Business Studies Module 3

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  • Created by: wafflypig
  • Created on: 29-04-16 09:09
What is a consumer good?
A tangible product which is designed for the end user
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What is a consumer durable?
A tangible product that can be used by the end user over and over again
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What is a single use consumer good?
A tangible product that the end user uses only once
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Give an example of a single use consumer good
Can of beans
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Give an example of a consumer durable
Sofa, car
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What is a service?
An ecomonic activity that does not produce a tangible good
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What is a commercial service?
An economic activity that produces a non-physical good for businesses
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What is a personal/direct service?
An ecomonic activity that does not produce a physical good for consumers
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Why has manufacturing of goods in the UK declined (2 reasons)?
Cheaper elsewhere (e.g. China), more machinery = less workers,
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Why has services increased in the UK (2 reasons)?
We are good at services, government spending on NHS increased, people are wealthier so will pay people to do things for them
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What is the private sector?
Parts of the economy owned by private individualds/businesses
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What is the public sector?
Parts of the economy owned by the government
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Give 2 examples of goods provided by the government
Things that don't make money e.g. streetlighting and roads
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Give 3 types of production
Batch, flow and job
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What is job productin?
When you do one whole job at a time which produces one off goods
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Give 2 advantages of job production
More variety = not boring = loyal workers. Unique products so people will pay more.
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Give 2 cons of job productions
Expensive to pay workers. Hard to find skilled workers. Slow so expensive. Have to pay workers high wages
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What is batch production?
A number of products are made at the same time. E.g. a baker
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Give 2 advantages of batch production
Recalls can easily be made, quicker than job = more products, still quite intersting, variety of products = higher prices charged
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Give 2 disadvantages of batch production
Slower than flow, not as much variety as flow, work not as intersting as job so workers might get bored and leave
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What is flow production?
Taking a place on the production line where workers do one small job to make a more complex product. E.g. cars
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Give 2 advantage of flow production
Faster = more products, simple job so easy to recruit, benefits from EoS, cheaper to pay workers
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Give 2 disadvantages of flow production
No variety, needs a high demand to use flow, high cost to set up production line, workers may get bored so skive
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What is just in case stock control?
Storing goods in a warehouse, just in case you run out or a supplier is late with delivery
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What is just in time stock management?
Having raw materials delivered just in time to be used in the production line so you don't buy more than you need
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Give 2 advantages of JIT
No need for expensive warehouses, no money tied up in stock, stock will not go out of fashion, quality improved because poor quality can't be tolerated (you have only just enough)
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Give 2 disadvantages of JIT
Can be issues if delivery is delayed, might be more expensive because no bulk discounts, stock may increase in price so having some in storage would be good, many suppliers can't supply for JIT so hard to find suppliers, more deliveries = environment
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What is quality?
Ensuring DURABILITY, CONSISTENCY and RELIABILITY in a factory of a good standard
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Give 3 ways good quality can be achieved
Good raw materials, well trained workers, using up to date technology, good design, good process
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Give 3 reasons why quality is important
Business will gain a poor reputation, lose money in refunds, workers can become demotivated
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What does the purchasing department do?
Buy materials at the right price, in the right quantity
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What does the production department do?
Makes the product to the correct standard of quality
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What does the marketing department do?
Conduct market research and make decisions considering the marketing mix
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What does the sales department do?
Sell products at the right price and find new customers
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What does the HR (personnel) department do?
Look after issues regarding employees including training and recruitment
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What does the finance/accounting department do?
Set budgets and look after anything to do with money, including accounts such as profit and loss accounts
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What does interdependence mean?
When departments rely on each other, on cannot work without the other
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Give 3 reasons why businesses might want to grow
Improve market share, benefit from economies of scale, spread their risks, secure supplies, reduce competition (could take over a competitor), increase profit (larger size = more customers = more profit)
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What is a merger?
When 2 businesses voluntarily join together to become a new business
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What is external growth?
Doing things which expand the business that are not already part of the business
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Give an example of how a business can use external growth
Merger, take over (buy 51% of a company's shares)
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What is internal growth?
When businesses use what they already own to expand themselves
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Give an example of how a business can use internal growth
Use money to buy new factories/outlets etc
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What are economies of scale?
Savings made by the business as it grows
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What are the 5 economies of scale?
Managerial, technological, purchasing, marketing, financial
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What is the managerial EoS?
When a business can afford to employ specialist managers
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What is the financial economy of scale?
Can raise more money, faster and is less risky
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What is the technological EoS?
Large, more expensive machines are more efficient so can get more done in the same period of time
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What is the purchasing EoS?
Discounts from buying in bulk
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What is the marketing EoS?
Marketing budget is fixed, but the more that is produced, the cheaper it is per item
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Why do some businesses want to remain small?
Don't have the money to grow so can't afford new premises, managers don't have ability to manage growth, don't want to grow, don't want to lose control (sell shares), they may have a small market so not enough customers to grow
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Give 2 reasons why a business would locate locally
Easy access for deliveries, convenience (owner might live nearby), might be cheaper
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Why would a business locate nationally?
Workers are more available, EU might give grants, near transport hubs (near an airport would be good)
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Give 2 reasons why a business would locate internationally
Exchange rate (strength of the £), size of internal markets, ability to exploit local resources, taxation policies (e.g. pay less tax in Luxembourg), cheaper to employ people abroad
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What is international trade?
Making the product in one country and then selling it all around the world
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Give 2 advantages of trading internationally
Expand your market, get a good global reputation, benefit from production EoS
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Give 2 disadvantages of international trade
Language barriers, sudden changes in exchange rates, expensive to move products around the world, you have to trust an external company with delivery who may get you a bad rep
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What is a multinational company?
A business that employs people in more than one country
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Give 2 reasons why would a business become a multinational
Lots of resources abroad (e.g. metals in Africa), lower exchange rate abroad, can move their HQ to an area with low tax
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Give 2 advantages to the UK of a multinational company
Provide jobs = boost economy, will pay tax
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Give 2 disadvantages of the UK allowing a multinational company to set up
May put British businesses out of business, people may lose jobs
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Give 3 ways a multinational company can overcome the issues surrounding international trade
Joint ventures, use courts to settle disputes, use agents, build local factories where everyone employed is local
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Give 2 advantages, to a business, of being the EU
Market size (EU is biggest in the world), easy exporting because free to move between countries, easier to recruit workers because they can work anywhere in the EU,
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Give 2 disadvantages, to a business, of being in the EU
More competition, higher advertising cost because have to be printed in many languages, EU make you pay taxes and so do the UK
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How has the adoption of the euro changed governments?
They can't set exchange rates now as they are set centrally by the European Central Bank. Governments can now not control the economy
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Give 2 ways the euro has affected businesses
Price transparency (know you're getting a good price), don't need to change money as often which saves money because interest would be charged on this,
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Give 2 ways the euro has affected the consumer
Price transparency, don't need to change money when travelling within Europe
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Other cards in this set

Card 2

Front

What is a consumer durable?

Back

A tangible product that can be used by the end user over and over again

Card 3

Front

What is a single use consumer good?

Back

Preview of the front of card 3

Card 4

Front

Give an example of a single use consumer good

Back

Preview of the front of card 4

Card 5

Front

Give an example of a consumer durable

Back

Preview of the front of card 5
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