Business Basics
What is a mission statement?
The purpose of the business / its reason for existing.
Define span of control.
Number of subordinates reporting to a manager.
What is market segmentation?
Dividing the market into groups by characteristics.
What is revenue?
Price × quantity sold.
What is job production?
Producing a single unique product.
What type of growth occurs when a business expands by opening more branches?
Internal (organic) growth.
Which motivation theory uses “needs” arranged in a hierarchy?
Maslow.
What are the 7Ps?
Product, Price, Place, Promotion, Physical Evidence, People, Process.
Give the formula for contribution per unit.
Price – variable cost per unit.
Define break-even point.
Output where total costs = total revenue.
Name one internal stakeholder and one external stakeholder.
Internal: employee / owner. External: customer / government / supplier.
What is delegation?
Passing authority to subordinates.
Define USP.
A unique feature that differentiates a product or service from its rivals.
What does the current ratio measure?
Liquidity: ability to pay short-term debts.
One factor influencing location decisions.
Labour, cost, proximity to market, infrastructure.
What is a joint venture?
Two or more businesses agree to work together on a specific project.
Two reasons employees resist change.
Fear of unknown, loss of job, lack of trust.
What is penetration pricing?
Low initial price to gain market share.
Name one short-term and one long-term source of finance.
Short-term: overdraft. Long-term: share capital / loans.
What is lean production?
Minimising waste while maximising productivity.
Why might a business choose to stay small?
Flexibility, niche focus, control, fewer costs.
What type of leadership adjusts style depending on the situation?
Situational leadership.
Draw or describe the stages of the product life cycle.
Intro, growth, maturity, decline.
What is the purpose of a cash flow forecast?
Predict future inflows/outflows to ensure liquidity.
Difference between JIT and JIC stock control.
JIT: stock arrives when needed. JIC: safety buffer stock.