business paper 1

• What is a digital distrubtion channel?


  Is the distrubition of goods and services digitally though a website
• What is primary research? 4 Examples:

  Research conducted firsthand

  e.g. Questionnaires, interviews, trialling, focus group
• What is an entrepreneur?

  A person who sets up their own business and is willing to take a risk
• What is forward vertical growth?

  Is when a business mergers/takeovers a business that it supplies goods and services to
• What are the characteristics of an entrepreneur?

  Creativity

  Risk taking

  Determination

  Confidence
• What is a business plan?

  A document that outlines the businesses aim and objectives and how they will achieve them
• What is the purpose of a business plan?

  To obtain finance e.g. A bank loan
• What is a sole trader?

  A business set up by 1 person
• Advantages of being an sole trader:

  Can keep all the profits

  Can make decisions quickly
• Disadvantage of being an soul trader:

  No one to develop ideas

  Unlimited liability
• What is a partnership?

  A business set up between 2 to 20 people
• Advantage of being a partnership:

  More ideas

  Can share the set-up costs
• Disadvantage of being a partnership:

  Have to spilt the profits

  Unlimited liability
• What is an LTD?

  A private limited company that sells shares to friends and family
• What is an PLC?


  A public limited company that sells shares on the stock exchange
• Advantage of being a limited company:

  Can gain a high gain of capital

  Limited liability
• Disadvantage of being a limited liability:

  Can lose control of your business
• What is unlimited liability?

  When the business bank account and the personal bank account are not separate

  All the business debts rest with the owner

  Your personal assets can be taken away
• What is limited liability?


  When the business bank account and the personal bank account are separate

  The debts of the business is limited to the amount that was invested

  Your personal assets can not be taken away
• What 2 businesses have unlimited liability?

  Sole trader

  Partnership
• What 2 businesses have limited liability?


  LTD and PLC
• What are the 5 business objective?

  Survival

  Profit

  Provide a service

  Growth

  Increase market share
• Who are internal stakeholders?

  Owners

  Employees
• Who are external stakeholders?


  Customers

  Suppliers

  Government

  Local community
• What is organic growth?

  Growing inside the business
• What are the methods of organic growth?

  Increasing output

  Gaining new customers

  Developing new products

  Increasing market share
• Advantages of organic growth:

  Cheaper method of growth

  Can stay in control of business
• Disadvantage of organic growth:

  Slow method of growth
• What is eternal growth?

  Growing externally through mergers and takeovers
• Advantage of external growth:

  Quicker way to grow

  Access more customers
• Disadvantage of external growth:

  Costly

  Conflict between 2 businesses
• What is horizontal growth?

  A merger or take over where 2 businesses are involved in a similar operation
• What is backwards vertical growth?

  Is when a business mergers/takeovers a business that supplies it with its goods and services
• What is diversification?


  Is when a business mergers/takeovers a business that is completely different (have no connection)
• Advantage of diversification:


  Reduces risk due to having another market as a back up
• Disadvantage of diversification:


  Lack of knowledge and expertise of the market
• What is the purpose of marketing within the business?

  Identifying and understanding its customers

  Informing customers and increasing sales
• What is primary research? 4 Examples:

  Reserach conducted first hand e.g questionnaries, inteviews, trialling, focus groups
• Advantage of primary research:

  Reliable
• Disadvantage of primary research:

  Higher costs

  More time-consuming