Business Paper 1

Unit 1 - Business Activity, Unit 2 - Marketing, Unit 3 - People

What is a digital distrubtion channel?

Is the distrubition of goods and services digitally though a website

What is primary research? 4 Examples:

Research conducted firsthand

e.g. Questionnaires, interviews, trialling, focus group

What is an entrepreneur?

A person who sets up their own business and is willing to take a risk

What is forward vertical growth?

Is when a business mergers/takeovers a business that it supplies goods and services to

What are the characteristics of an entrepreneur?

Creativity

Risk taking

Determination

Confidence

What is a business plan?

A document that outlines the businesses aim and objectives and how they will achieve them

What is the purpose of a business plan?

To obtain finance e.g. A bank loan

What is a sole trader?

A business set up by 1 person

Advantages of being an sole trader:

Can keep all the profits

Can make decisions quickly

Disadvantage of being an soul trader:

No one to develop ideas

Unlimited liability

What is a partnership?

A business set up between 2 to 20 people

Advantage of being a partnership:

More ideas

Can share the set-up costs

Disadvantage of being a partnership:

Have to spilt the profits

Unlimited liability

What is an LTD?

A private limited company that sells shares to friends and family

What is an PLC?

A public limited company that sells shares on the stock exchange

Advantage of being a limited company:

Can gain a high gain of capital

Limited liability

Disadvantage of being a limited liability:

Can lose control of your business

What is unlimited liability?

When the business bank account and the personal bank account are not separate

All the business debts rest with the owner

Your personal assets can be taken away

What is limited liability?

When the business bank account and the personal bank account are separate

The debts of the business is limited to the amount that was invested

Your personal assets can not be taken away

What 2 businesses have unlimited liability?

Sole trader

Partnership

What 2 businesses have limited liability?

LTD and PLC

What are the 5 business objective?

Survival

Profit

Provide a service

Growth

Increase market share

Who are internal stakeholders?

Owners

Employees

Who are external stakeholders?

Customers

Suppliers

Government

Local community

What is organic growth?

Growing inside the business

What are the methods of organic growth?

Increasing output

Gaining new customers

Developing new products

Increasing market share

Advantages of organic growth:

Cheaper method of growth

Can stay in control of business

Disadvantage of organic growth:

Slow method of growth

What is eternal growth?

Growing externally through mergers and takeovers

Advantage of external growth:

Quicker way to grow

Access more customers

Disadvantage of external growth:

Costly

Conflict between 2 businesses

What is horizontal growth?

A merger or take over where 2 businesses are involved in a similar operation

What is backwards vertical growth?

Is when a business mergers/takeovers a business that supplies it with its goods and services

What is diversification?

Is when a business mergers/takeovers a business that is completely different (have no connection)

Advantage of diversification:

Reduces risk due to having another market as a back up

Disadvantage of diversification:

Lack of knowledge and expertise of the market

What is the purpose of marketing within the business?

Identifying and understanding its customers

Informing customers and increasing sales

What is primary research? 4 Examples:

Reserach conducted first hand e.g questionnaries, inteviews, trialling, focus groups

Advantage of primary research:

Reliable

Disadvantage of primary research:

Higher costs

More time-consuming

What is secondary research? 5 examples:

Using secondhand research that already exist

e.g. newspapers, magazines, sensors, website, internal data

Advantage of secondary research:

Quick

Cheap

Disadvantage of secondary research:

Less reliable

What is qualitative data?

Collecting data about peoples thoughts and opinions

(open questions)

Advantage of using qualitative data:

More in-depth data collected

Disadvantage of using qualitative data:

Harder to analyse

Advantage of using quantitive data:

Easier to analyse

What is quantitative data?

Collecting is this statistical data

(close questions)

Disadvantage of using quantitive data:

Does not tell you why? Lacks depth

What does market segmentation mean?

Breaking down the market to identify a target market

How does a business segment the market?

Age

Income

Location

Lifestyle

What is the marketing mix?

Product

Price

Place

Promotion

What is innovation?

The improvement of an original idea

What are the stages of the life-cycle?

Introduction

Growth

Maturity

Decline

(extension plan)

Advantage of the product life-cycle:

Know when to do advertising

Can develop extension plan strategies