Flashcards
unit 3 business
Cards in this deck (14)
- 1High Bargaining power of suppliers-only a few of them in the market
-suppliers can easily theatres to integrate vertically
-cost of switching is high(risk)
-resource they supply is scarce - 2Low Bargaining power of suppliers-they are in large numbers supplying the same products
-resource they supply is in abundance
-all want to supply to a monopoly to Gai. confidence - 3Bargaining power of consumers-no. of consumers
-no. of rivals selling the same good
-cost of switching
-loyalty to that business - 4Threat of substitutes-price of substitute
-cost of switching (opp.cost and risk)
-customer loyalty
-willingness to switch(elasticity if PED>1 then high) - 5Threat of new entrants barriers to entry-high start-up and investment costs
-economies of scale and low costs businesses already benefit from
-legal and regulatory restrictions - 6A trade bloc is...a group of countries which engage in international trade, united by a preferential trade agreement
- 7Advantages of trade blocs are...-free movement of goods( no tariffs cheaper costs)
- access to more labour(more skills)
-CET insulates from global pressures and competition
-as countries grow through free trade gov. must
provide infrastructural support - 8Disadvantages of trade blocs are...- to be a single market laws come with it such as min wage
-may reduce enterprise and dynamic efficiency as easily accessible neighbouring markets
-those with monopoly power competed away by increased competition - 9GEARING RATIOlong-term liabilities divided by capital employed times 100
(25%-50%) - 10CURRENT RATIOcurrent assets divided by current liabilities
(1.5-2) - 11ACID TEST RATIOcurrent assets-stock divided by current liabilities
(>1) - 12ROCEoperating profit divided by capital employed times 100
(>>>> the better) - 13GPMgross profit divided by total rev times 100
- 14NPMnet profit divided by total rev times 100
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- financial equations trade blocs porters 5 forces
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- emily harris
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