Understanding business Flashcards
Explain possible effects of the external factor (political) on a organisation.
-decrease in taxes will give customers more disposable income.
-the government could award grants, which do not need to be paid back.
Explain possible effects of the external factors (economic) on a organisation.
- Interest rates could decrease , which means customers would be more likely to borrow money to buy products.
-unemployment could be low which means prices could be raised.
Explain possible effects of the external factors ( technological) on an organisation
- introducing E-commerce can lead to a worldwide market.
- social media can be used to increase customer awareness of a business.
Justify use or market segmentation
-allows to establish target market.
-products are developed that suit a particular market segment
-reduces cost
Describe use of technology in marketing
-social media- specific markets can be targeted.
-software -charts can be produced to analyse trends in sales.
-Email- contact stakeholders over wide geographical area.
Methods of production
Job , batch and flow
Describe job production
-labour intensive
- unique products.
- single product.
Describe batch production
- groups of products
-standardised batch. - mix of capital and Labour.
State 2 features of the equality Act
Makes it illegal to discriminate.
- illegal to victimise.
Features of health safety at work act
- ensures equipment is safe to use.
-provide protective clothing.
Safety issuesemployees must report.
Describe sales revenue
Income received from customers.
Describe cost of sales
Amount spent on inventory
Gross profit
Profit made after cost of sales I’d deducted from sales revenue
Describe advantages of spreadsheet software
-use of formulas
-automatic calculator reduces human error.
-lined worksheets can be used.
Benefits of good customer service policy
-enhances the organisations reputation.
-good publicity from happy customers
-loyal customers.
How to improve customer service
Making sure employees are trained.
-having a customer care strategy
Define the term stakeholder
A person or a group of people interested in an organisations success
External stakeholders/sectors of economy
Public private third
Example of private
Shareholders/owners.
Banks.
Government.
Customers.
Example of third
Donors.
Recipients.
Board of trustees.
Example of public
Taxpayer.
Suppliers.
NHS
Internal stakeholders
Owners.
Managers.
employees.
Influence pressure groups can have on an organisation
They can decide staffing levels and what new products the business will introduce.
Influence suppliers can have on an organisation
They ça take industrial action , for example strike.
Influence managers have on an organisation
If they are not happy with the service offered by the business , they can go elsewhere, eg rival.
Influence lenders may have on an organisation
They can change prices , credit arrangements and sucount rates short notice.
Influence employees have on an organisation
They can withhold the offer of a loan change interest rates to be paid on loans.
Influence customers have on an organisation
They can protest and raise awareness if a business is polluting or damaging the enviroment.
Private sector aims to
Turn innovative ideas into successful businesses
Public sector aims to
Make good use of taxpayers money and provide services needed.
Third sector aims to
Provide support for worthy causes.
PESTEC stands for
Political, economic, social,technology , environmental and competitive
Political factor
Laws and legislation .
For example minimum wage
Economic factor
Inflation rates.
Exchange rates.
Social factor
More women in work in todays modern times, therefore supermarkets provide ready made meals
Technology factor
Increase of new technology, business must keep up to date the remain competitive
Environmental factor
Businesses are more aware of the need to be environmentally friendly
Competitive factor
New advertising price.
Lower selling price.
What is a sole trader
Q business owned by one person
What is a partnership
2-20 people
What is a private limited company
A company owned by people who have been invited to buy shares
What’s a public limited company
Company which has public shareholders
What’s a franchise
Arrangement when a firm pays for the right to trade under another name
Advantages of sole trader
Easy to set up.
All profits are theirs.
Flexible schedule.
Disadvantages of a sole trader
Alor of responsibility.
Unlimited liability.
Advantage of a private limited company
Limited liability.
Can keeps info private.
Disadvantages of private limited company
Difficult to manage.
Expensive.
Advantage of public
Raise money easily
Disadvantage of public
Descison making is difficult
Advantage of franchise
Franchiser can open more branches without having to buy premises or pay staff.
Disadvantage of franchise
No control over how business is run
What is a good
Something you can touch
Tangiable
What is a service
Something g you cannot touch
Intangible
What is the primary sector
Businesses that extract natural goods from earth
Fishermen.
What is the secondary sector
Manufacturing natural goods
Shipbuilding.
What is the tertiary sector
Provide a service
Hairdressers.
What is the quaternary sector
Provides knowledge and info services.
Scientific research.
Factors of production
Land Labour capital enterprise
Land is
The natural resources businesses use eg wood
Labour is
The workforce of the business eg employees
Capital is
Man made resources eg machinery
Enterprise is
An entrepreneur uses land Labour and capital to achieve an idea.
