Understanding business Flashcards
what are the disadvantages of a partnership?
- The profit that is made is shared.
- Partners may not always agree.
- You have unlimited liability.
what are the economical factors?
- Exchange rates.
- Disposable income.
- Level of employment.
- Interest rates.
What are the social factors?
- More women in work.
- More people buying their own homes.
- People against animal testing on cosmetics.
- Increased car ownership.
What is limited liability?
- When the owners personal possessions are not at risk.
- They only lose what they put into the business (For example 50k).
Who are the external stakeholders?
- Local communities.
- Local governments.
- National government.
- Customers.
What is unlimited liability?
- The opposite of limited liability.
- The owners personal belongings can be taken off of them if they are unable to pay of debt.
What are the sectors of economy?
- Public.
- Private.
- Third.
What are the sectors of industry?
- Primary.
- secondary.
- Tertiary.
Who are the internal stakeholders?
- Owners.
- Employees.
- Shareholders.
Who owns, controls and finances the private sector?
- Owned by private individuals.
- Controlled by private individuals.
- Financed by retained profits.
What are the competition factors?
- Location.
- Growth/size.
- Price wars.
- Product/service being offered.
- Intimidation.
What are the consequences of poor customer service?
- Decrease in profits.
- Bad reputation.
- Loss of market share.
- Loss of competitive edge.
- Low staff morale.
What are the environmental factors?
- Storms.
- Recycling.
- Floods.
- Climate change.
- Pollution.
What are the political factors?
- Smoking ban in public places.
- Health and safety regulations.
- Increase in petrol prices.
- Taxes.
- Advertising and promotion of alcohol.
What is the aim of the private sector?
To make a profit.
What is the aim of the third sector?
To provide services to a worthy cause.
What are the disadvantages of being a sole trader?
- You have unlimited liability.
- You have to work long hours with little holidays.
- It can be difficult to finance.
What are the external factors?
- Political.
- Economical.
- Social.
- Technological.
- Environmental.
- Competition.
What are the benefits of good customer service?
- Customer loyalty.
- Improved reputation.
- Employee satisfaction.
What are the factors of production (CELL)
- Capital.
- Enterprise.
- Labour.
- Land.
Why do businesses exist?
- To provide goods and services.
- To provide employment.
- To provide choice.
- To innovate.
- To create competition.
- To develop infrastructure.
- To supply worthy causes.
- To increase and individuals wealth.
What are the business objectives?
- Survival.
- Profit.
- Provision of a service.
- Customer satisfaction.
- Enterprise.
- Social responsibility.
- Marketshare.
Why do businesses exist?
- To provide goods and services.
- to provide employment.
- to provide choice.
- to innovate.
- to create competition.
- to develop infrastructure.
- to supply worth causes.
- to increase an individual wealth.
What are the factors of production (cell)?
capital
enterprise
labour
land
what are the benefits of good customer service?
customer loyalty
improved reputation
employee satisfaction
What are the external factors?
political economical social technological enviromental competition
what are the benefits of being a franchise
the franchise is a well known business with an existing customer base
industry knowledge and training is provided
franchises benefit from national ads
Wha are the advantages of a partnership?
the workload is shared
it will be easier to raise capital to finance the business
what are the benefits of being a sole trader?
you get to make your own decisions
it’s easier to set up
you get to keep 100% of the products and profits
What are the disadvantages of a public limited company
Can lose control of the business
profits are shared amongst the shareholders
what is a stakeholder
a person or group of people who have an interest in the success of the business
name the aim and samples of the public sector
the aim is to provide services either locally or nationally
examples are schools, the NHS and BBC
what are the technological factors
growth of the internet
computer controlled machines
e-commerce
firms must keep up with new technology
what are the disadvantages of a private limited company
the profits must be shared among shareholders (dividends)
there is a restricted number of shareholders
you must produce annual accounts which competitors can access
what are the advantages of a private limited company
experience and skill will be gained from having multiple shareholders
control of he business is not lost to outsiders as it is invite only
what are the internal factors
financial
Human Resources
current technology
what are the disadvantages of being a franchise
this is a high initial fee
you have little autonomy over decisions
royalties must be paid each year
what is a franchise
a business model that allows businesses to pay a sum of money to own a brand of a well known existing business
what are the benefits of a public limited company
huge amounts of finance can be raised (on the Stockmarket)
experience can be gained
