business paper 1

• what are the characteristics of a successful entrepreneur?

  determination, confidence, risk taking, creativity
• identify why people choose to start their own business.

  spotting an opportunity, develop an idea, satisfying the needs of customers
• what is limited liability?

  owners can only lose their investments even if the company has huge debts
• what is unlimited liability?

  owners are responsible for all debts and may have to sell personal possessions
• which two ownership's have unlimited liability?

  sole trader and partnership
• which two ownerships have limited liability?

  public limited company and private limited company
• what are the internal stakeholders?

  owners and employees
• what are the external stakeholders?

  customers, suppliers, government and local community
• what are the two ways a business can grow?

  externally and internally
• identify the methods of growing internally

  increase market share, develop new products and gain new customers
• Identify two methods of external growth that a business could use

  merger and takeover
• what are the two types of market research

  secondary and primary
• identify five ways that a business can segment its market

  lifestyle, gender, age, location, income
• what are the advantages of primary research?

  up to date, easy to target specific customers
• what are the advantages of secondary research?

  usually cheap, information already collected and analysed
• what are the disadvantages of primary research?

  time consuming, expensive
• what are the disadvantages of secondary research?

  less control, outdated
• what are the benefits of market segmentation?

  helps develop products that suit customer needs, makes it easier to identify new products, ensures marketing is more targeted
• what are the 4ps?

  product, price, place, promotion
• what are the benefits of product innovation?

  increase in sales, increases a businesses market share
• what are the five types of secondary research?

  newspaper, magazines, census, website and internal data
• what are the four types of primary research?

  questionnaires, interviews, focus groups and trialling
• what are the five pricing methods?

  competitor, skimming, cost-plus, penetration and promotional
• what are the two methods of promotion?

  advertising and point of sale
• identify two ways to 'extend' the life cycle of a product

  change target market, adding more or different features
• what are the different ways of advertising?

  social media, website, radio, print media and tv
• what are the methods of point of sale?

  price reductions, loss leaders, competitions and free samples
• what are the benefits of a tall structure?

  clear line of communication, opportunity for promotion within the organisation motivates workers
• what are the benefits of a flat structure?

  communication is quick, workers can communicate to a wider range of colleagues to generate new ideas
• what are the drawbacks of tall structure?

  workers are isolated in their own departments, managers may have too much control
• what are the drawbacks of a flat structure?

  staff can be overworked, promotional opportunities are fewer
• what is recruitment?

  the process of finding people to work in a new or established business
• why do some businesses recruit?

  fill in skills gap, business growth, replace employees who leave
• what are the features of internal recruitment?

  notice boards, word of mouth, internal newsletters, emails
• what are the features of external recruitment?

  social media, website, job centre
• what are the advantages of internal recruitment?

  workers will understand the work culture, promotion can increase motivation and staff morale
• what are the disadvantages of internal recruitment?

  doesn't bring new skills to business, existing staff may be undervalued, may cause jealousy amongst other workers
• what are the advantages of external recruitment?

  bring in new skills, avoids jealousy internally, range of applicants is wide
• what are the disadvantages of external recruitment?

  can be expensive, time consuming, applicants are not familiar with the business
• what is the final stage of selection?

  letter of application, interviews, tests and presentation, group activities and reference