business everything

robotics

using robots to carry out manufacturing with no human involvement

capital intensive production

production that uses machinery more than labour

labour intensive production

production that uses labour/workers more than machinery

job production

Purpose of market research

Identify customer needs & wants, identify gaps in market, reduce risks

Primary research

Discovering new into for 1st time

Primary research examples

Focus groups, questionnaires, interviews, surveys, observations, test marketing

Secondary research

Using existing info

Secondary research examples

Internet, market reports, government reports

Quantitative

Data expressed in numbers

Qualitative

Data expressed in letters

Primary research pros

Can be tailored for business

Primary research cons

Time-consuming, expensive

Secondary research pros

Cheap + convenient

Secondary research cons

Not tailored for business

Market orientation

Businesses respond to customers needs & wants based on feedback

Product orientation

Business develops product based on what it is good at

Mass market

Mass appeal and very similar to competitors so USP will be hard to figure out

Niche market

Only appealing to certain group, must focus on USP, can charge high prices eg. Six-fingered gloves

Market segmentation

Splitting of market into different parts/segments

Market segment

The Part the market has been split into

Categories of segment

Location, age, gender, lifestyle, income

Static market

Not much change stays the same

Dynamic market

Rapid innovation

Marketing mix ④p

Price, promotion, place, product

Product life cycle

Based on predictions & can be incorrect

PLC stages

Intro → growth → maturity → decline

Extending PLC

Price reductions

Promotions

Innovation to modify existing product

New target Market

financial objectives

• market share

• profit

• sales

• survival

• financial security

non-financial objectives

• personal challenge

• personal satisfaction

• independence and control

• social objective

sole traders

when a business only has one owner

sole traders advantages

• easy to set-up

• financial info is private

• choose own working hours

• owner can keep all profits

sole traders disadvantages

• unlimited liability

• banks are less willing to give loans

• only one person for start-up fund and workload

• less expertise

partnerships

when a business has two or more owners

partnerships pros

• shared workload

• multiple people to fund start-up

• more expertise

• financial info is private

partnership cons

• split profits

• unlimited liability

• risk of disagreement

Private LC

a business that only sell shares to selected few

Private LC pros

• limited liability

• banks are willing to give loans

• no risk of takeover

Private LC cons

• financial info is public

• time consuming to set-up

Public LC

sell shares to anyone

Public LC pros

• limited liability

• can raise large amount of money

• banks are willing to give loans

Public LC cons

• financial info is public

• risk of takeover

• time consuming to set-up

unlimited liability

when the owner is responsible for all of the business’s debts so their personal possessions are at stake

incorporation

the process of how a registering your business as a limited company 

shareholders

anyone who owns a share/part of business

stakeholders

anyone who is affected by business

franchise

a type of license that grants a franchisee access to a franchisor’s business knowledge

franchisee

business that sells branded goods with the franchisors permission

franchisor

the branded big company that grants franchisee permission for sale of goods

benefits to franchisee

• higher profit

• support from owner

• brand recognition

cons to franchisee

• not cheap

• permission needed

• limited creative oppurtunities

benefits to franchisors

• increase reputation 

• access to new markets

• access to money 

cons to franchisors

• can ruin reputation if franchisee makes mistakes

• can loose complete control of business

• large investment

public corporations

type of business funded by the government that usually has a service motive

pros of public corporations

• protection of public interest

• easier planning

• autonomous set-up

cons of  public corporations

• difficult to manage

• complex legal requirements

multinationals

a business that operates in more than one country

pros of multinationals

• high-quality products is possible due to availability of raw materials

• ore jobs available

• lower production costs

cons of multinationals

• availability to raw materials can lead to exploiting natural resources

• locals stop earning money after a while

primary sector

extraction of raw materials

secondary sector

making/producing products

tertiary sector

production of services

decisions on business location

• proximity to labour

• proximity to market

• proximity to materials

• proximity to competition

why might government change locations

• to set up in areas with high unemployment

• avoid overcrowding

• minimise impact on local communities

trade blocs

a group of countries form trading with each other which makes selling easier by removing trade barriers

ecommerce

trading of goods and services on the internet

trade barriers

restrictions on international trading

tariffs

taxes charged upon arrival of imported goods in a country by customs authority 

market saturation

when a product is no longer in demand because many business offer it

globalization

how countries become more increasingly interconnected in all their activities

benefits to business of globalization

• access to larger markets

• reduce costs

• access more labour

• reduce taxes

threats to business of globalization

• increased competition

• risk of external shocks

• increased risk of takeover

exchange rates

value of a currency in terms of another

S-DICED

strong dollar imports cheaper exports dearer

social enterprise

business that aim to have a positive social impact

external factors impacting business

Political

Environmental

Social
Technology

how is success measured?

• revenue

• personal satisfaction

• growth of business

• employee satisfaction

• profit

• market share

business failure reasons

• over-spending money

• lack of competitiveness

• failure to innovate

Increased interest rates impact

• customers are less likely to spend

• loans are too expensive 

• people save more money 

Internal Communication

communication between 2 people within the same business

External Communication

communication between someone in a business with someone outside

communication channels

routes along which info may travel in a business

downward comm

from top of organisation to bottom (feedback)

upward comm

form bottom of organisation to top (performance reports)

horizontal comm

exchange of info between two people on the same level (team meetings)

formal comm

use of recognised channels when communicating (business letter)

informal comm

using non-approved channels (whatsapp,messages)

subordinates

people below you in the hierarchy

barriers in comm

• technological breakdown

• lack of clarity

• jargon-slang

• long chain of command

• inappropriate and inaccurate translations

improving communications

• better recruitment

• training

• technology

Induction training

training that introduces a new worker to organisation and how to do their job

on-the-job training

takes place in the workplace with a more experienced member of staff providing training

off-the-job training

happens away from the workplace

why should the business comply with law

• ensure staff know the risks involved in the workplace

• kept safe from injuries

• failure to comply- business could be sued for injury

benefits of training

• workers stay up to date

• workers become more skilled so workforce is more flexible

• employee job satisfaction and motivation increases so worker can take on new jobs and feel more connected to business

drawbacks to training

• high cost for some courses, equipment

• loss of output

• risk of leaving after all the training

• learning as you go may not be very useful

temporary working

employee is giving fixed-term contract and only have job for limited amount of time

benefits of temporary workers

business can hire more staff during busy periods without paying yearly salary 

seasonal working

if someone regularly has their job for particular times of year

casual employment

workers do not have guarantee of work from employer and can also turn down offers from employers