Unit 2- Economics Flashcards
What is product orientation?
Matching a companies capability with customer wants
What is market orientation?
Where the needs of a customer are overriding the priority in production, meeting the needs of the goods and services
Why do you want to increase market share, list 3 reasons?
Increases market power
Greater brand awareness
Increasing the volume of sales, therefore leading to economy of scales
What is market share?
Is how much a firm owns a percentage of the market, for example the phone market is worth £4bn and apple own 25% of the market, the have £1bn
What’s a market?
Is any medium in Which buyers and sellers interact and agree to trade at a price.
How can market leaders expand market share?list 2 reasons
Take overs- (buying out a business to reduce competition)
Developing new product within the market
Name 5 things how firms with the largest market share have advantage over competitors?
The set the bench mark with pricing Advertisement Technology expertise Rate of production Competitive advantage
What are market challengers?
They have lower market share than leaders but share high aspirations. They try to challenge the market leader upon building there percentage of the market.
what is PINTSWC a condition for?
Supply
What’s PASIFIC a condition for?
demand
what does PINTSWC stand for?
productivity, indirect taxes, number of firms, technology, subsides, weather and cost of production.
what does PASIFIC stand for?
population, advertising, substitutes, income, fashion and trends, interest rates and complementary goods.
what does dynamic mean?
the way in which the market changes with economy.
if supply increases which way on the graph does it go?
to the left.
if the supply increases within in a business, can they lower or increase their pricing?
lower as there demand is increasing aswell as supply.
what is a pricing strategy?
describes how a business meets the requirement of it’s market.
what is profitability?
money which is earned in trade or business, especially after paying the costs of producing and selling your goods and services.
What can market leaders do? List 4 things?
bench mark- they set the pricing levels.
Technology expertise, as they are the biggest firm more advanced people would want to work for them..
rate of production, so they set how much is supplied to each store/retailor etc..
They can expand their market share by buying out other companies “take overs”..
Advertising- as they are the biggest brand, they have more money than other firms to advertise their business further.
Name the 2 organisation structures within a business?
Tall and Flat.
What is a Tall structure?
more employees, it has more layers of staff under the CEO.
What is a Flat structure?
they have more layers of staff. For example have 3 mangers under one segment. This business structure is more spread out.
name 3 things that are within a Tall structure?
..more managers. (AD)
.. Tighter control, so less delegation.(DIS)
.. more opportunities for promotion. (AD)
.. more expensive for the business as their are more employees. (DIS)
What is a “span of control”?
people someone controls.
Name 3 things that are in a Flat structure?
less staff, so save money (less layers)
less employees but experts.
wider span of control.
shorter communication patterns.