Business Studies Lecture Review

These flashcards cover key definitions, processes, objectives and strategic concepts across Operations, Marketing, Finance and Human Resources as presented in the lecture notes.

What are the six key operations performance objectives?

Quality, Speed, Dependability, Flexibility, Customisation, Cost

In operations, what is Cost Leadership strategy?

Outperforming competitors by offering the lowest price through an efficient cost structure.

How does Goods & Service Differentiation create competitive advantage?

By winning customer loyalty through perceived product or service uniqueness.

Define ‘technology’ as an operations influence.

The design, construction and application of innovative devices and methods to the operations process.

List two positive and two negative impacts of introducing new technology in operations.

Positives: reduces long-term costs; improves speed and quality. Negatives: high short-term cost; requires retraining and may create redundancies.

What does environmental sustainability mean for operations?

Running processes that consume resources without compromising access for future generations.

Give one positive and one negative of adopting environmentally sustainable practices.

Positive: enhances brand image. Negative: upfront cost of modifying processes.

Define Globalisation as an operations influence.

Removal of trade barriers, creating integration of national economies and access to global markets, labour and materials.

State one benefit and one drawback of globalisation for operations.

Benefit: access to cheaper raw materials and labour. Drawback: new compliance costs and need to meet diverse market expectations.

What are transformed resources?

Inputs that are changed during the transformation process (Materials, Information, Customers).

What are transforming resources?

Inputs that carry out the transformation process (Human Resources and Facilities).

Explain the purpose of ‘Monitoring’ in the transformation process.

Collecting and comparing actual performance against planned KPIs to identify inefficiencies.

What is the difference between a Gantt Chart and Critical Path Analysis?

Gantt charts sequence tasks over time; Critical Path Analysis schedules the shortest overall project duration.

Name the 4Vs that shape operations processes.

Volume, Variety, Variation in demand, Visibility

Define ‘Customer Service’ as an operations output consideration.

How well a business meets or exceeds customer expectations during interactions.

What do warranties indicate about operations performance?

High warranty claims signal defects and the need for process adjustments.

List the three quality-management approaches.

Quality Control, Quality Assurance, Quality Improvement (TQM/continuous improvement).

Give two advantages of Just-in-Time (JIT) inventory management.

Lowers holding costs; reduces waste through minimal stock levels.

Name two financial costs that create resistance to change in operations.

Purchasing new equipment and paying redundancy entitlements.

Identify the four global factors influencing operations strategy.

Global sourcing, Economies of scale, Scanning and learning, Research & Development

What is the overarching goal of Marketing?

To plan, price, promote and distribute products in ways that satisfy customer needs and achieve business objectives.

List five common marketing objectives.

Profit maximisation, Market share growth, Geographical spread, Product range expansion, Customer service/customisation.

Describe the Production, Selling and Marketing approaches.

Production: focus on mass manufacture (1820s-1920s). Selling: emphasis on persuasion amid competition (1920s-1960s). Marketing: identify and satisfy customer needs through research (1960-present).

Name the six types of markets.

Resource, Industrial, Intermediate, Consumer, Mass, Niche

State the four main factors influencing customer choice.

Psychological, Sociocultural, Economic, Government

What law regulates deceptive and misleading advertising in Australia?

Competition and Consumer Act 2010 and Australian Consumer Law (ACL).

Give one example of unethical marketing practice.

Sugging—selling under the guise of a survey.

What does a SWOT analysis provide in the marketing process?

A snapshot of internal strengths & weaknesses and external opportunities & threats.

Define market segmentation.

Dividing the total market into distinct groups with shared characteristics to target more precisely.

List the four variables used to segment consumer markets.

Demographic, Geographic, Psychographic, Behavioural

Differentiate between product branding and packaging.

Branding identifies a product via name/logo; packaging protects and promotes the product visually.

Name the three basic pricing methods.

Cost-based, Market-based, Competition-based

Describe price skimming and price penetration.

