Business Decisions in Context
A target or goal that a business wants to achieve.
What is meant by a business objective?
Is the definition of revenue.
What is the total income from sales?
Dividing the market into groups with similar needs.
What does market segmentation mean?
A business that provides goods or services to another business.
What is a supplier?
'Miss, can I have a merit?'
Who is Rupert?
This is the objective that is most likely to be prioritised by a new start‑up.
What is Survival – to cover costs and stay in business
A product selling for £8 and costs £5 to make means £3 it it's this.
What is gross profit per unit?
This element of the 4Ps is most linked to brand image.
What is Promotion?
Checking quality during the production process.
What does quality assurance mean?
‘Your brand is what people say about you when you’re not in the room.’ — This Microsoft founder.'
Who is Bill Gates?
Other than social benefit, this is why profit maximisation may not be the main objective for a social enterprise.
What is Profits are reinvested to support a cause.
A business with high sales revenue may still go bankrupt due to this.
What is poor cash flow or expenses being higher than income?
A premium chocolate brand risks this by suddenly reduces its price by 40%.
What is loss of premium image / perceived quality?
Lower storage costs and less waste are benefits of this.
What is just‑in‑time (JIT) production.
‘The best marketing doesn’t feel like marketing.’ — This Apple co‑founder.
Who is Steve Jobs?
A business decides to cut costs by reducing staff training.
These are the two stakeholder groups are most negatively affected?
What is employees and customers?
The rising prices of raw material are a problem for this.
What is they increase variable costs/reducing profit unless prices are increased.
Adding a fixed percentage profit to the cost of production.
What is cost‑plus pricing?
Lower costs but slower delivery; potential quality issues or ethical concerns are possible impacts of this.
What are the impacts of a business switches to cheaper overseas suppliers?
‘It’s OK to take risks. Failure is an option here.’ — This Amazon founder.
Who is Jeff Bazos?
A large PLC announces factory closures to improve profits.
This is how the business could reduce negative impact.
What is retraining, redeployment or consultation?
Covering costs early and reduces risk is an advantage however, it may require high prices or cost-cutting that reduces quality is a disadvantage of doing this quickly.
What is breaking even?
Businesses use BOGOF offers for this reason.
What is to increase short‑term sales or attract new customers.
Greater distances and transport delays increase this.
What is lead times?
‘When something is important enough, you do it even if the odds are not in your favor.’ — SpaceX CEO.
Who is Elon Musk?