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a level business > UNIT 9 > Flashcards

UNIT 9 Flashcards

1
Q

calc for percentage change

A

change in values/ original value X100

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2
Q

what are the two categories of growth

A

organic and external

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3
Q

whats the difference between organic and external growth

A

organic is steady, gradual, low risk growth eg: market penetration
external is sudden and significant growth eg: mergers/ takeovers

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4
Q

whats synergies

A

the interaction of two organisations/ agents to produce a combined effect greater than separate

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5
Q

name and describe the 4 types of EoS

A

purchasing- specialist buyers
technological- specialist capital and labour
managerial- attracts most efficient managers
financial

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6
Q

whats overtrading and what can it do to a business

A

overtrading occurs when a business grows too much, this may lead to
communication issues
loosing control

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7
Q

4 reasons business’ grow

A

inc market share
inc brand recognition
inc market power over customers and suppliers
inc profitability

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8
Q

define retrenchment

A

reduction in costs or spending in response to economic struggle eg: redundancies

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9
Q

3 reasons why business’ retrench

A
  1. they may be out of touch with customers, therefore they need to be innovative
  2. failed merger meaning they need to reduce costs to get back on track
  3. changing markets and customer needs eg: shopping online, free parking
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10
Q

name 3 issues w growth

A

diseconomies of scale
overtrading
Eos impacts cost of production etc

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11
Q

define economies of scope and an adv of this

A

a proportionate saving gained by producing two or more goods when the cost to make is less than producing seperately
reduces costs, inc output

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12
Q

name 2 types of internal diseconomies of scale

A

reduction in productivity
- dec output
- inc unit costs
lack of co ordination
- new staff must be controlled

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13
Q

4 advantages of synergies

A

inc revenue
combined talent
combines technology
dec in costs

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14
Q

how does growth affect HR department?

A

decisions to be made on organisational structure, therefore which staff will stay and which roles duplicated etc

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15
Q

how does growth affect finance department

A

more capital to invest, must live up to shareholders expectations though to increase profits

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16
Q

how does growth affect operations

A

more money available for supplies
outsourcing becomes an option
potential overtrade?
improvement in capital utilsation

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17
Q

how does growth affect marketing

A

marketing mix is used to achieve objectives of new larger company

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18
Q

impact of retrenchment on human resources

A

decisions will have to be made to make staff redundant to cut costs

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19
Q

impact of retrenchment on finance

A

focus on business costs and how to reduce them during period of retrenchment

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20
Q

impact of retrenchment on operations

A

resources will have to be used more carefully to reduce costs
some fixed assets may have to be sold

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21
Q

impact of retrenchment on marketing

A

marketing budget may be cut to reduce costs which may have an impact on sales

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22
Q

types of external growth

A

mergers, takeovers, joint venture

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23
Q

merger

A

two business’ join together

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24
Q

takeover

A

one business acquires another and takes their assets too

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25
Q

joint venture

A

two business’ come together to work together on product/ service
remain separate but share expertise

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26
Q

name 4 types of mergers

A

horizontal, forwards vertical, backwards vertical, conglomerate

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27
Q

horizontal merger+ adv and dis

A

a merger in the same supply chain
- share expertise, gain Eos and synergies
- leadership clash, less flexibility

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28
Q

fowards verticle

A

taking over a customer eg: retailer
- producer can determine how producers and prompted and build relationships w consumers

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29
Q

backwards verticle

A

taking over supplier
- allows business to acquire materials for cost price

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30
Q

conglomerate

A

taking over business in new market
- spreads risk

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31
Q

5 pros of external growth

A

profitability
economies of scale
shared expertise
instant growth
increase market share

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32
Q

5 disadvantages of ext growth

A
  • may be communication loss
  • damages business if cant cope
  • risk of retrenchment
  • inc regulation
  • may be resistant to change
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33
Q

whats a franchise

A

a franchise is where a business allows another to trade under its name, in return for payment

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34
Q

whats a franchisor

A

gives franchisers the right to sell its product and service

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35
Q

whats a franchisee

A

the business that agrees to provide branded product under agreement

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36
Q

benefit of opening franchise

A

already established
support for training and equipment
access to goods
marketing established

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37
Q

disadvantage of opening franchise

A

initial investment is costly
decision making
royalty payments
lack of control

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38
Q

benefit for franchisor

A

regular income
have control
growth of business

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39
Q

disadvantage for franchisor

A

must provide training and equipment
cant control all time
risk of ruined brand image

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40
Q

innovation is sometimes a result of pressure, what pressure?

A

PESTLE
P- legislation ie carbon emissions
E- efficiency and low cost
S- trends
T- up to date
E- competitive adv, match innovation

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41
Q

what does innovation potentially lead to?

