Business 1 Chapter 1+2

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Business plan Segments
Personal details, Mission statements, objectives, product description, product details, staffing requirements and finance
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whats is a mission statement
states the aims of the business (v broad)
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what is the product description
market share, competitors, USP, research
3 of 55
Why use a business plan?
To achieve objectives, give to banks when needing start up finance, ensuring they achieve their aims in the most efficient, cost saving and profitable way. Helps them identify any risks.realise its a bad idea at early stage before wasting time and £
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What can cause risks and uncertainty/failure?
competitors, increased interest rates, the economy and wrong research
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8 factors of location of production
1. location of raw materials. 2.labour supply 2. transport 4. economies of scale 5.communication links 6.technology 7.location of market 8.Gov. policy
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LOP Raw materials
near to materials? lower transport costs
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LOP Labour supply
location of high unemployment? keeps wages low. nearby training centres/colleges for training?
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LOP Transport
air puts/ sea ports/ rail links for goods in and out?
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LOP Economies of scale?
similar business nearby? easy to find skilled labour/ competition? nearby suppliers and customers
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LOP Communication links
good phone, internet and postal services needed
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LOP Market
locate near to customers - cheaper and easier for them to get to the business. how near to competitors?
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LOP Gov. policy?
Gov. gives firms subsidiaries/tax breaks for moving to areas of high unemployment - cheaper labour too
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why conduct market research
find out about potential customers - needs and wants, buying habits, competitors pricing, demand
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Why is it important to decide which type of market research to conduct
is time consuming, expensive but up to date relevant and specific whereas secondary is easy to find and cheap and immediate but out of date and irrelevant
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Examples of primary research
Focus groups, questionnaires customer feedback, telephone survey
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Examples of secondary research
looking at consumption patterns data, demand trends, newspapers, magazines and internet
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Primary research : Internet
Free and quick // sources may be biased or out of date and irrelevant
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Primary research : telephone survey
cheap// nuisance
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Primary research : questionnaire
results easily analysed, fast and cheaper // leading qu, interviewer may be biased or lack detail
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Disadvantage of p research
failure to ask enough people won't represent typical views and asking a larger sample is more accurate and representative but v expensive
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Primary research : supplier feedback
gives insight to future trends // suppliers may have biased view
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Primary research : customer feedback
real insight on improving and gives customer feedback // no detail on non customers
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Primary research : Focus group
in depth behind consumer motives, attitudes and buying habits // v expensive per person and carried out in small samples=unrepresentative
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Marketing mix 4 Ps
Product, price, place and promotion
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Product
alter product to meet demand and needs = happy, loyal customers = growing business. Easier for smaller firms as its cheaper bc they work on a smaller scale BETTER TO FOCUS ON NICHE MARKETS (NEEDS AREN'T BEING MET - GOOD FOR SMALLER FIRMS)
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Price
demand will rise as prices fall, supply rises and price rises , price too low- shortage of supply but increase in customers
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Disadvantages of low price
LOW QUALITY? Some consumers are willing to pay high rices and shortage of supply
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Promotion
advertising - making consumers away to sell more and help business grow (can be expensive)
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Promotion - Local radio
Cheaper than tv - limited audience
30 of 55
Newspapers
easy to target effectively
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Magazines
target over a wide area
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Posters/billboards
visual impact, seen more daily
33 of 55
Business cards/ leaflets
cheap to produce and good to target at specific groups
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What does the location of your advertising depend on?
target audience - male/female magazine? size and location of market, sizeof budget (leaflets and cards are the most effective)
35 of 55
PLACE
For target markets and potential customers to get your product (easily available)
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better and more efficient methods to sell?
e-commerce and mail order or internet selling as it directly sells which is better for firms with lower budgets and allow them to reach a large number of people over wide areas - easy access for international markets
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Appropriate marketing mix for a smaller business: Product
niche markets and altering products to meet customer needs to increase ales and customer loyalty
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Appropriate marketing mix for a smaller business: price
equilibrium of supply and low price to attract customers and raise demand
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Appropriate marketing mix for a smaller business: place
e-commerce allows firms to reach a large number of firms over wide areas for cheap and to expand
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Appropriate marketing mix for a smaller business: promotion
billboards - long lasting and seen daily but pricier leaflets: cost effective and reach target market effectively (but ignored and thrown away)
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7 Aims and objectives
sales growth, profit rise, survival, market share, customer satisfaction,social objectives, ethical morals, environmental sustainability
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what is the purpose of using aims and objectives
tio measure success - if they are achieved that = successful business so you compare the actual targets with your performance at the end of the year
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stakeholders
managers, shareholders, suppliers, managers, bank managers, government, community, employees, customers
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stakeholder influence?
decide whether a business is successful or not by judging it on positive or negative experiences
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businesses must consider interest of of stakeholders when setting objectives: employees
Job security and promotion and decent wage and good working conditions
46 of 55
local community
no noise or pollution, provide good jobs, sustainability and ethics
47 of 55
customers
high quality low prices and customer satisfaction
48 of 55
what is market observation
look at an existing service in a different way
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what is a calculated risk
research, business plan, weigh up consequences
50 of 55
benefits of a franchise
sell a;rwady successful product, source of money, benefit from training and guidance, due to expertise of franchisor, lower failure rate, quicker way to start business,
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drawbacks of franchise
some revenue paid to franchisor, could lose franchise, lacks complete ownership,
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benefits/drawbacks franchise to the franchisor
business growth is paid by franchisee, management problems not dealt by original franchisor, franchisee may not keep to legal agreements, if franchise performs poorly it may attract bad publicity for whole business
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what is a limited liability company
separate legal identity , company in rouble not owners, must pay taxes ad publish all accounts to stakeholders
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Private limited company
limited liability, owned by shareholders, risk of takeover, more expensive to set up, must publish all accounts, more status
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Other cards in this set

Card 2

Front

whats is a mission statement

Back

states the aims of the business (v broad)

Card 3

Front

what is the product description

Back

Preview of the front of card 3

Card 4

Front

Why use a business plan?

Back

Preview of the front of card 4

Card 5

Front

What can cause risks and uncertainty/failure?

Back

Preview of the front of card 5
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