business notes

What is added value in a business context?

The difference between the selling price of a product and the cost of raw materials used to make it.

How can a business increase added value?

By offering extra features to a product that customers are willing to pay more for.

What are some ways a business can create added value?

Creating a brand, advertising, providing customized services, offering convenience, and adding additional features.

Why do consumers prefer strong brands?

Consumers are willing to pay more for products with a strong brand image, as it often represents quality and status.

How do advertisements create added value?

By fostering strong brand loyalty and relationships with customers, allowing businesses to charge more for goods and services.

What is the importance of providing customized services?

Consumers are willing to pay more for personalized services, thus increasing the value of the business offering.

How do additional features on products affect pricing?

Products with more features often command a higher price in the market.

What role does convenience play in consumer purchasing?

Consumers may pay a premium for products or services that are conveniently accessible.

What is the benefit of added value for a business?

The ability to charge higher prices leads to increased profitability over time.

How can added value help a business differentiate itself from competitors?

By enhancing quality and uniqueness, a business can stand out and attract more customers.

What is the internal environment of a business?

All operational elements that are controllable within the organization, including structure, leadership, and resources.

What does the external environment of a business consist of?

Factors that are dynamic and often uncontrollable, such as market trends, economy, and regulations.

What are the key elements that influence the internal environment?

Organizational structure, management style, resources, vision, mission, and culture.

What are the challenges of the external environment for businesses?

Constant changes that are difficult to control and require adaptive strategies.

What are the four elements that a business needs to succeed?

Skilled labor, sufficient land, adequate capital, and a solid customer base.

What is a significant reason businesses fail?

Poor planning and unclear objectives leading to a lack of direction.

What is a major factor in business management failure?

Insufficient experience or expertise in finance, production, or staffing.

How can location affect business success?

A poor location can significantly hinder a business's ability to survive and thrive.

What are common issues related to stock management?

Excess cash tied up in stock, additional costs of storage, and risks of stock damage.

What role do entrepreneurs play in business?

They identify opportunities, create value, organize resources, and take risks for success.

What is the difference between an entrepreneur and an intrapreneur?

An entrepreneur creates new businesses while an intrapreneur innovates within an existing organization.

What are the barriers faced by intrapreneurs?

Limited access to finance, lack of customer awareness, and competition from established businesses.

How do entrepreneurs manage risk?

By making informed decisions and possibly minimizing exposure through partnerships or limited company structures.

What is corporate social responsibility (CSR)?

A business model that helps businesses be socially accountable to themselves, their stakeholders, and the public.

How do small businesses contribute to economic development?

By providing employment, paying taxes, and enhancing local economic growth.

What characterizes social enterprises?

Businesses primarily focused on social objectives that reinvest profits for societal benefits.

What is the primary aim of social enterprises?

To solve social problems and provide services that benefit the community.

How do families influence the dynamics of family-owned businesses?

They create strong commitment and accountability, but can also lead to conflict and unstructured governance.

What are some advantages of private limited companies?

Limited liability for owners, ability to raise capital through shares, and perpetual succession.

What is the primary focus of public sector organizations?

To provide essential services while being accountable to the government and the public.

In what form do corporations typically operate?

As separate legal entities with limited liability for their shareholders.

What are joint ventures and their advantages?

Agreements between businesses to work together on projects, sharing risks and resources.

What are strategic alliances?

Cooperative agreements between businesses to share resources for common goals.

What challenges do public sector organizations face?

Bureaucracy, inefficiency, and potential lack of competition.

How do managers and leaders differ?

Managers focus on maintaining and optimizing operations, while leaders inspire and motivate teams.

What is the significance of setting SMART objectives?

It ensures objectives are Specific, Measurable, Achievable, Relevant, and Time-bound.

What is the biological term used to describe a business's operational efficiency?

Productivity, which measures the effectiveness of inputs used to produce outputs.

What factors can influence a business's size?

Market demand, number of employees, and capital investments.

How is market segmentation beneficial to businesses?

It allows businesses to target specific consumer needs, enhancing marketing effectiveness.

What are the key factors affecting customer demand for products?

Income levels, consumer preferences, competition, and marketing efforts.

What is the purpose of market research?

To gather information about consumers' needs, preferences, and behaviors.

What are the three core components of the marketing mix?

Product, Price, Promotion.

What does dynamic pricing refer to in marketing?

Adjusting product prices based on market demands, competition, and other factors.

What does Just In Time (JIT) inventory management entail?

Minimizing inventory levels and ordering supplies only as needed to reduce waste.

What is the key to successful operations management?

Balancing efficiency, flexibility, and high-quality output.

What are the main reasons businesses require financing?

Start-up capital, operational funding, and sustainability for growth initiatives.

What makes understanding cash flow crucial for businesses?

It helps manage day-to-day operations, ensuring the business can meet its liabilities.

How can businesses improve cash flow?

By increasing cash inflows, improving credit control, or reducing overhead costs.

Why is financial forecasting important in business planning?

It helps anticipate financial needs and make informed operational decisions.

How does effective stock management optimize a business's operations?

By maintaining appropriate stock levels to meet demand without incurring unnecessary costs.

What challenges do entrepreneurs face when starting businesses?

Financial constraints, market competition, and customer acquisition.

What are some motivational strategies employed by businesses?

Offering financial rewards, recognition programs, and career advancement opportunities.

What is a key characteristic of effective leadership?

The ability to inspire and engage team members towards common objectives.

What is the role of performance appraisals in employee management?

To evaluate employee contributions and provide feedback on performance for improvement.

In what ways can technology impact business operations?

By increasing efficiency, enabling communication, and enhancing product quality.