A

market leader

42
Q

what are the 4 ways to become innovative

A

kaizen- continuous improvement
R+D- investing to observe trends
Intraprenurship- autonomy to work on own
Benchmarking- compare to companies

43
Q

whats a weakness of the 4 ways to become innovative

A

it doesnt guarantee success, therefore risk of wasting resources

44
Q

impact of innovation on each department ( marketing )

A

marketing- identify needs which drive innovation

45
Q

impact of innovation on each department ( financial )

A

needs to retain profits to finance innovation

46
Q

how innovation affects each dep ( operations )

A

operations
implement new operations to improve efficiency

47
Q

impact of innovation on dep ( HR )

A

HR
job design must be creative, and include innovative ideas

48
Q

whats disruptive innovation

A

making expensive products cheap eg: music downloads affect HMV

49
Q

strengths of innovation for a business

A

increased creative ideas
act as self actualisation as employees can be creative
awards

50
Q

what are the 3 types of innovation

A

completely new product
improvement of existing product
new feature of existing

51
Q

whats IoT

A

rapidly growing technology that connects physical devices to internet

52
Q

3 types of process innovation

A

improvement in tools
changes in equipment used in manufacturing
update in software

53
Q

whats the intellectual property

A

a way to protect an idea

54
Q

whats a patent

A

grants exclusive rights to make, use an invention for 20 years
requires detailed registration
costly ( up to £310 )

55
Q

whats the process of patent

A
  1. patent attorney reccomended
  2. prepare detailed documents
  3. file
  4. substantive examination ( takes years )
56
Q

whats copyright

A

protects creative rights
automatically granted and lasts a lifetime + 70 years

57
Q

whats a trademark

A

protects brands logos and ensures customers recognition

58
Q

name 3 other types of protecting innovation

A

contracts and agreements, monitoring and enforcement
licensing agreements

59
Q

define globalisation

A

the process of becoming interconnected as a result of massively increased trade and cultural exchange

60
Q

name 6 reaona for globalisation

A

reduced cost of transport
reduced cost of communication
political change
dec of trade barriers
inc significance of global companies
migration
structural change

61
Q

why has the reduction of international trade barriers increased globalisation

A

to get closer to free trade and to promote economic growth

62
Q

political change

A

meetings are now international, discussing open trade

63
Q

inc of significance of global companies

A

amount of deliveries reduced by containerisation ( opened 1970 ) which gains companies EOS

64
Q

communication

A

ONLINE COMMUNICATION

65
Q

migration

A

labour increases, improved economy as well as bringing culturally unique skills

66
Q

name the 4 reasons for targetting, operating, trading with international countries

A

exporting, licensing, alliances and foreign direct investment

67
Q

whats exporting

A

sending products abroard
if a business has saturated their market, they may find alternatives abroard

68
Q

2 advantages of exporting

A

increased eos as unit price will dec by selling more of the same product

increased market share

69
Q

two weakness’ of exporting

A
  • transport costs high
  • cultural differences
70
Q

whats licensing

A

business can get foreign firms to produce their products under licence
the licence is where a business grants the right for another to use international goods under their name

71
Q

3 advantages of licensing

A
  • revenue generation
  • royalties
  • shared risk and market expansion
72
Q

3 disadvantages of licensing

A
  • loss of control
  • dependancy on licensee
  • risk of intellectual property theft
73
Q

whats an alliance

A

a union between business formed for mutual benefit, allowing each-other to benefit from other markets

74
Q

3 advantages of alliances

A
  • synergies
  • cheap advertising
  • shared customers
75
Q

3 weakness’ of alliances

A

shared profit
could become competitor
clash, leading to negative PR

76
Q

whats foreign direct investment

A

business outside of marketing trade blocs invest in a business inside trade bloc to avoid tarrifs

77
Q

3 advantages of foreign direct investment

A

GDP growth in country
income in country
skills in country

78
Q

2 weakness’ of foreign direct investment

A

risk of political changes
higher costs

79
Q

name 3 things that influence attractiveness of international market

A

larger populations
increased middle class
low competition

80
Q

define offshoring

A

when a business relocates some of its processes to another country to reduce costs eg: manufacturing

81
Q

advantages of offshoring

A

lower minimum wage
trade blocs
staff expertise

82
Q

whats reshoring

A

bringing those processes back, less labour intensive and more capital. this is due to an adv in technology and benefits get erroded

83
Q

name 5 influences of buying and selling abroard

A
  • cultural differences
  • colours unacceptable eg: black in japan
  • war and income of locals
  • access to resources
84
Q

whats local responsiveness

A

the extent to which a company customises product to suit other countries cost reduction
eg: standardisation and economies of scale

85
Q

whats digital technology

A

digital devices and systems that help create and manage data

86
Q

name 4 pressures to adopt digital technology

A

automation
e- commerce
big data
data mining

87
Q

whats e- commerce

A

buying, selling online. this helps small business’ compete

88
Q

two adv of e-commerce

A

start up costs low
prices are transparent and comparable

89
Q

two weakness of e- commerce

A

delivery costs
not suitable for all ie: trainers try on

90
Q

whats big data

A

large sets of data that can be analysed using data mining to find patterns and trends

91
Q

whats data mining

A

finds patterns within big data to then use in decision making process

92
Q

two adv of data mining

A

helps understand customers needs
accurately forecasts sales

93
Q

two weakness of data mining

A

costly
correlation doesnt always mean LT

94
Q

whats a real life example of data mining

A

Dunnhumby
analysed customer data and finds needs

95
Q

name 5 things digital technology has helped business’ with

A
  • dec time to market product
  • inc productivity of employees
  • acquire new tech skills quickly
  • improve data handling
  • gain competitive advantage
96
Q

how does digital technology affect HRM

A
  • employee monitoring
  • performance reviews
  • better communication for recruitment
97
Q

how does digital technology affect finance

A
  • advanced analytics for finance to speed up decision making
  • data visualisation tools to improve communication
98
Q

how does digital technology affect production

A
  • high levels of productivity to improve profits
  • replaces hazardous jobs
99
Q

how does digital technology affect marketing

A

marketing campaigns can now become more personal to increase sales eg: facebook

100
Q

features of diseconomies of scale

A

slow communication, unmotivated workers and difficulty controlling and co ordinating

a level business (9 decks)

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