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A LEVEL BUSINESS > Unit 1- what is a business > Flashcards

Unit 1- what is a business Flashcards

1
Q

what are goods

A

physical or tangible products

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2
Q

what is a service

A

non physical items

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3
Q

what is business to business

A

it is one business selling to another business

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4
Q

what is business to consumer

A

it is one business selling directly to its consumers

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5
Q

what is a business

A

an organisation that makes good or provides services to satisfy customer needs

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6
Q

what is the transformation process

A

any activity or group of activities that takes one or more inputs, transforms and adds value to them, provides outputs for customers

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7
Q

what is added value

A

is an amount added to the value of a product or service

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8
Q

what is the calculation for added value

A

difference between its cost and the amount received when it is sold

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9
Q

what are the four key inputs needed by businesses

A
  • land
  • labour
  • capital
  • enterprise
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10
Q

what does the primary sector do

A

extracts or develops natural resources

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11
Q

what does the secondary sector do

A

make use of extracted primary materials to build, manufacture or develop finished goods

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12
Q

what does the tertiary sector do

A

provides services needed to meet the needs of the end users

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13
Q

what is a mission statement

A

short statement of a businesses purpose and focus

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14
Q

what is an objective

A

a goal to help a business achieve its mission

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15
Q

what are corporate objectives

A

those that relate to the business as a whole

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16
Q

what are functional objectives

A

set for each business function/department

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17
Q

what is cash flow

A

the movement of money in and out of the business

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18
Q

what are business objectives

A

objectives are statements of specific outcomes that are to be achieved

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19
Q

what are fives examples of objectives

A
  • desired sales or profit levels
  • rates of growth
  • value of the business or dividends paid to shareholders
  • an innovative player in the market
  • a leading in the quality of customer service
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20
Q

what is the mission

A

is the overriding goal of the business and the reason for its existence.

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21
Q

what does the mission provide

A

a strategic perspective for the business and a vision for the future

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22
Q

what are the four things that make an effective mission statement

A
  • differentiates the business from the competitors
  • defines the markets or business in which the business wants to operate
  • is relevant to all major stakeholder
  • excites, inspires, motivates and guides
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23
Q

what is the acryonym that people believe the target should meet

A

SMART

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24
Q

what does the S stand for in SMART targets and what does it mean

A

Specific; the objective should be clear, precise and well defined

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25
Q

what does the M stand for in SMART targets and what does it mean

A

measurable; an objective should be capable of measurement so that is possible to determine whether it has been achieved

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26
Q

what does the A stand for in SMART targets and what does it mean

A

achievable; the objective should be possible given the circumstances in which it is set and the resources available to the business

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27
Q

what does the R stand for in SMART targets and what does it mean

A

realistic; the objective must be challenging but possible to achieve given the capabilities of people

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28
Q

what does the T stand for in SMART targets and what does it mean

A

time bound; objectives should be set with a time frame in mind. these deadlines also need to be realistic

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29
Q

who would suit having the objective to survive

A

for a small business who is just starting out

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30
Q

what is profit

A

money left once costs have been paid

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31
Q

what is profit maximisation

A

try to make the most profit possible

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32
Q

when does short termism arise

A

when a business priorities short term rather long term performance

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33
Q

what is profit satisficing

A

try to make enough profit to keep the owners comfortable

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34
Q

what is growth

A

expanding the business

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35
Q

what is sales growth

A

where the business tries to make as many sales as possible

36
Q

what is cash flow

A

having sufficient amount of money immediately available to pay day to day debts

37
Q

what is ethical

A

beliefs on how one should treat the environment and those who are less fortunate

38
Q

what is social

A

the service will need to meet the needs of the less well off in society or help improve the ability of the economy to function

