Business paper one

enterprise, planning, ownership, aims/objectives, stakeholders, growth

goods

tangible products e.g. food, clothes

services

intangible products e.g. haircut, train journeys

invention

creating something brand new

innovation

adapting an existing product

needs

food, water, clothes, shelter, warm

wants

event tickets, designer clothes, holidays, cars

needs of an entreprenuer

land, labour, capital, enterprise

enterprise

willingness to take risks, organise resources and make decisions

characteristics of an entrepreneur

creativtity, risk taking, determination, confidence

risks

financial loss, business failure, lack of security

minimising risk

business plan, market research, ensuring you have sufficient money

rewards

profit, independence, success

business plan

business idea, smart targets, market research, revenue, costs and profits, cash flow, sources of finance, location, marketing mix

purpose of a business plan

minimise risk, obtain finance

sole trader

a small business with one owner. may have other employees

partnership

typically between 2 and 20 owners. can have other employees

plc

public limited company. risk of hostile takeover

ltd

private limited company. shareholders must be invited

smart targets

specific, measurable, achievable, realistic, time bound

aim

overall goal for a business. e.g. survival, profit, growth

objective

steps taken to achieve goals

shareholders

part owners of a business

stakeholders

people with an interest in a business e.g. customers, employees

organic (internal) growth

slower method of growth using the businesses own resources

external growth

when a business merges with or takes over another business to expand

backwards vertical

merging with the business before them in the supply chain

forwards vertical

merging with the business after them in the supply chain

horizontal merger

merging with the same type of business

diversification - merger

merging or taking over a completely different type of business

economies of scale

cost advantage that a business obtains when the cost per unit decreases because the scale of the business

diseconomies of scale

a cost disadvantage to a business, the cost per unit increases due to too much expansion

customer needs

price, quality, convenience, choice

identifying customer needs

helps to generate sales and makes survival more likely

primary market research

research carried out by you. e.g. survey or questionaire

secondary market research

done by others e.g. competitors prices, internet

marketing mix

price, product, place, promotion

factors affecting price

inflation, the quality of the product, cost of production,

factors affecting place

close or far from the target market? footfall traffic?

product

refers to what the company is selling. physical or digital items. must be what the customer needs or wants

price

how much money the product or service is sold for. businesses use the different types of pricing strategies

place

refers to how the product is distributed. directly, through a shop, online or by a wholesaler. the choice can significantly impact overall marketing

promotion

raising awareness of the product/service. using financial promotions, pr and social media

marketing mix

product, promotion, price, place

market data

information that a business needs to know about the characteristics of a particular market - changes in demand, target market and market share, impact of change and effect of promotional activity

tall structure

sometimes referred to as hierarchical. many layers of management leads to clear accountability

flat structure

only a few layers of management. typical in small businesses

human resources

coordination of all issues relating to the people a business employs to ensure that the business is able to operate

span of control

the number of staff that a manager has responsibility for

chain of command

the route instructions and communication flows from the top to the bottom of a business

delegation

a process where managers give tasks to employees further down the chain of command

delayerings

money saving process where a business removes layers of its management to make a flatter structure

subordinates

members of staff below a manager in the chain of command

insufficient communication

negatively impacts efficiency and motivation as employees do not understand what is going on or what they have to do

excessive communication

too much or the same information from multiple sources. feeling stressed/overloaded