Business Paper 1: full set

What are the advantages and disadvantages of being a sole trader?

Advantages: Full control, keeps all profits, easy to set up.

Disadvantages: Unlimited liability, difficult to raise capital, full responsibility.

What are the advantages and disadvantages of a partnership?

Advantages: Shared decision-making, easier to raise capital, shared workload.

Disadvantages: Unlimited liability, profit shared, potential disagreements.

What are the advantages and disadvantages of a private limited company (Ltd)?

Advantages: Limited liability, easier to raise capital, control over shareholders.

Disadvantages: More regulations, harder to transfer shares, financial accounts must be published.

What are the advantages and disadvantages of a public limited company (PLC)?

Advantages: Can raise large amounts of capital, limited liability, can expand more easily.

Disadvantages: Risk of takeover, loss of control, complex legal requirements.

What are the advantages and disadvantages of being a franchisee?

Advantages: Established brand name, support from franchisor, lower risk.

Disadvantages: Franchise fees, less control, must follow franchisor rules.

What are the advantages and disadvantages of being a franchisor?

Advantages: Expansion with less financial risk, additional revenue streams. Disadvantages: Loss of brand control, must support franchisees, reputation risk.

What are the advantages and disadvantages of operating in the primary sector?

Advantages: Vital for raw materials, fewer competitors. Disadvantages: Affected by environmental changes, lower profits compared to other sectors.

What are the advantages and disadvantages of operating in the secondary sector?

Advantages: Can add value to raw materials, potential for economies of scale. Disadvantages: High initial investment costs, can be affected by automation.

What are the advantages and disadvantages of operating in the tertiary sector?

Advantages: High demand for services, less dependent on raw materials. Disadvantages: High competition, can be affected by economic downturns.

What are the advantages and disadvantages of setting business objectives?

Advantages: Provides direction, helps measure success. Disadvantages: Can be unrealistic, may need frequent adjustments.

What are the advantages and disadvantages of increasing market share?

Advantages: Higher revenue, stronger brand recognition. Disadvantages: May lead to increased competition, can require high investment.

What are the advantages and disadvantages of economies of scale?

Advantages: Lower unit costs, competitive pricing. Disadvantages: Risk of diseconomies of scale, harder to manage large businesses.

What are the advantages and disadvantages of breaking even?

Advantages: Shows business stability, helps plan pricing. Disadvantages: Does not guarantee profit, assumes all costs are known.

What are the advantages and disadvantages of cash flow forecasting?

Advantages: Helps manage finances, prevents liquidity issues. Disadvantages: Forecasts can be inaccurate, unexpected costs can arise.

What are the advantages and disadvantages of market segmentation?

Advantages: More targeted marketing, better customer relationships. Disadvantages: Can be expensive, requires detailed market research.

What are the advantages and disadvantages of a business plan?

Advantages: Helps secure funding, provides clear direction. Disadvantages: Time-consuming, does not guarantee success.

What are the advantages and disadvantages of competition in the market?

Advantages: Encourages innovation, improves customer service. Disadvantages: Can reduce profit margins, may lead to price wars.

What are the advantages and disadvantages of increasing business growth?

Advantages: More revenue, higher market influence. Disadvantages: Can lead to higher costs, potential over-expansion.

What are the advantages and disadvantages of expanding into new markets?

Advantages: More revenue sources, diversification. Disadvantages: Requires market research, risk of failure.

What are the advantages and disadvantages of having a competitive advantage?

Advantages: Higher market share, customer loyalty. Disadvantages: Competitors may copy, must continuously innovate.

What are the advantages and disadvantages of using price as a competitive strategy?

Advantages: Attracts price-sensitive customers, increases sales. Disadvantages: Can lead to lower profit margins, risk of price wars.

What are the advantages and disadvantages of customer loyalty programs?

Advantages: Increases repeat business, strengthens brand loyalty. Disadvantages: Can be costly, requires effective management.

What are the advantages and disadvantages of adapting to customer demand?

Advantages: Meets customer needs, improves sales. Disadvantages: Can require rapid change, may be costly.

What are the advantages and disadvantages of a business responding to economic changes?

Advantages: Can adjust to market trends, avoids losses. Disadvantages: Requires flexibility, may involve high costs.

What are the advantages and disadvantages of different sources of business finance?

Advantages: Provides necessary funding, supports growth. Disadvantages: Debt may incur interest, loss of control in equity financing.

What are the advantages and disadvantages of primary research?

Advantages: Up-to-date, specific to business needs, provides detailed insights. Disadvantages: Expensive, time-consuming, limited sample size.

What are the advantages and disadvantages of secondary research?

Advantages: Cheap, quick, provides historical data. Disadvantages: May be outdated, not specific to business needs, competitors have access.

What are the advantages and disadvantages of market segmentation?

