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Business Studies A-level > Unit 3.1 > Flashcards

Unit 3.1 Flashcards

1
Q

Business Objectives

A

Aim that business wants to achieve - usually SMART

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2
Q

SMART

A

Specific, Measurable, Achievable, Realistic, Timely

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3
Q

Mission statement

A

Formal phrase that sets out aim of business

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4
Q

Mission objectives

A

-Mission Statement
-Corporate strategy
-Business objectives
-Functional objectives

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5
Q

Why set Objectives?

A

Show the business is progressing in the right direction

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6
Q

Fixed costs

A

Do not vary depending on output

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7
Q

Variable costs

A

Do vary depending on output

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8
Q

Business forms

A

Legal structure in the UK. Most businesses in the UK are private limited companies, but not all

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9
Q

Limited Liability

A

owner of the business has no personal liability for business debts - Owner has a separate legal identity from the business and is NOT liable for payment of debts etc.

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10
Q

Unlimited liability

A

The owner has personal liability for business debts - if there is no money int he business then the owner would need to pay off debts from personal finances

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11
Q

Sole trader

A

Business owned by the owner - have full control over the business’s decision making. - mainly small businesses - have the disadvantage of unlimited liability

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12
Q

Private Limited Company (Ltd)

A

can expand by selling more shares - fiends and family can buy shares - shares cannot be bought by the public - Ltd owners have full control over who can buy shares. - Have benefit of limited liability.

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13
Q

Public limited companies (PLC)

A

Share are mad available on the stock market - needs to issue a prospectus where potential investors are invited to purchase shares before flotation (called an IPO)

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14
Q

Public sector organisations

A

owned by the UK government - Taxes go towards paying for these businesses - 5.2 million people are employed in the public sector

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15
Q

Social enterprise

A

non-for-profit organisations - businesses with with primarily social objectives who excess profit is reinvested for that objective instead of being put back into the business

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16
Q

Influences on business forms

A

objectives of the business
How the business is financed
what products and services are being offered

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17
Q

Ordinary share capital

A

provides investors with voting rights (one vote per share ) and represent proportionate ownership of a company - receive dividend payments depending on a company’s performance.

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18
Q

Market Capitalisation

A

Total value of the company or the total value of the shares in the company

19
Q

Dividends

A

Investors expect to be paid dividends after a company makes a profit

20
Q

Role of shareholders

A

owners of the company and provide financial backing in return for potential dividends

21
Q

Why shareholders invest

A

In hope of return on investment which is better than a bank’s savings account’s, this is there capital gain

22
Q

Influences on share price

A

Supply and demand in the market
Interest rates
Political climate
Management of the company

23
Q

Market conditions

A

Situation of a particular market at a particular point in time

24
Q

Interest rates

A

Cost of borrowing

25
Q

Demographic rates

A

Any factors relating to the structure of a population

26
Q

Fair trade

A

made between businesses in developed countries and developing countries in which fair prices are paid to the producers

27
Q

Social enterprises - Key facts

A

Over 100,000 in the UK
contribute £60billion annually to the economy
Employ 2million people

28
Q

Social enterprises, What?

A

a business that pledges to donate 50% of it’s profits - aim is still to make profit but to also spend some capital om a cause of their choice.

29
Q

Social Value act

A

passed in 2012 - requires all commissioners who produce a service to consider social, economic and enviromental benefits

30
Q

Social enterprises - Examples

A

Tarem Services limited - aims to make sure cleaners are cared for at work - 2006, they gave their employees 6 monthly dividends

31
Q

PESTLE - Political

A

impact that government decisions have on a business - e.g. corporation tax

32
Q

PESTLE-Social Impacts

A

refers to trends which change over time. e.g. = increased migrant workers in UK means = lower wages = lower costs and lower prices.

33
Q

PESTLE-Economics

A

economic growth = growing consumer confidence = more spending.
Also includes inflation, interest rates, and exchange rates.

34
Q

PESTLE-Technological

A

changes in technology give consumers more ways to buy = e.g. more goods from china. Can also include Robotics, E-commerce and automation.

35
Q

PESTLE-Legal

A

laws that effect businesses - categories = consumer laws, employment, laws and environmental laws.

36
Q

External environment

A

anything outside of the business that may have an impact on the way it operates

37
Q

Factors affecting cost and demand: Competition

A

many competitors and high demand = lower prices to attract customers

38
Q

Factors affecting cost and demand: Market conditions

A

type of market a business is going into - includes number of competitors, rivalry and market growth rate

39
Q

Factors affecting cost and demand: Incomes

A

higher incomes mean higher wages = higher costs for the business - however customers will also have more disposable income

40
Q

Factors affecting cost and demand: Interest rates

A

high rates = customers cant borrow money = demand will drop

41
Q

Factors affecting cost and demand: Demographic factors

A

UK now has an older population which leads to an increased demand for mobility products. Culture etc also affect the types of products being sold in an area

42
Q

Factors affecting cost and demand: Enviromental issues

A

being environmentally friendly can lead to higher costs but also higher demand

43
Q

Factors affecting cost and demand: Fair Trade

A

requires companies to pay prices no lower than the market price - customers are willing to pay higher prices for fairtrade products.

Business Studies A-level (7 decks)

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