Year 11 Business Studies Preliminary Exams

Define a Business

The organised effort of individuals to produce and sell, for a profit, products that satisfy Consumers needs and wants

Define Revenue

The money you get from selling products

What are the 7 roles of a business

Profit, Employment, Income, Choice, Innovation, Entrepreneurship and risk, Wealth and quality of life

What are the 4 types of classifications for a business

Size, Geographical Spread, Industry and Legal structure

How many employees does a small business have

1-19

What is the legal structure for Small businesses?

Either Sole trader or a Partnership

How many employees does a medium sized business have

20-199

What is the legal structure of a medium sized business

Either a Partnership or a Private Company

How many employees does a large business have

200 or more

What kind of legal structure does a large business have

public company

Define Geographical Spread

How big the area is that the business sells to

Define an Industry

A group of businesses that are involved in similar types of production

what are the 5 types of industries?

primary, secondary, tertiary, quaternary, quinary

What is the primary industry?

all production that involves natural resources

What is the secondary industry

Everything that involves taking raw materials and turning them into products

What is the Tertiary industry

Everything that involves performing services for other people

What is the Quaternary industry

Services that involve transferring and processing information

What is the quinary Industry

Services that used to be performed in the home

Which industries are a part of the Tertiary industry?

Quaternary and quinary

Who owns a public business enterprise

The government

Who owns a private business enterprise

Private individuals

Define Liability

legal responsibility

What are the two types of liability

Limited and unlimited

Define limited liability

The business is legally seperate from the owner ( the business has become a corporation through the process of incorporation)

Define unlimited liability

The business and the owner are the same legal entity (The owner is fully responsible for the debts of the business and personal items can be sold to pay back business debts - Unincorporated)

What are the 4 legal structures of Private Business Enterprise

Sole Trader, Partnership, Private Company and Public Company

What is a Sole Trader

A business that is owned and operated by one person

What is a partnership

A business that is owned and operated by 2-20 people

What is a Private Company

A business that invites 2-50 private shareholders to buy shares in their company

What is a Public Company

A business that offers shares to members of the public

Define Private Shareholder shareholders

Specific people that put money into a business in return for owning part of it

What are the 3 main factors that influence the choice of legal structure

Size, Ownership and Finance

Define Floating

Raising money through the sales of shares on the ASX

What are the financing options available to a Sole trader

Owners or a small loan

What are the financing options available to a Partnership

Owners or a small loan

What are the financing options available to a Private Company

Loans or Shares

What are the financing options available to a Public Company

Loans or Shares

Define an external influence

An influence outside of the business' control

What are the 10 external influences on a business

Economic, financial, geographic, social, legal, political, institutional, technological, competitive situation, markets

What is the acronym for the external influences

PESTFILMGC

Define an internal influence

Factors within the business that can be controlled by management

What are the 5 internal influences on a business

Product, Location, Resources, Management and Business Culture

Define Stakeholders

Anyone who is interested in the business or is affected by what they do

What are the 6 main types of Stakeholders

Shareholders, Managers, Employees, Customers, Society and the Environment

What are the 4 stages of the business life cycle

Establishment, growth, maturity and post maturity

What percentage of businesses fail within the first 3 years

Roughly 50%

Define a merger

When the owners of two seperate businesses agree to join together and form a new organisation

Define Acquisition

When one business buys another to have control and use their resources

Define Vertical Intergration

When a business expands at different but related levels in the production and selling of a product (Buying the Supplier)

Define horizontal integration

When a business expands with another business in a completely unrelated industry

What are the 3 options for a business in the post maturity stage

Renewal, Remain at a steady state or decline

What are the 4 ways a business can partake in renewal

Expand into new markets, Make new products, Merge or Acquire

Define Bankruptcy

When a Business is unable to pay its debts

Define Voluntary Cessation

When a business decides to stop production

what is Voluntary Administration

when an independant person is hired to operate the business in aim to get it out of debt

Define Involuntary Cessation

When a business is forced to stop production

Define Liquidation

When business assets are sold to pay debts

What are the 4 main reasons for Business Decline

Lack of management expertise, insufficient funds, failure to meet consumer needs and competition

Define undercapitalisation

If the business lacks sufficient money they will decline because they simply wont be able to keep going

Define a Manager

Someone who coordinates the business' limited resources in order to achieve goals

What 2 ways can business' successfully achieve business goals

Working with employees and using resources efficiently and effectively

What are the 9 skills of management

- Interpersonal

- Communication

- Strategic thinking

- Vision- Problem-solving

- Decision-making

- Flexibility and adaptability to change

- Reconciling the conflicting interests of stakeholders.

What is Interpersonal skills

Skills needed to work and communicate with other people to understand their needs

define communication skills

Effectively say what you mean and listen

What are the two forms of communication

Verbal and Non-Verbal

Define Strategic Thinking

The ability to see the broader picture

Define vision

Shared sense of direction

What do vision skills do

Give an outline of what you will be going through

Define Problem-Solving Skills

Searching for different ways to solve an issue

Define Decision-Making skills

Choosing a solution

Define Flexibility and Adaptability to change

Being able to anticipate and adjust to change

What are Business goals

A desired outcome to be achieved within a certain time period

What is the acronym for goals

SMART

What are Smart Goals

Specific, Measurable, Achievable, Realistic, Time bound

What are the 3 types of goals

Financial, social, Environmental

What are the 4 financial goals

Maximise profits, Increase Market Share, Increase Growth, Increase Share Price

What are the 2 Social Goals

Community Service, Providing Employment

What is the environmental goal

Environmental sustainability

What are the 4 ways managers can increase staff involvement

Innovation, Motivation, Mentoring, Training

What are the 4 Main Business Functions

Operations, Marketing, Finance, Human Resources

Define Interdependance

The mutual dependance that the four business functions have on each other

Define the triple bottom line

When a business has a focus on Economic, Environmental and Social performance

What are the activities involved with Operations

Goods or services, Production Process, Quality Management

What are the 3 steps of the production process

Inputs, Transformation, Output

What are the three options in making sure outputs meet customer expectation

Quality control, Quality Assurance, Quality Improvement

What is Quality control

Using inspections at different points during the production process

What is Quality Assurance

Using a system to achieve certain standards

Define Total Quality Management (Quality Improvement)

Continually focusing on improvement in all business functions

What is a JIT System

Just In Time System - Inputs are only ordered when they are needed

What is Marketing

Activities to make consumers want and buy the product

What is targeting a mass market

When a business isn't targeting any particular group of people

Define Market Segmentation

When a business divides its target market into groups based on a common characteristic

Define Demographic Segmentation

Dividing people into groups based on things such as Age, Gender or Income

Define Geographic Segmentation

Define a Niche Market

A really small market segment

Define a Target Market

A specific group of people the business chooses to aim its marketing activities towards

What are the 4 P's of the marketing mix

Product, Price, Promotion, Place (Distribution)

What are 3 methods of deciding how much to charge for a product or service

Cost-Plus Margin, Market Price, Competitors Price

Define Cost-Plus Margin

Adding up all costs to make the product plus a percentage for profit

What are the 3 channels of distribution

Producer to consumer, Producer to Retailer to Consumer, Producer to Wholesaler to Retailer to Consumer