OCR GCSE Business

what are the three purposes of business enterprise and entrepreneurship

Spotting an opportunity, developing an idea, satisfying customer needs

define entrepreneur

A person who takes the risk of starting and running a business enterprise

define spotting an opportunity

the ability to see the need for a particular product or service customers needs

characteristics of an entrepreneur

creativity, risk-taking, determination, confidence

financial risks of being an entrepreneur

losing savings and other assets to pay off debts

finanacial rewards of being an entrepreneur

potential to make a lot of money

non-financial risks of being an entrepreneur

mental illness and bad on health

non-financial rewards of being an entrepreneur

independence, self-satisfaction, making a difference

a business must plan its activities to:

reduce the risk of failure, maximise success

define aims and objectives

statements of what the business is trying to achieve, such as grow larger or make a profit

define business plan

a simple plan which set our details of the product and how it will be financed, marketed and details of market research findings

define finance

the money used to fund a business

what does ‘SMART’ stand for in a business plan

Specify, Measurable, Achievable, Realistic, Timely

4 main parts to a business plan

identifying the market, identifying the resources, identify finance needed, achieve business aims and objectives

define sole trader with advantages and disadvantages

a business owned by one person

A- all profits kept, all control, easy to set up

D-unlimited liability, struggle to get finance, heavy workload

define partnership with advantages and disadvantages

a business owned by between 2 and 20 partners

A-shared resources, easy setup, collective decision-making

D-unlimited liability, shared profits, less control

define a private limited company(ltd) with advantages and disadvantages

usually a smaller business, can sell shares to invited people only

A-limited liability, easier access to funding, shareholders can restrict who buys shares

D-higher set up costs, public information, longer to set up

define public limited company(plc) with advantages and disadvantages

can sell shares to anyone who wants to buy a share of the business

A-easy to access large capital, limited liability, business continuity

D-high setup costs, loss of control, information exposed to public

define limited liability

the owners of a business can only lose the money they have invested in a business if it fails

define unlimited liability

the owner of a business is responsible for repaying the debts of a businessdefine

examples of business objectives

survival, profit, growth, providing a service

define stakeholder

groups or individuals who have an interest in a business

examples of internal and external stakeholders

internal- owners, employees

external- customers, suppliers, government, local community

benefits of business activity

profits, jobs and incomes, goods and services, sales, taxes and prosperity

problems caused by business activity

financial losses, redundancy, poor goods and services, late or missed payments etc.

define organic growth

when a business expands using its own internal resources, like reinvesting profits, rather than buying other companies

define backwards vertical growth

when a business merges with, or takes over a, a business that supplies it with goods or services

define diversification

when a business merges with or takes over another business with which it has no connection

define external growth

the growth of a business by takeover or merger

define forwards vertical growth

when a business merges with or takes over a business that it supplies goods or services to

define horizontal growth

a merger or takeover where the two businesses are involved in a similar operation

define merger

where two or more businesses agree to join to become one business

define takeover

where a business takes a controlling interest in another business

3 main purposes of marketing

1.identifying and understanding customers

2.informing customers

3.Increasing sales

define marketing

finding out the needs of consumers and demonstrating how a business fulfils those needs so that its sales increase

define market research

the collection of data on customer habits to help decision-making in marketing.

define target market

a group of customers to whom a business aims to sell its products

name different primary research methods

questionnaire, interview, trialling, focus groups

name different secondary research methods

census data, newspapers/magazines, websites, internal data

difference between qualitative and quantitative data

qualitative: data based on the opinions of those being asked

quantitative: data collected based on facts

5 ways to segment the market

age

gender

location

lifestyle

income

what are the 4 p’s

product

price

promotion

place

what are the stages of the product life cycle

introduction, growth, maturity, decline

different pricing methods

skimming, cost-plus, promotional, competitor, penetration

what are some examples of point of sale promotions

price reductions/sales, competitions, loss leaders, free samples

examples of advertising

social media, websites, television, print media, radio

what is physical distribution

the distribution of a good or service using a physical presence such as a shop or office

what is digital distribution

the distribution of goods and services digitally by downloading from a website

what is the marketing mix

the mix of different parts of the marketing campaign

define market data

information that can help marketing decisions

define market share

the percentage of total sales of a product that a business has made

what is an organisational structure

how people and departments are arranged within a business

advantages and disadvantages of tall structure

A-clear lines of communication, manages are responsible for less people, opportunities to gain promotions

D-subordinates feel too controlled by manager lowering motivation, workers may only talk to immediate colleagues.

advantages and disadvantages of flat structure

A-managers delegate responsibilities to workers for good motivation, workers communicate with more colleagues

D-not always clear lines of communication, managers have large number of workers to oversee, few promotion opportunities reducing motivation

what is an organisation chart

a diagram that shows how workers in a business are organised and who is in charge of who

define authority

the power that one person has to make decisions and to give instructions to those workers they are in charge of.