Advantages: Better customer targeting, increases sales potential. Disadvantages: Can be expensive, requires detailed research, may miss wider audiences.

What are the advantages and disadvantages of niche marketing?

Advantages: Less competition, loyal customer base. Disadvantages: Limited market size, can be risky if demand changes.

What are the advantages and disadvantages of mass marketing?

Advantages: Large customer base, economies of scale. Disadvantages: High competition, high advertising costs, less personalisation.

What are the advantages and disadvantages of branding?

Advantages: Creates customer loyalty, differentiates from competitors. Disadvantages: Expensive, requires strong marketing, brand reputation risks.

What are the advantages and disadvantages of a strong USP?

Advantages: Differentiates from competitors, attracts customers. Disadvantages: Hard to maintain, may require continuous innovation.

What are the advantages and disadvantages of using price skimming?

Advantages: High initial profits, perceived as premium. Disadvantages: Competitors may enter, price-sensitive customers may wait.

What are the advantages and disadvantages of penetration pricing?

Advantages: Attracts customers quickly, builds market share. Disadvantages: Low initial profits, may be unsustainable long-term.

What are the advantages and disadvantages of competitive pricing?

Advantages: Reduces price wars, keeps business competitive. Disadvantages: May reduce profit margins, relies on competitor actions.

What are the advantages and disadvantages of cost-plus pricing?

Advantages: Ensures profit margin, simple to apply. Disadvantages: Ignores customer demand and competition, may lead to high prices.

What are the advantages and disadvantages of loss leader pricing?

Advantages: Attracts new customers, increases sales of other products. Disadvantages: Risk of losing money, customers may only buy discounted products.

What are the advantages and disadvantages of dynamic pricing?

Advantages: Maximises revenue, responds to demand. Disadvantages: Customers may feel pricing is unfair, requires constant monitoring.

What are the advantages and disadvantages of using advertising?

Advantages: Increases brand awareness, attracts new customers. Disadvantages: Expensive, effectiveness can be difficult to measure.

What are the advantages and disadvantages of sales promotions?

Advantages: Encourages quick sales, attracts price-sensitive customers. Disadvantages: Temporary sales boost, may reduce long-term profits.

What are the advantages and disadvantages of public relations (PR)?

Advantages: Builds good reputation, can be low-cost. Disadvantages: Hard to control, media coverage may be unpredictable.

What are the advantages and disadvantages of social media marketing?

Advantages: Engages customers, cost-effective. Disadvantages: Requires active management, risk of negative feedback.

What are the advantages and disadvantages of e-commerce?

Advantages: Wider customer reach, open 24/7. Disadvantages: Competition is high, cybersecurity risks.

What are the advantages and disadvantages of retail stores?

Advantages: Personal customer service, immediate purchase. Disadvantages: Higher operational costs, limited geographic reach.

What are the advantages and disadvantages of using wholesalers?

Advantages: Helps distribution, bulk buying discounts. Disadvantages: Lower profit margins, less direct customer control.

What are the advantages and disadvantages of direct distribution?

Advantages: Higher profit margins, better customer control. Disadvantages: Expensive to set up, harder to reach mass markets.

What are the advantages and disadvantages of indirect distribution?

Advantages: Wider market reach, easier logistics. Disadvantages: Lower profit margins, reliance on intermediaries.

What are the advantages and disadvantages of using influencers for marketing?

Advantages: Targets specific audiences, builds trust. Disadvantages: Expensive, influencer scandals may damage reputation.

What are the advantages and disadvantages of using customer loyalty programs?

Advantages: Encourages repeat purchases, builds brand loyalty. Disadvantages: Can be costly, may not attract new customers.

What are the advantages and disadvantages of internal recruitment?

Advantages: Faster, cheaper, boosts employee morale. Disadvantages: Limits new ideas, creates another vacancy.

What are the advantages and disadvantages of external recruitment?

Advantages: Brings in new skills and ideas, larger talent pool. Disadvantages: More expensive, longer process.

What are the advantages and disadvantages of on-the-job training?

Advantages: Cost-effective, practical experience, directly relevant to job. Disadvantages: Can be disruptive, quality depends on trainer.

What are the advantages and disadvantages of off-the-job training?

Advantages: Higher quality training, experts provide knowledge. Disadvantages: Expensive, employees may leave after training.

What are the advantages and disadvantages of autocratic leadership?

Advantages: Quick decision-making, clear authority. Disadvantages: Employees feel undervalued, low motivation.

What are the advantages and disadvantages of democratic leadership?

Advantages: Encourages teamwork, boosts morale. Disadvantages: Slower decision-making, disagreements may arise.

What are the advantages and disadvantages of laissez-faire leadership?

Advantages: Encourages creativity, employees feel trusted. Disadvantages: Lack of guidance, productivity may drop.