Skimming: charging highest price at launch; Penetration: charging lowest price to gain market share quickly.

What are the five elements of the promotion mix?

Advertising, Personal selling & relationship marketing, Sales promotion, Publicity, Public relations

Explain intensive, selective and exclusive distribution.

Intensive: saturate market via many outlets; Selective: moderate number of outlets; Exclusive: single outlet in large area.

Identify the three extra Ps in the extended marketing mix.

People, Processes, Physical evidence

Give two e-marketing tools.

Web pages and social-media advertising (SMA)

What is the difference between standardisation and customisation in global marketing?

Standardisation offers the same product worldwide; Customisation adapts product and mix to local markets.

State the strategic role of financial management.

To ensure the business can operate, grow and achieve goals through effective management of financial resources.

List the five main financial objectives.

Profitability, Growth, Efficiency, Liquidity, Solvency

Provide the formula for the Gross Profit Ratio.

Gross Profit ÷ Sales

What does the Current Ratio measure?

Liquidity—the ability to meet short-term obligations (Current Assets ÷ Current Liabilities).

Define gearing ratio and its ideal benchmark.

Debt ÷ Equity; ideally about 1:1 to balance risk and return.

What is retained profit?

Net profit kept in the business rather than distributed to owners; an internal source of finance.

Distinguish between a debenture and an unsecured note.

Both are long-term debt securities; a debenture is secured against assets, an unsecured note is not and thus carries higher risk/interest.

Give two advantages of leasing as a finance source.

Access to assets without large upfront payment; lease payments are tax deductible.

What regulatory body enforces the Corporations Act 2001?

Australian Securities and Investments Commission (ASIC)

How can global interest-rate differentials influence finance decisions?

Businesses may borrow in countries with lower rates to reduce cost of capital.

Name the three core financial statements.

Cash-flow statement, Income statement, Balance sheet

What are normalised earnings?

Profits adjusted to remove one-off or unusual items for more accurate year-to-year comparison.

Identify two cash-flow management strategies.

Distributing payments evenly and offering discounts for early payment.

What does working-capital management seek to balance?

Current assets and current liabilities to ensure smooth day-to-day operations.

Explain sale-and-lease-back.

Selling an owned asset to raise cash, then leasing it back to retain use while improving liquidity.

List two cost-control techniques for profitability management.

Using cost centres and minimising unnecessary expenses.

Define a forward exchange contract.

Agreement to buy/sell foreign currency at a fixed rate on a future date, protecting against exchange-rate fluctuations.

What is an option contract in currency management?

Gives the right, but not obligation, to buy/sell foreign currency at a set rate before a future date.

State the strategic role of Human Resource Management (HRM).

To acquire, develop, maintain and manage staff so the organisation meets its goals.

What is outsourcing in HR?

Using external providers to perform HR functions such as payroll or recruitment.

Give one advantage and one disadvantage of employing contractors.

Advantage: flexibility and no entitlement costs. Disadvantage: less control over work standards and potential loyalty issues.

Name six key HR stakeholders.

Employers, Employees, Employer associations, Unions, Government agencies, Society

What are the National Employment Standards (NES)?

Ten minimum entitlements (e.g., 38-hour week, leave, minimum wage) that apply to all Australian employees.

Differentiate between an award and an enterprise agreement.

Award: industry-wide minimum conditions. Enterprise agreement: negotiated, Fair Work-approved terms for a specific organisation.

Explain how economic cycles influence HR planning.

Booms raise hiring and training budgets; recessions lead to hiring freezes and cost-cutting.

Give two social trends affecting HR.

Greater workforce diversity and increased demand for work-life balance/flexible work.

How does strong corporate social responsibility (CSR) impact HR?

Enhances reputation, attracts talent and improves retention, but may increase compliance costs.

What is the purpose of financial controls?

Policies and procedures that prevent fraud, errors and asset loss to ensure financial plans are achieved.

Which payment method poses the greatest risk to exporters: clean payment or payment in advance?

Clean payment, because goods are shipped before payment is received.

