Flashcards
Business Studies Unit 1
Cards in this deck (73)
- 1What is a sole trader?A business that is fully owned by one person.
- 2Advantages of being a sole trader?>Full control over decision making.
>Get to keep all the profits.
>Financial privacy - 3Disadvantages of being a sole trader?>Unlimited Liabililty
>No economies of scale
>Limited capital
>Lack of continuity - 4What is a Partnership?A business that is owned by 2-20 people.
- 5Advantages of a partnership?>More effective decision making.
>Increased Capital
>Shared workload / Specialisation - 6Disadvantages of a partnership?>Unlimited Liablilty
>Shared profits
>Lack of continuity
>Conflict between partners - 7What is the document that should be made when a partnership forms?>The partnership agreement.
-It should include Name and function of the company, capital invested, profit ratio, rules of ending a partnership - 8What is a silent partner?A partner which has invested capital in the business but isn't involved in the running of the business.
- 9What is a limited company?A company which has a seperate legal identity from its owners.
- 10What is an LTDA private limited company: ie, a limited company with shares that cannot be bought by the public.
- 11What is a PLC?A private limited company: ie, a limited company which its shares can be bought by the public.
- 12Advantages of an LTD?>Continuity
>Limited Liability
>More Control
>Raising Capital is easier - 13Disadvantages of an LTD?>Shared Profit
>Lack of financial privacy
>Limit on capital
>Set up costs - 14Advantages of a PLC?>Raising capital is easy because of shareholders
>Limited Liability
>Continuity - 15Disadvantages of a PLC?>Threat of hostile takeover! :(
>Lack of control
>Set up costs
>No financial privacy - 16What are the two documents required for a Limited company?1. The "Memorandum of association."
>Basically the outside view of the company
eg. name, function, objectives
2. The "Articles of association."
>Basically the inside workings of the company
eg. How board meetings will work, how profits will be split, duties of the directors - 17What is a social enterprise?A real business who reinvests profit into the business or community rather than focusing on maximising profit for shareholders.
- 18Two examples of a social enterprise?>(Jamie Oliver's) "15"
> "Divine Chocolate" - 19Examples of Internal sources of finance?>Owners Investment
>Sell of fixed assets and stock
>Debt Collection
>Retained profits - 20Examples of External sources of finance.>Hire purchase (small payments until its paid off.)
>issue of shares
>Bank loans & overdraft
>goverment grants
>rent leasing
>trade credit (goods now pay later) - 21Who are the internal customers?>Owners
>employees - 22Who are the external customers?>Customers
>Other businesses - 23Why is value added a good thing?It is cheaper to keep existing customers than find new ones.
(Value added=customer loyalty) - 24What is the difference between an aim and an objective?An aim is a goal to achieve
An objective is a stated measurable target to achieve that aim. - 25What are the five main business aims?1. Survival
2. profit maximisation
3. growth
4. Improving corperate image
5. Concern for the enviroment. - 26Alternative goals for the public sector businesses and social enterprises?public sector= to provide a service
social enterprise= reinvest profit - 27What is a stakeholder?Someone with an interest in the business.
- 28Examples of internal stakeholdersManagers and employees
- 29examples of external stakeholderscustomers, community, compeditors, creditors, goverment, enviroment ect
- 30what are the ***TYPES*** of production. *key word*Primary (extraction of raw materials)
Secondry (construction using raw materials)
Tertiary (services) - 31what are the **FACTORS** of production?1.Land
2. Labour
3. Capital (fixed and working)
4. Enterprise - 32what are the **METHODS** of production?1. Flow production
2. Batch Production
3. Job production - 33What is Flow production?When the products are produced in a continuous process. The product is constructed on an assembly line with components added at each subsequent stage.
- 34Advantages of flow production? (also known as mass production)>Because it is capital intensive production is quicker
>Can be 24/7
>economies of scale
>producing on a large scale - 35Disadvantages of flow production?>Large initial investment
> one part off assembly line breaks down whole production process can be effected
>lower staff motivation (work is repeditive)
>products are standardised/loss of flexiblity - 36What is batch production?When a number of similar or identical products are produced in a group.
- 37Advantages of batch production?>less costs (fewer workers)
>economies of scale - 38Disadvantages of batch production?>Down time
>Storage costs
>demotivation
>no flexiblity - 39What is job production?The one off (bespoke) production of a product for one specific customer.
