AS/A Level Business Revision: Opportunities and Functions

Comprehensive practice flashcards covering business opportunities, marketing, human resources, operations, and finance functions based on the WJEC and Eduqas Component 1 revision guide.

How are Small and Medium Enterprises (SMEs) defined in terms of employees and turnover?

SMEs employ fewer than $250$ persons and have an annual turnover not exceeding $50\text{ million euros}$.

What are the common characteristics of an entrepreneur?

Being a risk-taker, self-determination, self-confidence, good judgement, creative, can use their initiative, and being a self-starter.

What is the difference between the Primary and Secondary sectors of business?

The Primary sector extracts raw materials (e.g., farming, oil, mining), while the Secondary sector turns raw materials into finished goods in a factory setting.

According to the transcript, how vital are SMEs to the UK economy?

$99\%$ of all UK businesses are SMEs, and they employ over $60\%$ of all private sector employment.

What components should a Business Plan include?

Executive summary, business overview, market research and marketing strategies, management structure, financial forecasts (break-even, budget, cash flow, profit expectations), and start-up finance requirements.

What is the formula for calculating Market Growth?

$$\frac{\text{Change}}{\text{Original}} \times 100$$

What is the formula for calculating Market Share?

$$\frac{\text{Company Sales}}{\text{Total Market Sales}} \times 100$$

How does a Monopoly differ from an Oligopoly?

A Monopoly is one firm (or a firm with more than $25\%$ market share) with very high barriers to entry; an Oligopoly is a market dominated by a few big firms where non-price competition is common.

What rights are provided to customers under the Consumer Rights Act 2015?

Customers are allowed to return faulty goods for a full refund, or if they are not happy with the goods or services if they do not meet a level of quality to their satisfaction.

What determines Price and Quantity in a market?

Demand (what consumers want and can pay for) and Supply (the amount businesses are happy to sell at given prices).

What is the formula for Price Elasticity of Demand (PED)?

$$PED = \frac{\%\text{ change in Demand}}{\%\text{ change in Price}}$$

What does a negative figure in Income Elasticity of Demand (YED) indicate?

The product is an inferior good, meaning as income rises, less is spent on it.

What is the difference between Quantitative and Qualitative market research?

Quantitative research results can be analysed numerically (e.g., ticking boxes), while Qualitative research gathers in-depth opinions and explains 'why' a respondent has that view.

What is the primary risk of being a Sole Trader or in a Partnership?

Unlimited liability, meaning owners may have personal possessions taken to pay for business debt if the business goes bankrupt.

What are the characteristics of a Private Limited Company (Ltd)?

Shares are sold to family or friends but not on the stock market; it provides limited liability and protects the company name through incorporation.

What is the goal of a Public Sector Organisation?

To provide goods and services such as the NHS, schools, and roads to help local communities, without the aim of making a profit.

Define a Social Enterprise.

A business that exists to benefit other people (stakeholders) in the community rather than just to make profits.

What is Debt Factoring?

When a business sells its debts (money owed by customers) to another business, usually a bank, to gain cash quicker, typically receiving $85\%$ of the debt immediately.

What is the formula for Revenue (Total Sales)?

$$\text{Selling Price} \times \text{No. of Customers}$$

Define Fixed Costs and provide examples.

Expenditure that does not vary directly with output in the short run; examples include rent, salaries, and business rates.

What is the formula for Contribution per unit?

$$\text{Selling Price} - \text{Variable Costs}$$

What is the formula for the Break-even point?

$$\frac{\text{Fixed Costs}}{\text{Contribution per unit}}$$

What is the Margin of Safety?

The number of customers or units sold that are above the break-even output level.

What is the difference between Product Orientation and Market Orientation?

Product orientation designs activities around a business's own products and systems; Market orientation designs activities around the specific wants and needs of customers.

List the stages of the Product Life Cycle (PLC).

Development, Introduction, Growth, Maturity, and Decline.

What are the four categories in the Boston Matrix?

Star (high share, high growth), Cash Cow (high share, low growth), Problem Child (low share, high growth), and Dog (low share, low growth).

What is Price Skimming?

Setting a very high price for a new, unique product that has little competition to emphasize quality.

What distinguishes Above-the-line promotion from Below-the-line promotion?

Above-the-line uses mass media (TV, cinema, online) for wide coverage and is expensive; Below-the-line uses non-media methods (direct mail, BOGOF, personal selling) specifically targeted at customers.

Define M-commerce.

The selling of goods and services via mobile phones; it is the fastest-growing segment of e-commerce.

What is a Zero-hour contract?

A flexible working practice where an employee is hired but only used when there are jobs to do, with no guaranteed weekly hours.

What is the difference between Internal and External Recruitment?

Internal recruitment fills vacancies with existing staff (e.g., via promotion), while External recruitment brings in 'new blood' and ideas from outside the firm.

List the four types of training mentioned in the notes.

Induction training, On-the-job training, Off-the-job training, and Apprenticeship training.

What is a 360-degree appraisal?

A performance assessment involving feedback from a line manager, colleagues, subordinates, self-assessment, and sometimes customers or suppliers.

What is the formula for Labour Turnover percentage?

$$\frac{\text{Number of staff leaving}}{\text{Average number of staff employed}} \times 100$$

What is the difference between Delegation and Empowerment?

Delegation is when a manager passes job roles to employees for production; Empowerment passes authority specifically to make employees feel more motivated.

What is a Matrix Organisational Structure?

A structure where each worker has a head of department but also works in project-focused teams with a separate team leader, often leading to workers having two bosses.

According to Maslow's Hierarchy of Needs, what are the levels from bottom to top?

Basic, Safety, Social, Esteem, and Self-actualisation.

What did Herzberg's Two-factor theory distinguish?

Hygiene factors (e.g., pay, working conditions) which limit demotivation, and Motivators (e.g., achievement, responsibility) which to do with the actual job itself.

What is the difference between Theory X and Theory Y managers according to McGregor?

Theory X managers believe workers are lazy and need control/money motivators; Theory Y managers believe workers enjoy work and seek responsibility/satisfaction if motivated.

Define Collective Bargaining in the context of Trade Unions.

When employees act together as a group through a union to gain more power during negotiations for pay and working conditions.

What does ACAS stand for and what is its role?

Advisory Conciliation Arbitration Services; it helps employers and employees resolve problems through advice, conciliation, and arbitration.

What is the Added Value formula?

$$\text{Selling Price} - \text{Variable Costs}$$

What is the difference between Job, Batch, and Flow production?

Job production is one-off unique products; Batch is groups of identical products; Flow is continuous production of identical products using technology.

What is the formula for Capacity Utilisation percentage?

$$\frac{\text{Current output}}{\text{Maximum output}} \times 100$$

What are the characteristics of Just-in-time (JIT) production?

A lean production approach where suppliers deliver materials exactly when needed to minimize waste and storage costs.

Define Kaizen.

A lean production technique where employees share small-scale ideas with managers to implement step-by-step improvements in the business.

What is Total Quality Management (TQM)?

A quality assurance system aiming to develop a culture where every member of staff is committed to maintaining high standards and 'getting it right first time'.

What is the difference between Internal and External Economies of Scale?

Internal economies lower unit costs as the business itself grows (e.g., bulk buying); External economies lower unit costs due to improvements outside the business but within the same industry (e.g., better infrastructure).

What are the three types of Budgets?

Income, Expenditure, and Profit.

What is the formula for Gross Profit margin percentage?

$$\frac{\text{Gross Profit}}{\text{Sales Revenue}} \times 100$$