How does a letter of credit reduce risk in international trade?

A bank guarantees payment to the exporter once delivery terms are met, transferring credit risk to the bank.

Define ‘economies of scale’ in an operations context.

Cost advantages gained by producing larger volumes, spreading fixed costs over more units.

What is the Better Off Overall Test (BOOT)?

Fair Work Commission assessment that an enterprise agreement leaves employees better off than under the relevant award.

Explain ‘lead times’ in operations.

The time between ordering inputs and their delivery, affecting speed and inventory levels.

What is ‘benchmarking’ in total quality management?

Comparing performance against industry best practice to set improvement targets.

Identify two advantages of holding stock.

Ability to meet sudden demand and bulk-buying discounts.

What is price discrimination under consumer law?

Charging different prices in separate markets for the same product without cost justification; restricted by the ACL.

Describe ‘relationship marketing’.

Developing long-term, cost-effective relationships with individual customers to encourage loyalty.

What is the purpose of a marketing financial forecast?

To estimate costs and anticipated revenues of each marketing strategy for decision making.

Give one advantage and one disadvantage of global standardised pricing.

Advantage: simpler, consistent brand image. Disadvantage: may ignore local income levels and cost structures.

What is the Accounts Receivable Turnover Ratio used for?

Measuring how many times per year receivables are collected, indicating efficiency and liquidity.

Explain ‘expense ratio’.

Total expenses divided by sales, showing efficiency in cost control.

What is the main purpose of cost centres?

Assign responsibility for costs to specific departments, promoting accountability and control.

Define ‘capitalising expenses’.

Recording a significant expenditure as an asset rather than an expense to spread cost over time.

Why might a business use factoring?

To quickly convert receivables into cash, improving short-term liquidity despite forfeiting some revenue.

What is the key difference between strategic, tactical and operational financial objectives?

Strategic: long-term (>2 yrs); Tactical: medium/short (<2 yrs); Operational: day-to-day goals.

Name two common physical-distribution issues in marketing ‘place’.

Transport reliability/cost and warehouse/storage management.

Define ‘product positioning’.

Crafting the image of a product in consumers’ minds relative to competitors.

What is ‘veracity’ in the 4Vs model?

(Trick question) The correct term is ‘Variety’; veracity is not one of the 4Vs.

Describe the role of change agents in overcoming resistance.

Individuals who initiate or facilitate change, communicating benefits to reduce uncertainty and inertia.

What does ‘lead-edge technology’ offer compared to ‘established technology’?

Greater innovation and competitive advantage but with higher cost and risk of obsolescence.

Give two criteria assessed in quality of service performance objectives.

Reliability and timeliness of service delivery.

Explain the ‘total product concept’.

Combination of tangible and intangible benefits that constitute the overall customer experience of a product.

What is the main goal of economies of scale in global operations?

To lower per-unit costs through increased production volume across international markets.

Define ‘bootstrapping’ in financing (not in original notes, knowledge extension).

Raising funds internally through tight cost control and reinvested profits rather than external finance.

Identify one limitation of timing issues in financial reporting.

End-of-period cut-offs can misstate revenue or expenses, distorting profitability and comparability.

What is ‘scanning and learning’ as a global operations factor?

Observing global best practices to adopt innovations and improve domestic operations.

Differentiate between explicit and implicit services.

Explicit: tangible application of time/skill; Implicit: intangible feeling of being cared for.

Why are warranties a key marketing and operations link?

They influence customer perception of quality and drive feedback for process improvement.

Define ‘niche market’.

A narrowly defined, often small, segment of a market with specific needs.

What is ‘loss leader’ pricing?

Selling a product below cost to attract customers who will buy other profitable items.

Explain the ‘Better Off Overall Test’ (BOOT) in one sentence.

It ensures an enterprise agreement leaves employees better off than the relevant award.

What is the purpose of the Advertising Standards Bureau?

To handle complaints and ensure advertising adheres to the AANA Code of Ethics.