- 40Advantages of job production?>high worker motivation
>can charge more for their products
>flexibility
customised products - 41Disadvantages of job production?>High cost of production
>time consuming
>few oppertunities to automate the production process - 42What is CAM?Computer aided manufacturing.
The use of computer based software to assist the actual manufacture of a product. - 43What is CAD?Computer Aided Design.
The use of computer technology to assist in the design and drafting of a product. - 44What are the advantages of technology?>improved quality
>increased productivity
>Lower average costs
>Speedier development of new products - 45What are the disadvantages of technology?>Higher fixed costs
>Retraining costs
>Demotivation of workers
>Redundancies - 46What is Quality assurance?Getting the service or product "right first time" with "zero defects."
It is trying to prevent faults from happening
and every stage may be checked for quality. - 47Benefits of quality assurance?>Reduces the number of faulty products.
>Reduces costs through wastage.
>Motivational for workers who are involved in quality. - 48What are the Quality Standards1. Charter Mark
public sector, high quality for customers)
2. ISO 9001
(How well business management is)
3. EFQM
(Higher standards for european businesses)
4. Investers in people
(focuses on staff training+ motivation) - 49What is the cost of health and safety?>Increased purchasing
>Increased admin
>Increased Labour - 50What are the benefits of health and safety?>reduced staff absentee rates.
>Increased staff motivation.
>protection against negligence claims. - 51What is primary market research?Original data that the company has collected themselves for a specific purpose.
Adv- relevant & up to date
Disadv- Time consuming & expensive - 52What is secondary market research?The processing of data that has already been collected. Also known as desk research.
adv- Cheap & quick
disadv- may be irrelevant, out dated and biased. - 53Methods of Market research?>Surveys
>Focus groups
>Interviews
>Test Marketing - 54What are the two types of sampling?Random (everyone has an equal chance of being selected)
Quota (a specific number of people are chosen from a specific criteria) - 55What is a highly compeditive industry?one were a large number of relatively small firms offer similar products
- 56What is a highly concentrated industry?One that is dominated by a small number of large firms.
- 57What does level of competition depend on?>The number of firms and their relative size
>The extent of which products from each firm are similar
>How easy it is to enter or leave the industry - 58What are the indicators of level of competition?>Measures of market share and market competition
>Measuring the entry and exit from the industry
>Measuring customers switching behaviour - 59How can a company manage their competition?>Reducing price
>Improving quality
>Product differentiation
>Advertising - 60What is the marketing mix?Price
Product
Promotion
Place - 61What does price depend on?>The type of product
>Level of competition
>Cost to produce the product
>the price customers are willing to pay - 62What are the pricing strategies?>Compeditive pricing
>Cost plus pricing
>Penetration Pricing
>Predatory/destroyer pricing
>Psycological Pricing - 63What are the main stages in a product life cycle?Development
Introduction
Growth
Saturation and Maturity
Decline - 64What is the saturation point?The point of which sales are at their peak and very few new customers can be found.
- 65How can you extend the life of a product?>product modification
>repackaging
>Re-branding
>reducing price - 66What is advertising?The process of drawing attention to a product, brand or company. The purpose is to inform customers and persaude them to purchase the product.
- 67What are the methods of advertising?>TV
>Magazines and newspaper
>Internet
>Cinema
>Billboards and posters
>radio - 68What is a sales promotion?A short term incentive that is used to encourage customers to purchase a good or service.
- 69Examples of sales promotions.>sales/ price reductions/ discounts
>Loss leaders
>Competitions
>Money back/ money off coupons
>free gifts - 70What is the channel of distribution?The method used to get goods and services to a location where consumers can purchase them.
- 71What are the three main channels of distribution?1. Manufacturer to consumer
2. Manufacturer to retailer to consumer
3. manufacturer to wholesaler to retailer to consumer - 72What does your choice of distribution channel depend on?>Cost of channel
>Speed that goods reach customer
>Geographical coverage of channel
>reliablity of channel - 73What is marketing?The process involved in putting the right product, in the right place,
at the right time,
at the right price.
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- The main facts you need to know for GCSE Business studies.
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- kathrynchristie
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