What are the advantages and disadvantages of financial motivation methods?

Advantages: Encourages higher productivity, attracts talent. Disadvantages: Can be costly, may create unhealthy competition.

What are the advantages and disadvantages of non-financial motivation methods?

Advantages: Increases job satisfaction, long-term motivation. Disadvantages: Harder to measure impact, not effective for all employees.

What are the advantages and disadvantages of job rotation?

Advantages: Reduces boredom, increases skills. Disadvantages: Can be disruptive, employees may not like frequent changes.

What are the advantages and disadvantages of job enrichment?

Advantages: Increases job satisfaction, improves employee skills. Disadvantages: Some employees may not want extra responsibility.

What are the advantages and disadvantages of trade unions?

Advantages: Protects employee rights, negotiates better wages. Disadvantages: Can lead to strikes, may increase business costs.

What are the advantages and disadvantages of flexible working?

Advantages: Increases employee satisfaction, improves work-life balance. Disadvantages: Harder to manage teams, not suitable for all jobs.

What are the advantages and disadvantages of workforce planning?

Advantages: Ensures right staff levels, helps with future growth. Disadvantages: Requires accurate forecasting, may be costly.

What are the advantages and disadvantages of performance appraisals?

Advantages: Helps improve employee performance, identifies training needs. Disadvantages: Time-consuming, may cause stress for employees.

What are the advantages and disadvantages of commission-based pay?

Advantages: Encourages higher sales, rewards top performers. Disadvantages: Can create stress, may lead to aggressive selling.

What are the advantages and disadvantages of bonus schemes?

Advantages: Increases motivation, rewards good performance. Disadvantages: Can be costly, may create inequality between employees.

What are the advantages and disadvantages of discrimination laws?

Advantages: Promotes fair treatment, protects employees. Disadvantages: Can be complex, businesses must comply with regulations.

What are the advantages and disadvantages of industrial action?

Advantages: Can lead to better working conditions, gives employees a voice. Disadvantages: Disrupts business operations, may cause financial losses.

What are the advantages and disadvantages of equality in the workplace?

Advantages: Encourages diversity, improves business reputation. Disadvantages: Some employees may resist change, requires strong policies.

What are the advantages and disadvantages of remote working?

Advantages: Saves travel time, increases flexibility. Disadvantages: Can reduce teamwork, harder to monitor productivity.

What are the advantages and disadvantages of using CVs for recruitment?

Advantages: Quick screening process, provides a summary of skills. Disadvantages: Can be exaggerated, does not assess personality.

What are the advantages and disadvantages of using application forms?

Advantages: Standardized information, easier to compare candidates. Disadvantages: Time-consuming for applicants, may not capture full potential.

What are the advantages and disadvantages of group interviews?

Advantages: Saves time, assesses teamwork skills. Disadvantages: Can be intimidating, some candidates may not perform well in groups.

Business

A organisation that provides goods or services to customers in exchange for money.

Entrepreneur

A person who takes risks to start and manage a business.

Goods

Physical, tangible products like cars, phones, or clothes.

Services

Intangible products like banking, education, or haircuts.

Primary Sector

The sector of industry that extracts natural resources, such as farming, fishing, and mining.

Secondary Sector

The sector that manufactures and processes raw materials into finished goods, such as car production or house construction.

Tertiary Sector

The sector that provides services rather than goods, such as retail, healthcare, and entertainment.

Opportunity Cost

The next best alternative that is given up when making a decision.

Sole Trader

A business owned and operated by one person, with unlimited liability.

Partnership

A business owned by two or more people who share profits and responsibility.

Limited Liability

When a business owner’s financial responsibility is limited to their investment in the business.

Unlimited Liability

When a business owner is personally responsible for all debts of the business.

Private Limited Company (Ltd)

A company owned by shareholders, with shares not sold publicly and limited liability.

Public Limited Company (PLC)

A company whose shares are sold to the public on the stock exchange, with limited liability.

Franchise

A business model where a firm (franchisee) operates under the brand name of another business (franchisor) in exchange for fees.

Stakeholders

Individuals or groups who have an interest in the success of a business, such as customers, employees, and shareholders.

Business Objective

A goal a business aims to achieve, such as profit maximisation, survival, or growth.

Market Share

The percentage of total sales a company has in an industry compared to its competitors.

Revenue

The total income a business earns from selling goods and services.

Profit

The difference between revenue and total costs. (Profit = Revenue - Total Costs)

Fixed Costs

Costs that do not change with output, such as rent and salaries.

Variable Costs

Costs that change depending on output, such as raw materials and wages for hourly workers.

Economies of Scale

The cost advantages that businesses gain as they grow and produce more.

Business Plan

A document outlining a business’s objectives, strategies, and financial forecasts.