Business theme 1

    Master this deck with 81 terms through effective study methods.

    Generated from text input

    Created by @danielisthebest

    What is meant by a 3-mark 'impact' question structure?

    Includes a point, two linked strands of analysis, and a key term.

    What is the purpose of linked strands in a 3-mark answer?

    They logically develop the impact and show cause and effect.

    What is a 3-mark 'process' question asking you to do?

    Explain how or why something happens using a logical chain.

    Give one benefit of using connectives like 'therefore' in exam answers.

    They improve marks by building a logical chain of analysis.

    What is required in a 9-mark business question?

    Analysis of one option with arguments for and against plus a justified conclusion.

    Why is context important in Section B exam questions?

    It shows application to the case study and increases marks.

    Define customer needs.

    Factors that drive a customer to purchase a product.

    Give an example of how a business meets customer needs through price.

    Setting a price that covers costs while being acceptable to customers.

    Explain how meeting customer needs can increase sales.

    Satisfied customers are likely to recommend the product, boosting demand.

    Define market.

    A place for buyers and sellers to exchange goods and services.

    Define market research.

    Gathering information to aid business decisions regarding customers and the market.

    Explain how market research reduces risk.

    It confirms demand before product launch, minimizing failure chances.

    What is qualitative data?

    Data based on opinions and attitudes.

    What is quantitative data?

    Numerical data suitable for statistical analysis.

    Give one limitation of biased research.

    It results in poor decision-making due to inaccurate data.

    Define reliability in market research.

    Using a representative sample for accurate results.

    Define validity in market research.

    Employing appropriate methods to gather relevant data.

    What is market segmentation?

    Dividing a market into groups with similar characteristics.

    Explain one benefit of market segmentation.

    Targets specific needs, enhancing customer satisfaction and sales.

    Explain one drawback of market segmentation.

    It can be costly to cater to multiple market segments.

    What is a market map?

    A diagram showing product positions based on two variables.

    Explain one limitation of market mapping.

    It compares only two variables and may rely on opinion.

    Define competition.

    Businesses vying to supply goods/services to the same customers.

    Explain how competition affects pricing.

    Businesses may lower prices to stay competitive.

    Define an aim.

    A long-term goal of a business.

    Define an objective.

    A short-term measurable target.

    Why might a new business focus on survival?

    To cover costs and remain operational in early stages.

    Define fixed costs.

    Costs that remain unchanged regardless of output.

    Define variable costs.

    Costs that fluctuate directly with output levels.

    Define revenue.

    Money received from sales.

    Define profit.

    Revenue minus total costs.

    Explain how increasing price affects profit.

    It raises revenue per unit, potentially increasing profit if demand holds.

    What is break-even?

    The output level where total revenue equals total costs.

    Explain why a low break-even point is beneficial.

    It allows the business to start making profit sooner.

    Define margin of safety.

    The difference between actual sales and break-even sales.

    Why is a high margin of safety important?

    It lowers the risk of incurring a loss.

    Define cash flow.

    The movement of money into and out of a business.

    Define net cash flow.

    Total inflows minus total outflows.

    What is a cash flow forecast?

    An estimate of future cash inflows and outflows.

    Explain one use of a cash flow forecast.

    Identifies potential cash shortages.

    Give one cause of cash flow problems.

    Falling sales due to competition.

    What is negative cash flow?

    When outflows exceed inflows, causing a cash shortage.

    Explain one impact of negative cash flow.

    The business may struggle to pay suppliers.

    What is positive cash flow?

    When inflows exceed outflows.

    Define entrepreneur.

    A person who starts a business and takes financial risks.

    What is a franchise?

    A business operating under another firm's brand and model.

    Give one advantage of a franchise.

    An established brand reduces risk.

    Give one disadvantage of a franchise.

    Lack of independence and profit sharing.

    Define limited liability.

    Owners are liable only up to their investment amount.

    Define unlimited liability.

    Owners are personally responsible for all business debts.

    Explain one advantage of a sole trader.

    The owner retains all profits.

    Explain one disadvantage of a sole trader.

    Unlimited liability increases financial risk.

    Define partnership.

    A business owned by 2 to 20 individuals.

    Give one benefit of partnerships.

    Risk and expertise are shared among partners.

    Define LTD.

    A private limited company with non-publicly sold shares.

    Explain one advantage of LTD.

    Limited liability protects personal assets of owners.

    Explain why location near competitors may be beneficial.

    It allows monitoring of rivals and attracts shared customers.

    What is footfall?

    The number of people passing a specific location.

    Explain why high footfall is important.

    It increases potential customer numbers and sales.

    Define e-commerce.

    Buying and selling goods over the internet.

    Give one advantage of e-commerce.

    Lower operating costs due to no physical store.

    Give one disadvantage of e-commerce.

    Lack of personal interaction with customers.

    What are the 4Ps?

    Product, Price, Place, Promotion.

    Explain the purpose of the marketing mix.

    To meet customer needs and drive sales.

    Define product.

    The good or service offered for sale.

    Define promotion.

    Activities to inform and persuade customers.

    Define place.

    The location where the product is sold.

    Define price.

    The amount customers pay for a product.

    What is a business plan?

    A document detailing how a business will operate.

    Explain one purpose of a business plan.

    It helps secure financing from lenders.

    What is a SMART objective?

    An objective that is Specific, Measurable, Achievable, Relevant, and Time-bound.

    Explain how technology affects price.

    It increases competition, often leading to lower prices.

    Explain how technology affects promotion.

    Enables cheaper digital marketing methods like social media.

    Name two stakeholders.

    Customers and employees.

    Explain how employees influence a business.

    Their motivation impacts productivity and customer satisfaction.

    Explain one conflict between stakeholders.

    Customers desire low prices while owners seek high profits.

    Define legislation.

    Laws that businesses must comply with.

    Give one purpose of consumer law.

    To ensure products are safe and accurately described.

    Explain one consequence of not following legislation.

    Businesses may incur fines or face closure.

    Explain how economic changes affect businesses.

    A recession can reduce demand, necessitating price cuts.

    Explain how interest rate rises affect businesses.

    They increase borrowing costs, discouraging investment.