2335351
Description
Flashcards by Chanel Cutelli, updated more than 1 year ago
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Created by Chanel Cutelli
about 9 years ago
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| Question | Answer |
| Growth and Decline - Establishment | Owner/s must make decisions on location, the types of products, trained staff and the most suitable legal structure for their business - generate enough money for cash flow - proximity to customers, suppliers etc. - ensure all gov. regulations are followed. |
| Growth and Decline - Growth | The business is experiencing increased sales. gain increased revenue, profit & market share. - Sales should increase and cash flow should be positive (known as accelerating growth) - New products may be introduced to satisfy different market segments - A good reputation is usually developed and owners develop a sense of pride in their goods/services. - A business can combine with another business (merger) or acquire another business (takeover) during this stage |
| Growth and Decline - Maturity | - needs to develop strategies to maintain customer loyalty & interest - ensure financial position of the firm is sufficient to cover short-term and long-term exposes - maintaining an active interest in the external environment in order to be aware of changing consumer patterns, new production methods and competitors marketing strategies |
| Growth and Decline - Post-Maturity | Renewal: need to explore options to resign/reinvigorate business Decline: sales decline and business may take drastic action to save business e.g. closing down sale of outlets. Steady State: occurs after steady planning and management has taken place. |
| Diversification | One firm buys another firm in a different industry. |
| Factors that contribute to business decline | - poor business idea - failure to satisfy customers - lack of demand for product - lack of a business plan - too much competition - poor management skills - financial difficulty |
| Voluntary Cessation | When an owner decided to cease its operations. - loss of enthusiasm and ideas - the decision to retire - a party offering to purchase the business - declining profits |
| Involuntary Cessation | Occurs when the closure of the business is forced on the owner. - the death of the owner - lack of demand for the product that is offered by the business - increased competition within the marketplace |
| Liquidation | Occurs when the assets of the business are sold in order to recover outstanding debt. The receiver takes responsibility for the sale of assets and recovery of debt. |
| A Liquidator's main functions are: | - take possession of & realise - convert into cash - the company's assets - investigate & report to creditors about the company's financial affairs. - deregister/dissolve the company A liquidator is not required to do any work unless there are enough assets to pay their costs. |
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