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Business > Unit 1 business > Flashcards

Unit 1 business Flashcards

1
Q

corporate objective definition

A

a specific performance goal set by senior management for the business to achieve over time.

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2
Q

define functional objective

A

the day-day goal of functions/departments within a business, derived from the overall corporate objectives

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3
Q

what does ansoff’s matrix identify?

A

an appropriate corporate strategy to achieve the objective of growth and the level risk associated with the chosen strategy

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4
Q

what is the aim of portfolio analysis?

A

carry out a detailed evaluation of a full range of products so appropriate strategies can be identified and pursued

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5
Q

what is a distinctive capability?

A

a particular business strength that is very difficult for competitors to copy

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6
Q

Define overpayment in the context of mergers and takeovers

A

Overpayment occurs when the acquiring company pays too much for the shares in a target company, and is unable to recover the investment through increased revenue or cost savings.

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7
Q

define niche market

A

a small market segment with specific needs or preferences that are not being met by mainstream products or services

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8
Q

define ansoff’s matrix

A

a strategic planning tool that helps businesses identify potential organic growth opportunities by analysing their product and market strategies and the risk associated with each one. The four aspects are market penetration, market development, product development, and diversification.

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9
Q

what is a synergy in the context of mergers and takeovers?

A

a benefit resulting from the combination of two or more companies, such as increased revenue, cost savings or improved product offerings.

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10
Q

define risk bearing economies

A

when a firm can spread the risk of failure by increasing its number of products, which lowers the average cost

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11
Q

define takeover

A

when one company purchases another company, often against its will. it buys a controlling stake in the target company’s shares, gaining control its operations

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12
Q

define organic growth

A

organic growth (internal) is growth that is driven by internal expansion using reinvested profits or loans.

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13
Q

What does forward vertical integration involve?

A

a merger or takeover with a firm further forward in the supply chain

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14
Q

what is overtrading?

A

when a business expands too quickly without having the financial resources to support such a quick expansion, leading to a strain on its resources and an inability to meet its financial obligations (lack of liquidity)

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15
Q

what is horizontal integration

A

a firm merges or acquires another firm in the same industry/market, and at the same stage of the production process.

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16
Q

what is the advantage of small firms targeting niche markets?

A

they can target these markets profitably as they have relatively low overheads and do not need to achieve the volume of sales required by larger competitors

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17
Q

define external economies of scale

A

when there is an increase in the size of the industry in which the firm operates. this allows the firm to benefit from lower avg costs generated by factors outside of the business.

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18
Q

4 financial rewards of mergers and takeovers

A

-increased market share
-cost savings as a result of synergies
-increased company value
-higher sales revenue as a result of entering new markets

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19
Q

internal economies of scale

A

a reduction in average costs as a result of the growth in the scale of production within the firm

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20
Q

define extrapolation

A

the prediction of future sales from past data, often done by extending a line of best fit

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21
Q

define investment appraisal

A

comparing the expected future cash flows of an investment with the initial outlay of that investment to see if it will generate acceptable returns

22
Q

formula for total float

A

total float= LFT for the activity-duration of the activity-EST

23
Q

what is discounted cash flow?

A

a method used to calculate the present value of future cash flows by discounting their future value. it accounts for the time value of money and opportunity cost.

24
Q

what is ARR?

A

it compares the average profit per year generated by an investment with the value of the initial outlay

25
Q

what is critical path analysis?

A

a project management tool that calculates the minimum time required to complete a project, identifying activities which of delayed, could delay the entire project

26
Q

what is a decision tree?

A

a quantitative method that traces the outcomes of a decision so that the most profitable decisions can be identified using estimates and probabilities

27
Q

formula to calculate expected monetary value

A

expected monetary value= (expected value of success x probability) + (expected value of failure x probability)

28
Q

what is a pressure group?

A

an organisation that seeks to influence the policies and actions of businesses or governments, with the primary objective of promoting a specific cause or agenda

29
Q

define sustainable sourcing

A

the practice of acquiring raw materials and components from sources that are environmentally and socially responsible

30
Q

define business ethics

A

the principles and norms that govern business behaviour

31
Q

example of a long-term approach to decision making

A

establishing nurturing, meaningful, and lasting relationships with suppliers

32
Q

what is role culture?

A

key decisions are made by those with specific job roles. power lies with those with particular job titles rather than those with desirable skills

33
Q

what is a person culture?

A

individuals with extensive experience and skills are loosely brought together. they have significant power to determine their own decision-making procedures and often work autonomously.

34
Q

what is the stakeholder approach?

A

a business strategy that focuses on interdependencies between stakeholder groups and take steps to ensure that the benefits and drawbacks of its operations are shared equally amongst them.

35
Q

define task culture

A

decisions are made by teams made up of employees with specific skills. Power lies with those with task related skills. emphasises team working and flexibility

36
Q

what is short-termism?

A

the focus of decision making on short-term priorities and objectives, often at the expense of long-term opportunities and goals

37
Q

how can a buoyant local economy increase labour turnover?

A

workers have more choice and may be able to find work opportunities elsewhere

38
Q

define capital employed

A

the total amount of capital invested in a business (total assets-current liabilities)

39
Q

gearing ratio formula

A

gearing=non-current liabilities/capital employed x 100

40
Q

define gearing ratio

A

a measure of the proportion of a company’s capital funded by debt (e.g loans)

41
Q

ROCE formula

A

ROCE=operating profit/capital employed x 100

42
Q

how can a business reduce gearing? ( 3 ways)

A

-repaying loans
-issuing more shares to create further share capital
-retaining more profits to avoid further borrowing

43
Q

define ROCE

A

a measure of how effectively a business uses capital invested to generate profit

44
Q

define statement of financial position

A

it shows the financial structure of a business at a specific point in time, identifies the business’s assets and liabilities, and specifies the capital used to fund the business

45
Q

define ratio analysis

A

extracting info from financial accounts to assess business performance

46
Q

what is the statement of comprehensive income?

A

it shows the income and expenditure of a business over a period of time and calculates the amount of profit made.

47
Q

define a transformational leader

A

someone who brings extensive changes to a business’s aims, objectives, structure and culture with a new strategic direction and vision

48
Q

define divestment

A

the process selling assets or discontinuing investments

49
Q

what is succession planning?

A

it involves identifying and developing current employees who have the potential to move into key roles in the future

50
Q

what is a business continuity plan?

A

it sets out how a business will operate following a serious incident or disaster and how it expects to return to normal as soon as possible

51
Q

define organisational culture

A

the shared values, beliefs ad norms that shape the behaviour and attitudes of employees within a business

Business (4 decks)

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