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49 Cards in this Set
- Front
- Back
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Some individual internal idea methods |
Hobbies Skills Business experience |
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Some individual external idea generation |
Neighbours Holiday travel Education |
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Business internal idea generation |
Research and development Staff suggestions Customer feedback Intrapreneurship |
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Some business external methods of idea generation |
Market research University links Alliances Franchises competitors |
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What is market research |
Is the process of collecting and analysing information about a market for a product. Right decisions taken to meet customer needs |
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What information does market research does it sought |
Size of the market Consumer profile Competitors Market trends Consumer reaction |
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What is the importance of market research |
Identifies the target market Meets consumer needs terms of quality price features Devise marketing strategy Exploit competitors weakness Anticipate trends |
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What are the two methods of market research |
Field research going out finding info yourself Desk research info exists already assembled by others |
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Steps in the development process for a new product/service |
Stage 1: idea generation Stage 2: screening of ideas Stage 3: concept development Stage 4: feasibility study Stage 5: prototype development Stage 6: test marketing Stage 7: commercial production and product launch |
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What is a break even analysis |
For a product to break even it must earn enough money from sales revenue to cover all the costs of production. Break even is the level of production which sales revenues equal total costs |
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Reasons for starting a new business |
Challenge Own decisions Profits Secure New ideas or inventions |
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What challenges face new businesses |
Take long time and money to ready product for sale Start up finance Cash flow problems Competition Premises Right staff |
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What are the types of ownership structures |
Sole trader Partnership Private limited company Co-operative Public limited company |
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What is a long term 5+ source of finance |
Owners capital (equity) Loans/debentures Grants |
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What is some medium term finance 1-5 yrs |
Term loan Leasing Hire purchase |
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What are some short finances 0-1 yr |
Trade credit Overdraft Accrued expenses |
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What are the factors to consider when deciding a source of finance |
Cost Control Amount Purpose Collateral |
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What is managing working capital |
Refers to the assets and finance available to be used in the day to day running of the business |
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What are the methods of managing working capital |
Cash flow forecasting Credit control Liquidity ratios Stock control |
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What are the methods of production |
Job production : produced individually for specific customer eg wedding dress Batch production : producing a quantity of a product at one time then switching to another eg footwear Mass production : very large quantities of identical products continues automated process e.g cigarettes |
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What is a business plan |
The business plan sets out firms objectives and the methods and resources it will use to achieve the goal |
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What are elements of a business plan |
Nature of the business Ownership Management Marketing plan Production plan Financial plan |
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What is a marketing plan |
The process of identifying the needs of consumers and producing and selling to satisfy the needs |
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What is a marketing concept |
This requires the firm to identify the needs of consumers and then develop the product |
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What are the elements of the marketing plan |
Marketing segmentation Target markets Product portfolio Product positioning Marketing mix Niche market |
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What is the marketing mix |
Price Place Product Promotion |
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What is the product life cycle |
This illustrates how the sales of a product arise and fall over its life time |
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What are the stages in the product life cycle |
Development Introduction Growth Maturity Saturation Decline |
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What are some pricing strategies and tactics |
Penetration pricing Predatory pricing Premium pricing Price discounting Price discrimination |
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What are the factors that determine price |
Cost of production Demand for the product Pricing strategy Competitors prices |
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What are the channels of distribution |
Producer-wholesalers-retailers-consumers Producer-retailers-consumers Producer-consumers |
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What does promotion involve |
Advertising Sales promotion Public relations |
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What are some reasons for business expansion |
Gain control of new products Block competition Diversification Eliminate competition Gain control of new technology Increase market share Obtain dominant position |
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What is organic growth(internal) |
Gradual growth produced within the firm. Some or all the firms profits reinvested into the firm to ensure future growth. Achieved by increasing product sale |
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What are some methods of organic growth |
Develop new products to increase sales Increase exports Franchise |
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What is inorganic growth(external) |
achieved by joining the firm with another firm or by a take over of another firm. |
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What are some ways of inorganic growth |
Merger Take over Joint ventures Strategic alliances |
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What is a control on expansion |
The competition authority set up by government to ensure that consumers are protected by unfair practices by dominating a market |
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What are some finances for expansion |
Equity capital Debt capital Retained earnings |
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What is equity capital |
Shareholders invest money into a business by buying ordinary shares in hope of earning profit |
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What is a benefit of equity capital |
No cost for firm Finance available continuously No collateral is required |
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What are some draw backs of equity capital |
The control of the business is spread (diluted) Expectations of shareholders can be high The cost of issuing the shares is high |
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What is debt capital |
Are long term loans from banks used for expansion interest must be paid each year at agreed rates |
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What are benefits of debt capital |
Does not affect ownership and control Cost of getting a loan is low Can be used to reduce tax liability |
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What are drawbacks of debt capital |
Non repayments may lead to bank taking over or court Control over fixed assets may be lost May cause cash flow problems |
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What are retained earnings |
Profits earned by a business are kept and reinvested to expand the business |
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What are the benefits of retained earnings |
No interest Control of the firm and assets |
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What are the negatives of retained earnings |
Shareholders who want to receive cash dividend each year may be unhappy |
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Who does the effects of expansion effect |
Consumers Employees Financial structure Investors Product mix Organisational structure |
