Business Studies

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What are the characteristics of an entrepreneur?
Good work ethic, confident, positive, realistic and willing to take risks
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What risks do entrepreneurs take?
Failure, Financial loss, lack of security (no sick pay, holiday or pension), damage to reputation
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What are the four main customer needs?
Quality, Choice, Price, Convenience
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What is the purpose of market research?
To identify and understand customer needs. To identify gaps in the market. To reduce risks and to support better decision making.
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What are the two types of market research?
Primary and Secondary
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What is Primary research?
Primary research is finding out the information and doing the research yourself by use of questionnaires, interviews, focus groups and observations.
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What is Secondary research?
Secondary research is utilising other peoples/organisations information that already exists further to their research. Main methods include Government statistics, company reports, the internet and large scale consumer surveys.
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What are the pro's of questionnaires?
You get the information you need. It tells you the customer needs. Easy to do. Easy to target certain types of people. Information is up to date.
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What are the con's of using questionnaires?
Some people will not give honest answers. It takes a long time to get the information to you. Response levels are low. Can be expensive. Interviewers may skew the answers with their bias.
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What is a Focus Group?
A small group of people who are put together to discuss their views/opinions/beliefs and attitudes towards the product/service before it is released to the public
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What are the pro's of a Focus Group?
You can learn from your target audience detailed information, up to date information, can be carried out online (cheaper).
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What are the con's of a Focus Group?
Some people may not be honest, expensive, small sample used so it cannot be fully representative of the target market, opinions can be influenced by dominant members of the group.
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What is an Observation?
An observation is the act of watching someone/something closely in order to gain information.
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What are the pro's of observation?
Data is up to date. People react differently when they do not know they are being observed, therefore more honest results, giving reliable data.
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What are the cons of Observation?
Expensive. Time consuming. Data is inconclusive, does not explain why the customers may do something.
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What are the pros of Interviews?
Up to date information, detailed responses, online interviews are cheap to carry out.
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What are the Cons of Interviews?
Time consuming, expensive, possible biased results due to interview techniques.
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What forms of secondary research are there?
Trade associations and magazines, market research companies - eg Mintel, Company reports or previous sales information, Government statistics - eg ONS.
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What are the pro's and cons of Trade Associations and Magazines
Pros - Cheap to buy, easy to find Cons - misleading
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What are the pros and cons of market research companies?
Pros - Good information, any information you need. Cons - Expensive, out of date.
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What are the pros and cons of company reports and sales information?
Pros - very detailed, free, easy to access. Cons - out of date, not directly relevant, not very trusted.
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What are the pros and cons of Government Statistics?
Pros - it is free, easy to access. Cons - out of date, not directly relevant.
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What is qualitative data?
Data is descriptive information, that cannot be measured in numbers.
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What is quantitative data?
Data that is numerical, eg graphs
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What are pros for quantitative date?
Really easy to compare. Easy to draw conclusions from. Easy to analyse.
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What are the cons of quantitative data?
You do not get a reason for the answer.
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What are the pros of qualitative data?
Qualitative data gives peoples reasons and not just the statistics. It helps businesses listen to a customer needs rather than a definitive conclusion.
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What are the cons of qualitative data?
Results depend on the skill of interviewer. A small sample of people usually participate, resulting in a potentially biased outcome. Responses are quite subjective.
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What are the main segments in the market?
Age. Gender. Hobbies. Different incomes. Family types. Geographic location. Purchasing behaviour.
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What is market segmentation?
Dividing the market up into groups of buyers with similar characteristics.
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What is Market Mapping?
Market mapping is the process of creating a diagram that identifies all the products/services in a market and maps them against 2 features - usually price v's quality.
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What are the pros and cons of Market Mapping?
Pros - shows a gap in the market. Shows your position in the market. Clear to see your opponents in the market. Cons - contraversial /your own opinion. Hard to get it accurate. Does not explain why.
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What are direct competitors?
Businesses that sell the same products or services - eg Apple and Samsung.
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What are indirect competitors?
Businesses that do not sell the same product/services, but still find themselves in competition with one another - eg Emirates (luxury airline) and Easy Jet (budget airline)
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What is a SWOT analysis?
To assess the Strengths, Weaknesses, Opportunities and Threats of a business and their competitors.
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What are Aims and Objectives?
All businesses have aims and objectives - these may be Financial objectives or Non-Financial objectives. The AIM is the overall goal that the business wants to achieve. The OBJECTIVES are how the business will achieve it's AIM.
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Objectives
Need to be linked to measurable targets and reviewed on a regular basis. A successful business will always review their objectives and set new ones.
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Why does a business set aims and objectives?
To show business growth. Setting objectives gives specific targets and motivation.
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What are the main types of financial objectives?
Survival, Profit, Sales, Market Share and financial security.
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What is Survival in business?
To reach sustainable level in sales to cover all costs.
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What is Profit?
Profit = Revenue - costs. To maximise profits increase revenue and reduce costs.
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Sales
To get as many sales as possible when you set up a business.
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Market Share
In order to increase market share a business needs to increase their sales against those of their competitors.
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Financial Security.
Entrepreneurs may need to find another source of money to pay bills.
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What are Non-Financial Objectives
Social concerns, Personal satisfaction, Challenge, Independence, Control.
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Social Objectives
Businesses that trade for social or environmental purposes.
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Control
Entrepreneurs may wish to have control over their working lives. Owning a business gives more flexibility in terms of days off, holidays, working hours etc. They also get to have control over the business - ie what products or services are sold.
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Why do different businesses have different aims and objectives?
Different customer needs, Different entrepreneurs have different goals, Size of businesses and Different markets.
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Private Sector Objectives
Manufacturers, retailers, banks, architects, builders owned by private investors (not the Government) are in private sector.
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What are the objectives likely to be of Private Sector Organisations?
Maximise profits by increasing sales and reducing costs, increased market share, expand the business.
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What is a public sector organisation?
BBC, Schools, Hospitals, Police etc are all owned by the Government and so are in the public sector. Their aims are usually to benefit the public.
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Not for Profit/Voluntary sector
Community groups, charities, eg Help the Aged, Big Issue. These types of organisation might have the following objectives: Increase revenue from donations, reduce costs, provide for those in need and to raise awareness of the cause.
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Other cards in this set

Card 2

Front

What risks do entrepreneurs take?

Back

Failure, Financial loss, lack of security (no sick pay, holiday or pension), damage to reputation

Card 3

Front

What are the four main customer needs?

Back

Preview of the front of card 3

Card 4

Front

What is the purpose of market research?

Back

Preview of the front of card 4

Card 5

Front

What are the two types of market research?

Back

Preview of the front of card 5
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