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how do you answer a 9 marker?
knowledge, understanding, application, analysis, evaluation
how do you answer a scaffolding 9 marker?
parts a and b (analyse) understanding, application, impact, part c (evaluate) judgement, justification, application
how do you answer a 6 marker?
make two points, with understanding, analysis and application for each
what is a merger?
when two businesses join to make a larger business
give an advantage of merging with another business
larger market share
name a benefit of having a larger market share
able to charge higher prices as you are more well known → more profit
give a disadvantage of merging with another business
conflict of objectives within the two merged businesses
name a drawback of having a conflict of objectives
makes decisions harder to make + causes disruption in the running of the business → could possibly lose customers if the business starts going in a completely different direction
name the five pricing methods
promotional pricing, penetration pricing, skimming, cost-plus, competitor pricing
why would promotional pricing be used?
if they are trying to lengthen the products life cycle or get rid of old stock
why would penetration pricing be used?
if they are entering a new, competitive market, they could set their prices lower to gain more market share (only for short-term)
why would skimming be used?
if they are already a well-known brand, and can set their prices for a new, highly anticipated product higher as people will buy it anyway (only for short-term)
name 3 advantages of being an ltd
continuity - if the old owner dies, the business can continue operating
easier to raise money - banks see ltd’s as less of a risk than sole traders and partnerships
control over share sale - shares can only be sold through private transactions and with agreement from all existing shareholders
name 3 disadvantages of being an ltd
privacy - the financial information of an ltd can be seen by the public (and competitors
setup - these are more complicated to set up and there are lots of forms to fill out
harder to raise money - shares cannot be sold on the stock market so it is more difficult to quickly raise capital
name 2 advantages of being a plc
ability to raise large amounts of capital - they can sell shares to the general public on the stock market
easier to borrow money - banks see them as low risk
name 4 disadvantages of being a plc
possibility of takeover - no control over who buys shares, so anyone who buys over 50% of their shares can takeover the business
cost of setting up + operating - these are much more complex to run
problems with size - it can be difficult to control all areas of the business
financial information is public
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