define delegation

A process where a manager gives a subordinate responsibility to make certain decisions

define subordinates

workers that a line manager is responsible for

define chain of command

the link in authority from those at the top to those at the bottom

define span of control

the number of subordinates that a manager has authority over

what is full-time working and what are advantages and disadvantages to the business

when a person works 35 hours or more per week

A-worker is permanently available for the business

D-business may have to pay worker when no work needs to be done

what is part-time working and what are advantages and disadvantages to the business

when a person works fewer than 35 hours per week

A-the worker can be asked to work at specific times needed

D-the business may have to train more workers than if it employed only full time workers

what is flexible working and what are advantages and disadvantages to the business

the practice of people working partly at their place of work and partly elsewhere

A-business may benefit from motivated workers who like flexibility

D-worker may not be available to work when needed by business

what is temporary working and what are advantages and disadvantages to the business

when a person only works for a short period of time for an employer

A-the business only needs to employ workers for the length of time needed

D-business may find it difficult to recruit enough workers at times needed

what is working from home and what are advantages and disadvantages to the business

when a person completes work for a business at home

A- business may save costs by not having to provide office space

D-slow communication from home to the office

what is working while mobile and what are advantages and disadvantages to the business

when a person completes work while on the move travelling or holiday

A-business benefits from increased productivity

D-business may not be able to monitor levels of work

what is self employment and what are advantages and disadvantages to the business

when people work in their own business

A-businesses use self employed contractors to do work for them

D-self employed may not work in the way that business’ employees are trained

advantages and disadvantages of full-time working to the worker

A-worker is paid for a full working week

D-worker is tied to working a full working week throughout the year

advantages and disadvantages of part-time working to the worker

A-the worker can work when t suits them

D-worker will only get paid for the hours they work

advantages and disadvantages of flexible working to the worker

A-worker can work at times that suits them

D-worker may not be offered as much work as they want

advantages and disadvantages of temporary working to the worker

A-the worker can work and earn for a period and have time to do other things they want

D-the worker may find there are times of year no work is needed

advantages and disadvantages of working from home to the worker

A-worker saves time and money from travel

D-distractions at home such as noisy children etc

advantages and disadvantages of working while mobile to the worker

A-worker can make full use of time even when travelling

D-worker may feel under pressure to work a lot on holiday

advantages and disadvantages of self employment to the worker

A-worker may like being in control increasing motivation

D-less job security for the worker as there may be times when there is no work so no income

advantages and disadvantages of communicating by phone

A-good for discussion of ideas, quick for communication

D-no record of discussion, difficult with long waiting times

advantages and disadvantages of communicating by meeting

A-good way to exchange ideas, minutes provide record of meeting

D-expensive, formal meetings take time to arrange

advantages and disadvantages of communicating by presentation

A-speaker has time to prepare in advance, able to ask questions

D-lots of listeners so not everyone may understand, time-consuming to understand

advantages and disadvantages of communicating by letter

A-provides record of communication, sender can take time to make sure ideas are certain

D-takes time for letters to send, if meaning of letter is unclear, difficult for receiver to check

advantages and disadvantages of communicating by email

A-fast method of communication, good for short messages

D-some may not regularly check emails, bulk emails ignored

advantages and disadvantages of communicating by text

A-very fast method of communication, receiver can save text

D-only limited info can be given, not good for discussing ideas

advantages and disadvantages of communicating by social media

A-messages can be sent to selected groups, pictures can be added

D-one person has to manage this communication, not easy to judge the success of message

advantages and disadvantages of communicating by website

A-saves money as info isn’t printed, customers can order online

D-customers can’t ask questions easily, customers can view goods

why do businesses recruit

-to start up a business

-when a business grows

-to fill a skills gap

-to replace employees that leave

examples of external methods of recruitment

websites, newspapers, social media and specialist magazines

examples of internal methods of recruitment

notice boards, word of mouth, company website and emails

what is a job description

a list of the main duties, tasks and responsibilities of a worker

what is a person specification

a list of the qualities, qualifications and knowledge that a person should have to do a particular job

advantages of internal recruitment

cheaper to advertise internationally, quicker than external, worker already knows manager, worker knows the business, motivate workers if colleagues get promoted

advantages of external recruitment

fills skills gap, beings new ideas, avoids unhappy workers, good for when a business needs workers when growing

methods of selection

letter of application, CV, interview, group activities, reference, tests, application form

financial methods of motivation

bonus, fringe benefits, motivation, pay, profit-sharing

non-financial methods of motivation

praise, award scheme, working environment

benefits of motivated workers

high worker productivity, reduced levels of worker supervision, low worker absenteeism, improved quality

advantages and disadvantages of on-the-job training

A-specific to individual and business, saves on the cost of travel, worker produces as they train, business can teach exactly how they want done

D-may not be good quality for the business, trainer may be bad at training, trainee only knows how to work the business wants them to

types of off-the-job training

lectures, demonstrations, team building activities, reading and reflecting, role play/ simulation

advantages and disadvantages of off-the-job training