Intro to Business
It includes construction and manufacturing processes. For example, transforming extracted raw materials.
Secondary Sector
Name one internal and one external source of finance.
Internal Sources: Personal funds, family/friends, retained profits, sale of assets, share capital, loan capital, overdrafts, trade credit
External Sources: Bank loans, venture capital, crowdfunding, leasing, microfinance, business angels
A process of selecting specific market segment and then adjusting your marketing mix to appeal to them.
Target Marketing
List two of the main motivation theories that are more common to see on exams
Herzberg Two-Factor Theory
Maslow's Hierarchy of Needs
The use of flexible manufacturing systems to mass produce products that meet individual consumer needs and wants.
Mass Customization
An example is a family-run businesses with a desire to avoid unlimited liability.
Privately Held Company
The difference between capital and revenue expenditures
Capital Expenditures: Finance spent on long-term fixed assets which items of value that can repeatedly be used over the long term.
Revenue expenditures: Finance spent on short-term, daily operations of the business.
Name the 7Ps of marketing
4Ps = Product, Price, Place, Promotion
3Ps for Services = People, Process, Physical Evidence
List typical layers of an organizational structure from top to bottom
1. Board of Directors
2. CEO/President
3. Directors
4. Managers
5. Supervisors
6. Employees
Describe the general steps of the production process
Factors of Production (land, labor, capital)
leads to
Production where value is added
leads to
Output of goods/services
Name one internal and two external stakeholders.
Internal: Shareholders, Directors, Managers, Employees
External: Government, Competitors, Pressure Groups, Financiers, Suppliers, Customers
State the purpose of two efficiency ratios
Stock Turnover: Determines how many times a business can sell out of its stock/inventory in a given period.
Debtor Days: Determines how many days it takes for others owe you debt to pay you back.
Creditor Days: Focuses on how long a business takes to pay back its creditors.
Gearing Ratio: Used to review an organization’s long term liquidity position.
Explain the difference between contribution pricing and dynamic/surge pricing
Contribution Pricing: Setting a price based clearly on the direct or variable costs of producing a product
Dynamic/Surge Pricing: Practice of varying the price of a good or service to reflect changing market demand often with price changes throughout the day or season
Describe two factors that influence workforce planning
Demographic Changes
Changes in Labor Mobility
Immigration
Flexitime, Telework, Work from Home
Outline the difference between quality assurance and quality control
Quality assurance (QA): Management process of guaranteeing or assuring the consumer of a product's quality by ensuring that everything is done right the first time.
Quality control (QC): Traditional approach to quality management that involves inspecting, testing and sampling the quality of work.
These are the four layers of organizational objectives.
Vision, Mission, Strategies, Tactics
Name two ways to calculate average costs.
2. Average Fixed Costs + Average Variable Costs
Explain the different promotional techniques
Above-the-line (ATL): Traditional marketing methods that reach a large audience.
Below-the-Line (BTL): Strategies that target specific groups of people to promote products or services.
Through-the-Line (TTL): Strategy that combines ATL and BTL marketing techniques.
Explain three leadership styles
1. Autocratic
One person makes all the decisions
2. Situational
The right person and style for right situation
3. Democratic
Employees are included in decision making
4. Paternalistic
Employees are treated like family members
5. Laissez-Faire
Leaders set objectives but let employees meet them without much input
When working towards lean production, describe three common efficiency waste areas
1. Overproduction
2. Inventory not being processed
3. Defects that occur
4. Extra processing that are not needed
5. Motion that is not needed by people
6. Transport issues
7. Waiting for next step in a process
Two examples of internal diseconomies of scale
Lack of control, poor working relationships, Specialization boredom, bureaucracy, complacency
Calculate the gross profit for these details:
•Closing stock = $12,000
•Interest = $5,000
•Opening stock = $10,000
•Overhead expenses = $17,000
•Purchases = $35,000
•Sales turnover = 14,000 masks at $10 each
•Tax 15% of net profit after interest
Sales Revenue
= $14,000 * $10
= $140,000
Cost of Goods Sold
= Opening Stock + Purchases – Closing Stock
= $10,000 + $35,000 - $12,000
= $33,000
Gross Profit
= Sales Revenue - COGS
= $140,000 - $33,000
= $107,000
Explain the three types of sampling used for market research.
• Quota Sampling
The most used method where a certain number of people from different market segments is selected. The sample is grouped according to shared characteristics such as age, gender or occupation.
• Random Sampling
Involves giving everyone in the population an equal chance of being selected. It is useful when all members of a population have the same or very similar characteristics.
• Convenience Sampling
It simply uses research subjects that are easy to reach. It is particularly useful when time and cost are key factors.
Explain the main corporate culture theory used in the course
Handy's Gods of Management
1. Zeus - Power Culture
Authority is centralized with the top leader
2. Apollo - Role Culture
Power hierarchy is organized into clear roles
3. Dionysius - Person Culture
Focus is on workers pursuing their own goals
4. Athena - Task Culture
Power is focuses on those with expertise to complete tasks
Explain three circular business models.
1. Circular supply models: Focus on replacing finite natural resources with renewable, recyclable and biodegradable resources in a sustainable way.
2. Resource recovery models: Aim to re-use or 'recover' resource outputs by re-processing waste materials, such as glass, plastics and metals into new and usable resources.
3. Product life extension models: Extending the life cycle of their products in order to reduce the use of the finite resources needed to produce them.
4. Sharing models: Offering services where customers share products rather than owning such items for themselves.
5. Product service system model: Products are used to provide services, is based on the premise that businesses offer the function of a product rather than the physical product itself.