This Is Business

Question 1

Factors influencing demand and supply

Answer 1

Better performance-bigger dividends-increase demand for shares-increase share price
Interest rates-low-more demand for shares-financial rewards

Question 2

Environmental impact of business

Answer 2

Production processes- traffic pollution and transport
Dumping waste in waterways and seas
Burying or burning waste 
Packaging and landfill
Unsustainable 

Govt legislation stops this
Large fines

Businesses
Control and measure pollution targets
Use of recycled materials (cardboard instead of cans)- can incur costs
Use renewable energy sources

Innocent drinks have good image. Carbon trust increases competitiveness

Question 3

Technology impact

Answer 3

Improves marketing- gather info about customers/lifestyles
Improves production efficiency-reduces costs in long term
Ethical issues-company reputation- effect of demand

Question 4

Stakeholder objectives

Answer 4

Cut costs-increase profits-quality-customers-backfires

Profits-
Employees-paid well
Suppliers- reliable supply
Shareholders-dividends

Takin production abroad to exploit cheap labour-loss of uk jobs
Local community effected bad
Image with customers

Question 5

Factors influencing marketing mix

Answer 5

External:
Competitors can influence price
Spending on promotion
Recruitment and training costs for customer service
Target market
- wealthy will be less price sensitive
- certain market segments see different media promotion (young working people don’t have time to watch tv in the day)
- location
- type of product. Expensive products require more promotion
- good/service
- product life cycle- getting product to market/ decline stage. marketing mix

Internal:
Marketing and corporate objectives
Finances-promotion-niche product
Suppliers tending not to offer credit/discounts to small businesses- prices increase/process
Technology- promotion/ can’t market directly to repeat customers
Brand image- luxury brand higher prices
Knowledge/skills of employees

Question 6

Advantages and disadvantages of technology

Answer 6

Increased productivity and quality 
Reduced waste 
Effective/efficient delivery 
Effective marketing 
Reduced admin and finance costs
Better communication 

Initial costs are high
Maintenance costs
Increased need for staff training
Switch from labour to capital intensive can lead to redundancies

Question 7

Capital intensive production

Answer 7

Cheaper than manual labour in long term
More precise/consistent quality
Work 24/7
Easier to manage

High set up
Inflexible-only suited to one task
Can cause long delays of breakdown
Decreased worker motivation

Question 8

Labour intensive

Answer 8

People are flexible and can be retrained

Cheaper for small-scale production

Question 9

What is price skimming

Answer 9

When new and innovative products are sold at high prices when they first reach the market
They have scarcity value
High price boosts image of product
Price drops after a year/ competitors with imitative products at lower prices exist
Long term strategy to keep brands exclusivity- Apple and ray bans sunglasses
Potential customers put off by high price intialky and customers who bought may be annoyed and frustrated after launch