The Dynamic Nature. The Dynamic Nature. of Business. of Business. Risk and Reward. Risk and Reward. The Role of Business. The Role of Business

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1 The Dynamic Nature of Business Name two things a dynamic business does. 1 The Dynamic Nature of Business A dynamic business adapts to: the changing needs of customers developments in the market. 1 Risk and Reward What factors can contribute to business failure? 2 Risk and Reward Business failure can be because of: entrepreneurs not knowing their market well entrepreneurs not having enough money to start a business poor decision making by entrepreneurs competition or goods/services not meeting the needs of customers. 2 The Role of Business Enterprise What is the difference between goods and services? 3 The Role of Business Enterprise A good is a physical product that can be touched, e.g. a pair of jeans. A service is non-physical, e.g. a piano lesson. 3 Customer Needs Name any three customer needs. 4 Customer Needs Customer needs include: price quality choice convenience service. 4 Market Research What is market research? 5 Market Research Market research is the process of collecting information about: what consumers want market trends competitors. 5

2 Market Segmentation How are markets segmented? 6 Market Segmentation Markets are segmented by: location demographics lifestyle income age. 6 Market Segmentation When do businesses use market mapping? 7 Market Segmentation Market mapping is used to identify where a product will be placed in a market compared to other similar products in the same market. 7 The Competitive Environment How do businesses compete with each other? 8 The Competitive Environment Businesses compete with each other using: price quality location product range customer service. 8 Business Aims and Objectives What does SMART stand for? 9 Business Aims and Objectives Specific Measurable Achievable Realistic Timely 9 Business Revenues, Costs and Profits What is break even? 10 Business Revenues, Costs and Profits Break even is the level of output where total revenues are equal to total costs; this is where neither a profit or loss is made, i.e. how many units need to be sold to cover all costs but not yet make a profit. 10

3 Cash and Cash-flow What is cash-flow? 11 Cash and Cash-flow Cash-flow is the flow of cash in and out of a business. 11 Sources of Business Finance Name two types of short-term finance. 12 Sources of Business Finance Short-term finance can be: an overdraft facility trade credit. 12 The Options for Startups and Small Businesses Define limited liability. 13 The Options for Startups and Small Businesses With limited liability: there is a legal difference between the business owner and the business if the business incurs debts, the debts belong to the business; owners only lose the money they have invested in the business. 13 Business Location What factors influence business location? 14 Business Location Business location can be influenced by: the type of business the market labour materials competitors. 14 The Marketing Mix What is the marketing mix? 15 The Marketing Mix The marketing mix is a combination of the following factors: price product promotion place. 15

4 A business plan should Business Plans Name four elements of a business plan. 16 Business Plans contain information about: the business idea; the business s aims and objectives; the target market; forecast revenue, costs and profits; cash-flow forecast; sources of finance; location; the marketing mix. 16 Business Stakeholders Who are the internal stakeholders of a business? 17 Business Stakeholders Internal stakeholders are: the owners the managers the employees. 17 Legislation and Business Technology and Business What is e-commerce? 18 Under the Consumer Rights Act, when does a consumer have the right to a refund? 19 Legislation and Business Technology and Business E-commerce is the activity of buying and selling goods and services online. The Consumer Rights Act states the right to a refund if the goods or services are not: of a satisfactory quality fit for purpose as described The Economy and Business What does GDP stand for? 20 The Economy and Business GDP stands for: Gross Domestic Product. 20

5 External Influences What is inflation and is it good for business? 21 External Influences Inflation means a rise in prices. Inflation is bad for business because it increases costs and reduces profits. 21 Business Growth Define economy of scale. 22 Business Growth Economy of scale is the cost advantage gained by expanding the level of production. 22 Changes in Business Aims and Objectives In business, what are aims and objectives? 23 Changes in Business Aims and Objectives Aims are the long-term goals of a business. Objectives are the short-term steps a business takes to realise its long-term goals. 23 Business and Globalisation What is globalisation? Business and Globalisation Globalisation is when organisations and businesses trade internationally Ethics, the Environment and Business How does a business act in an ethical way? 25 Ethics, the Environment and Business A business can be ethical by paying a fair wage to its workers and by ensuring that its production does not harm the environment, animals or people. 25

6 Product What three elements make up the design mix? Product The design mix is made up of: function aesthetics (appearance) cost Pricing strategies can be influenced by: Price Name two influences on pricing strategies. Price technology competition market segments product life cycle Promotion What is viral advertising? Promotion Viral advertising relies on consumers to promote or advertise a good or service via or social media The distribution channel Place What is the distribution channel? Place is the route that a product takes from where it is manufactured to where it is sold Using the Marketing Mix to Make Business Decisions Define competitive advantage. 30 Using the Marketing Mix to Make Business Decisions Competitive advantage is an advantage held by a business that allows it to perform better than its competitors, e.g. by using new technology, by making innovative products, or by using effective promotion. 30

7 Business Operations Name a disadvantage of batch production. 31 Business Operations Disadvantages of batch production include: workers become demotivated due to performing the same tasks over and over a delay in one batch can affect the production of another batch. 31 Working with Suppliers What do the axes on a bar gate stock graph show? 32 Working with Suppliers The x-axis on a bar gate stock graph shows time in weeks. The y-axis on a bar gate stock graph shows the unit of stock. 32 Managing Quality What is the difference between quality control and quality assurance? 33 Managing Quality With quality control, finished products are inspected to see if they meet minimum standards. Quality assurance is incorporated into the production process and is checked at every stage by workers. 33 The Sales Process What is customer engagement? 34 The Sales Process Customer engagement is concerned with the experiences of customers with a business or brand and the connection that is built through nurturing and managing this relationship. 34 Business Calculations Give an alternative name for sales revenue. 35 Business Calculations Sales revenue is also known as: income revenue turnover. 35

8 Understanding Business Performance What type of data is quantitative business data? 36 Understanding Business Performance Quantitative business data is numerical and statistical data. 36 Organisational Structures Define the two types of organisational structure. 37 Organisational Structures Organisational structure can be: hierarchial (also known as tall), which has lots of levels of authority flat, which has few levels of authority. 37 Effective Recruitment What is the difference between internal recruitment and external recruitment? 38 Effective Recruitment Internal recruitment is when a business appoints someone to a job who already works for the business. External recruitment is when a business appoints someone to a job from outside the business. 38 Effective Training and Development Name two types of training. 39 Effective Training and Development Training can include: formal training informal training self-learning observation. 39 Motivation Name three different ways to motivate staff. 40 Motivation The following methods can be used to motivate staff: financial rewards, e.g. bonuses fringe benefits, e.g. free gym membership promotion praise job enrichment job rotation autonomy. 40