of PACKAGING used.
- Less resources (plastic) are used.
- PRESERVES NON - RENEWABLE resources (Oil).
(3)
Explain one method that a business could use to extend the life cycle of one of
its products.
- REDUCE PRICE on product
- Product stands out BETTER VALUE FOR MONEY than rivals’ products.
- Sales of product should RISE.
(6)
Discuss the disadvantages of improving productivity to a firm.
2024
P1:
- Higher costs.
- Firm may invest in TECH or employee training.
- Net Profit decreases –> NPM decreases.
P2:
- Decreases motivation of employees
- Improving Productivity = HIGHER OUTPUT per EMPLOYEE.
- Firm could face INCREASING STAFF TURNOVER.
(6)
Evaluate the impact of ethical and environmental considerations on a business’s decision-making.
Pros:
- Improving reputation.
- Act ethically and SUSTAINABLY towards CUSTOMERS.
- Increases CUSTOMER LOYALTY.
Cons:
- Increasing prices
- Cost of sustainable raw materials may be HIGH
- Customers will less likely purchase because of HIGH PRICES.
(9)
A firm has two options:
Option 1: Selling assets
Option 2: Invest in share capital.
2024
Selling Assets:
+ Able to raise cash
+ Selling personal items that they dont need.
+ Reduced liability
- Decreased competitive advantage
- Valuable items are sold
- Weakens firm’s market position.
Share Capital:
+ Large sums of capital raised
+ No repayment required
+ Firm maintain POSITIVE NET CASH-FLOW
+ Attracts INVESTORS
+ Able to invest with other investors
- Hostile takeover
- Investors take >= 50% OF TOTAL SHARES
- Firm is VULNERABLE to LIABILITY
- Firm put under pressure to meet INVESTORS’ REQUIREMENTS
- INCREASED Profit sharing.
- Reduces control of firm.
(3)
Explain one method of the Sales Process that will affect the business’s survival.
- PRODUCT KNOWLEDGE.
- Employees must know WHERE and WHAT the products ARE and ABOUT.
- Increases CUSTOMER SATISFACTION.
(3)
Explain a drawback of a firm contributing to quality control when making its products.
- Time consuming.
- Many DEFECTS are produced.
- Product has to be REPRODUCED FROM SCRATCH if NOT meets STANDARDS of CUSTOMERS.
(3)
Describe the impact of a firm having a good relationship with its suppliers.
- Improved logistics
- The right raw materials obtained from the RIGHT SUPPLIERS ONTIME.
- Able to boost customer satisfaction.
(3)
Describe the disadvantages of a firm using quality assurance.
- Changes CULTURE OF FIRM
- Employees have to check at EVERY STAGE in PRODUCTION LINE
- Time consuming.
(5)
Outline 5 factors of the Sales Process
- Customer engagement
- Product Knowledge
- Speed and Efficiency of Service
- Customer Feedback
- Post - Sales Service.
(3)
Explain one impact that a pressure group can have on a business
- May damage BRAND IMAGE of firm
- Potential customer may go to ETHICAL brands
- Sales of firm will FALL.
(5)
State the 5 stages of the Product Life cycle.
- Introduction
- Growth
- Maturity
- Decline
- Extension Strategy.
Explain an advantage of a firm using a sponsorship to promote its products.
2024
- Gaining customer ATTACTION.
- By sponsoring something, the brand will be WIDELY RECOGNISED.
- This can lead to improved customer loyalty.
