Purpose of Business
Influences on Business
Marketing
Finance
100
What is meant by the 'primary sector'?
Organisations that are involved in extracting raw materials.
100
Explain one drawback of globalisation.
- Fierce competition from overseas firms
- UK businesses are under threat of takeover from international firms
- New competitors
100
What is the difference between a customer and a consumer?
Customers purchase a product.
Consumer use a product.
100
What is the formula for closing balance?
Net cash flow plus opening balance.
200
List the four factors of production.
Land, Labour, Capital, Enterprise
200
Explain one effect that an increase in employment (nationally) might have on a business.
- Higher sales: more people employed = increased spending
- Increased employment costs: businesses compete to employ workers, usually by paying them more
200
Explain two ways to segment a market.
- Gender
- Age
- Location
- Income
- Stage of life cycle
200
How do you find a business's gross profit?
Gross profit = Revenue - Cost of Sales
300
Explain the difference between unlimited and limited liability.
Limited liability: there is a limit to how much a business owner can owe.
Unlimited liability: the owner's personal possessions are at risk if there are any problems.
300
State one reason why a business might decide to use cloud computing services?
- Cloud services allow businesses to analyse data and identify trends
- Cloud services allow businesses to respond quickly to market changes
300
Explain loss leader pricing.
A business sells one product at a loss in the hope that customers will buy other products as well.
300
What is the formula for average rate of return?
400
What is a private limited company? (LTD)
A company that cannot publicly advertise its shares for sale. (Often owned by family members)
400
Explain the situation which must occur for a monopoly to take place.
When a business does not face any competition in a particular market.
400
What is the Boston Matrix?
A model that looks at products in terms of their share of the market and the growth of that market.
400
Identify the margin of safety.
The space between the BEP and current production (total sales).
500
What is the difference between internal growth and external growth?
Internal growth: "organic growth", when a business expands by selling more of its own products.
External growth: a business expands by joining with another business.
500
Explain one element of the Consumer Rights Act.
- Product quality
- Returning goods
- Repairs and replacements
- Delivery rights
500
Identify the stages of the product lifecycle.
500
What is the formula for net profit margin, and what does this compare?
Net profit margin = (net profit / revenue) x 100
This profit ratio compares a business's net profit for a trading period with the revenue figure for the same period.