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Buisness > Understanding Buisness > Flashcards

Understanding Buisness Flashcards

1
Q

Sectors of industry

A

Primary
Secondary
Tertiary
Quaternary

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2
Q

What is the primary sector

A

Concerned with the extraction of raw materials or natural recourses from the land.

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3
Q

What Is the secondary sector

A

Concerned with manufacturing.
Takes raw materials from the primary sector and converts them into new products.

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4
Q

What is tertiary

A

Concerned with providing a service.

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5
Q

What is quaternary sector

A

Consists of those industries providing information services

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6
Q

What are the sectors of economy

A

Private
Public
Third

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7
Q

What is the private sector

A

Owned and controlled by private banks individuals.
Aims to survive and make a profit.
Soletraders, partnerships, private limited companies

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8
Q

What is the public sector

A

Owned and controlled by the government.
Aims to provide a service to the public and are funded by taxes.
National government, local government

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9
Q

What is the third sector

A

Set up to help a cause or provide a service.
Aims to raise money and awareness for a cause.
Charities , social enterprises

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10
Q

Types of businesses in the private sector

A

Sole trader
Partnership
Private limited company
Public limited company
Multinational
franchise

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11
Q

Advantages of a sole trader

A

Easy to set up
Sole traders retain all profits for themselves
Sole trader make all the decisions

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12
Q

Disadvantages of sole traders

A

Can be difficult to raise finance
Unlimited liability
Heavy workload

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13
Q

Advantages of a partnership

A

More equity available to finance the business compared to a sole trader.
Different partners can bring different skills.
Workload is shared.

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14
Q

Disadvantages of partnership

A

Unlimited liability
Profit is shared between the partners
Partners may not always agree on decisions

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15
Q

Advantages of private limited companies

A

Owner can retain control
More able to raise awareness
Limited liability

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16
Q

Disadvantages of private limited companies

A

Must be registered with
The registrar of companies.
High set up costs.
Harder to motivate and control workers.

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17
Q

Advantages of public limited companies

A

Raise more money by selling shares on the stock exchange
Easier to grow and diversify

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18
Q

Disadvantages of public limited companies

A

Disagreements over how to run the company
Threat of take over
Difficult to pursue objectives other than increasing profit

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19
Q

Why would a company want to become a multinational

A

To increase market share
To secure cheaper premises and labour
To avoid tax or trader barriers
Government grants

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20
Q

Advantages of multinational companies

A

Create jobs available
Brings in expertise - improving skills of the workforce
Benifiting from economies of sales
Purchasing economies
Gains technical economies with automated equipment

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21
Q

Disadvantages of multinational companies

A

Exploiting the workforce
Damages reputation
Cultural differences
Difficult to control
Transportation can be expensive

22
Q

Advantages of a franchisor
(Parent company)

A

Guaranteed income
Rapid expansion/growth
Risk is shared
Good ideas can be shared

23
Q

Disadvantages of franchisor
(Parent company)

A

Income from franchisee sales could be less
Risk of damage to the business name/reputation if the franchisee performs poorly

24
Q

Advantages of franchisee
(Individual person)

A

Reputation of franchisor will help buisness to gain customers and sales quickly.
Franchisor will help and support

25
Q

Disadvantages of franchisee
(Parent company)

A

Franchisee has no control over products and prices
Can be expesnive to purchase a franchise
Must purchase all supplies from the franchisor
Has to pay a % of profits to franchisor

26
Q

Objective of a business in the private sector

A

Maximise profits
Provide a good quality service
Survive
Operate ethically
Maximise sales
Growth
Corporate social responsibility

27
Q

Objectives of a business in the public sector

A

Provide a service
Work within a budget
Operate ethically
Serve the local community

28
Q

Objectives of a business in third sector

A

Support a cause
Provide a service raise awareness of a cause
Maximise donations
Operate ethically
Survival
Increase number of volunteers

29
Q

Skills of an entrepreneur

A

Identify a gap in the market
Risk taking
Communication
Determination
Marketing
Decision making
Leadership

30
Q

Ways businesses can measure their customer service

A

Email/written/phone questionnaire
Suggestion boxes
Face to face interviews
Mystery shoppers

31
Q

How can a business maximise customer service

A

High quality products
Trained employees
Customer complaint procedures
After sales service

32
Q

What is a stakeholder

A

An individual or group of people who have an interest in the success of an organisation

33
Q

What are the internal stakeholders

A

Owner/shareholders
Managers
Employees

34
Q

What are the external stakeholders

A

Community
Customers
Suppliers
Banks
Goverment

35
Q

What can be some stakeholder conflicts of interest

A

Shareholder vs customers
Shareholder vs employees
Shareholders vs supplier

36
Q

Examples of interdependence

A

Owners & suppliers - managers need suppliers to provide high quality materials, suppliers need manager to keep buying from them.

Owners & customers - owners need customers to buy their products, customers need high quality products and service.

37
Q

What are the internal factors

A

Finance
Staff
Technology
Corporate culture

38
Q

What is corporate culture

A

The set of values and beliefs that is shared by all people within a business.
Company values
Office layout
Corporate colours
Store layout
Business jargon

39
Q

Advantages of corporate culture

A

Motivated staff
Relaxed working environment
Lower staff turnover
High quality staff are attracted

40
Q

Disadvantages of corporate culture

A

Hard to introduce
Staff have to be aware of changes
Some cultures can be seen as a ‘bribe’
Management can loose focus and control if the culture is too loose

41
Q

What are the external factors

A

Political
Economic
Social
Technological
Enviormental
Competitive

42
Q

Internal methods of growth

A

Launching new products/advertising
Expanding into new geographical markets
Selling to new outlets
Hiring new staff
Franchising

43
Q

External methods of growth

A

Takeover of competition
Merger with competitor

44
Q

Advantages of internal methods of growth

A

No loss of control as outsiders are not involved
Hiring more staff will bring new ideas
Investing in new equipment will increase product capacity
Opening new Brauches means the company can reach new markets

45
Q

Disadvantages of internal methods of growth

A

Can be a slow method of growth
May be limited by the size of the market
Restricted by the amount of finance available

46
Q

What is the external method of growth ‘merged’

A

Is the joining of 2 companies on equal terms
A new business is created

47
Q

What is the external method of growth ‘takeover’

A

When one firm takes control and ownership of another business
There is no need to create a new business

48
Q

What is a de-merger

A

When a conglomerate business splits into separate companies
Shareholders are allocated shares in n the new , separate , companies
Specialists in each type of organisation will separate with their specialised field.

49
Q

What is a divestment

A

Selling of the buisness’s assets

50
Q

Methods of growth

A

Organic growth
Horizontal integration
Vertical integration
Diversification

Buisness (1 decks)

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