39
Q

what is the calculation for profit

A

revenue - total costs

40
Q

what is revenue

A

money received from sales

41
Q

what is the calculation for revenue

A

number of units x price per unit

42
Q

what are variable costs

A

costs that vary with the level of output

43
Q

what is the calculation for total variable costs

A

number of units x variable cost per unit

44
Q

what are fixed costs

A

costs that do no vary with the level of output

45
Q

what is the calculation for total costs

A

fixed costs + variable costs

46
Q

what are three examples of fixed costs

A
  • salary
  • rent
  • insurance
47
Q

what are three examples of variable costs

A
  • wage
  • raw materials
  • shipping
48
Q

what is the private sector

A

made up of business owned by individuals or group of individuals

49
Q

what is the public sector

A

made up of businesses owned by the government

50
Q

what is a sole trader

A

is a business is not registered and owned by one person

51
Q

what is a private limited company (ltd)

A

is a company owned by shareholders, the shares can only be brought privately

52
Q

what is a public limited company

A

owned by shareholders, the shares can be bought on the stock exchange

53
Q

what is social enterprise

A

businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community

54
Q

what are mutuals

A

businesses that don’t have shareholders or other owners. they are owned by members

55
Q

what is a key feature of a sole trader

A

is an unincorporated business so the business is inseparable from the business owners. the owner is responsible for the debts

56
Q

what are three advantages of a sole trader

A
  • cheap to set up
  • gives the owner more freedom
  • owner takes all the profit
57
Q

what are three disadvantages of a sole trader

A
  • unlimited liability
  • limited capital
  • limited skills
58
Q

what is a key feature of a private limited company (LTD)

A

it is registered with companies house and has a separate identity to the owners

59
Q

what are three advantages of a private limited company (LTD)

A
  • protection from debt
  • limited liability
  • access to more capital
60
Q

what are three disadvantages of a private limited company (LTD)

A
  • shares less attractive
  • less flexibility
  • more legal formality
61
Q

why is a key feature of a public limited company (PLC)

A

it can be registered on a public stock exchange

62
Q

what are three advantages of a public limited company (PLC)

A
  • limited liability
  • easy to raise finance
  • gain public positivist
63
Q

what are three disadvantages of a public limited company (PLC)

A
  • everything is public
  • lots of administration expenses
  • greater scrutiny of activities
64
Q

what are not for profit organisations

A

businesses with an objective other than profit. this may be to provide a social benefit or service to society or support a cause

65
Q

what are 3 examples of a not for profit organisations include

A
  • mutuals
  • charities
  • social enterprises
66
Q

what is the definition of a shareholder

A

is a person who owns a share in a company

67
Q

what is a share

A

is an individual part of the total issued share capital of a company

68
Q

what is a dividend

A

is a payment from the profits made by a company to shareholders

69
Q

what is capital growth

A

an increase in the value of shares

70
Q

what does market capitalisation represent

A

the total market value of the issued share capital of the company

71
Q

what is the market capitalisation formula

A

number of shares issues x price of a share

72
Q

how does capital growth arise

A

an increase in the value of the business leading to an increase in the share price

73
Q

what are 3 internal factors that will influence the price per share

A
  • company performance
  • dividend policy
  • leadership reputation
74
Q

what are 3 external factors that will influence the price per share

A
  • global economic factors
  • competitive environment
  • scandals/ rumours
75
Q

what is competition

A

is the rivalry between companies selling similar products and services with the goal of achieving the revenue, profit, and market share growth

76
Q

what are interest rates

A

the cost of borrowing money

77
Q

what are demographics

A

are the characteristics of the population

78
Q

what is fair trade

A

way of trading with suppliers that offer better prices, decent working conditions and a fairer deal for farmers and workers in developing countries

79
Q

what does the P is PESTLE(C) stand for

A

political

80
Q

what does the E is PESTLE(C) stand for

A

economic

81
Q

what does the S is PESTLE(C) stand for

A

social

82
Q

what does the T is PESTLE(C) stand for

A

technological

83
Q

what does the L is PESTLE(C) stand for

A

legal

84
Q

what does the E is PESTLE(C) stand for

A

ethical

85
Q

what does the C is PESTLE(C) stand for

A

competition

A LEVEL BUSINESS (5 decks)

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