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paper 1 - Coggle Diagram

- - - - initiative – the willingness to take responsibility, get things done and plan ahead
      - organising the business – organising business resources such as employees, money and products
      - being innovative – developing and creating new products and ideas
      - hardworking – willing to work hard in the business, often doing many tasks or working long hours
      - risk-taking – all business start-ups come with an element of risk and many people do not wish to take these risks
      - communication – entrepreneurs have to be able to talk and present their ideas to many different stakeholders, eg employees, banks, investors and customers
      - determination – entrepreneurs have to be resilient and willing to keep going in order to turn their ideas into real products for customers
      - decision making – entrepreneurs have to be decisive and make many key decisions such as where to locate their business and
    - - Income is the money an entrepreneur takes as a wage or salary. Employees in any business can earn income, but an entrepreneur may prefer to do this whilst working for themselves.
        Profit relates to any money left after all business costs have been taken away from sales revenue. A business might make a large amount of profit, meaning that an entrepreneur could make more money from their own business, than working for someone else.
      - non financial
        
        An entrepreneur may feel a level of personal satisfaction that they have created a successful business. It may be that an entrepreneur is able to make a business out of a hobby or interest.
        
        Challenge relates to an entrepreneur setting up a business with the intention that making it successful will challenge them or take them out of their comfort zone.
        
        Being your own boss enables an entrepreneur to control the business and make decisions about how it is run. These decisions may relate to what the business sells, where it buys raw materials from, and how much its product or service is sold for.
        
        Independence means an entrepreneur working for themselves and running their own business. They will also make their own key business decisions. A desire for independence is a common reason for an entrepreneur to set up a business.
  - - - Specific
        
        Measurable
        
        Agreed
        
        Realistic
        
        Timed
    - - Corporate aims - The long-term intentions of a business
      - Corporate objectives: Targets that must be achieved in order to realise the aims of the business.
      - Corporate aims and corporate objectives are used to help the business achieve what is set out in the mission statement
    - - Short Term versus Long Term objectives
      - The choice of short term or long term objectives depends on:
      - Financial position
      - Market position
      - Economic Conditions
      - Government Policy
      - Bad publicity & Social change
    - - Profit -This is the number one objective for most firms in the private sector. Profit = Total revenue – total costs. Profits can be used to reward workers and reinvest in the business so it can grow
        
        Growth - Firms may set growth or increasing their market share as an objective. If a firm wants to grow it will see a decrease in profits as it will have to incur costs to do so
        
        Social Considerations
        
        Employee Welfare
    - - These businesses use the name and logo of an existing company
      - advantages
        
        e risk of business failure is reduced by franchising.
        
        No prior experience is needed as the training received from the franchisor should ensure the franchisee establishes the skills required to operate the franchise.No prior experience is needed as the training received from the franchisor should ensure the franchisee establishes the skills required to operate the franchise.
        
        disadvanatges
        
        Costs may be higher than you expect.
        
        The franchise agreement usually includes restrictions on how you can run the business. You might not be able to make changes to suit your local market.
        
        The franchisor might go out of business.
        
        Other franchisees could give the brand a bad reputation, so the recruitment process needs to be thorough.
        
        You may find it difficult to sell your franchise - you can only sell it to someone approved by the franchisor.
  - - - The difference between trade-offs and opportunity cost is that a trade-off refers to the decision to pick an alternative, whereas an opportunity cost refers to the value of the forgone alternative. Opportunity cost refers to the value of the next best alternative of an economic decision.
    - - The transition from entrepreneur to leader involves a change of mindset. You need to make sure that you are always working “on” the business, while other employees are working “in” the business.
  - - - profit
      - satisfaction and a sense of achievement from building something new
      - being able to build a successful business
      - receiving positive customer feedback and a good reputation
      - being in control
  - - - giving up job security to open a business
      - risk of low sales
      - risk of unexpected events and rises in costs
      - financial loss
      - business failure
  - - - Managing Finances. ...
      - Inadequate Market Experience. ...
      - Human Resource Problem. ...
      - Non-strategic Planning. ...
      - Lack of Capacity. ...
      - Political Barriers. ...
      - Lack of Practical knowledge. ...
      - Not Having the Right Team.
- - - - external factors largely impact market size such as weather or the state of the economy
    - - online retailing -this distribution channel is dynamic
      - how markets change- key factor to markets changing is affluence , as income increases so does disposable income which means more products or services can be bought
      - innovation and market growth ,innovation can help business gain market share but can also spur market growth
      - adapting to change , as consumer taste change business need to be clever about adapting rather than being forced to change
    - - for most markets completion is the norm this makes it difficult to charge high prices unless customers can understand why these prices are set , this encourages companies to be more innovative
  - - - mass marketing is the attempt create products or services that have a universal appeal , mass marketing aims product at whole market
      - mass marketing-high sales-mass production-lower costs and higher profits.
    - - small segment of much larger market .identifies needs of consumers that make that niche
      - sells in low volumes so prices usually higher
      - lacks on the economies of scale required to compete on price with larger operators ,
  - - - measures the level of interest customers have in buying a product . to be effective that interest must be backed by the ability to pay
      - factors affecting demand
        
        higher the price more people who cannot pay
        
        higher the price more people will say no
        
        price gives message on its value
        
        price of other goods
        
        changes in consumer income
        
        advertising and branding
        
        demographics
        
        external shocks
      - complimentary goods -bought in conjunction with each other such as eggs and bacon
      - luxury goods- ones for which sales fall when hope are better off
      - substitution - products or services in completion with each other
      - seasonal variations- change in value of variable that is related to the seasons
    - - supply is the quantity of a product that producers are able to deliver within a specific time product
      - factors leading to change in production
        
        change in cost production
        
        new technology
        
        subsidies
        
        external shocks
      - supply chain- the hole path from suppliers of raw materials through production and storage to customers delivery
    - - the point where there is balance between supply and demand .
      - a well run business is sensitive to demand
    - - price elasticity measures the extent to which demand for a product changes when its price is changed
        
        strategies to reduce price eleasticity
        
        increase product differentiation
        
        reduce the competiton
      - %change in demand/% change in price
    - - income elasticity measures the extent to which demand changes for a product due to consumer incomes
      - %change in demand / % change in income
      - normal good is YED between 0.5 and 1.5
      - luxury good for YED is 1.5
      - inferior good is one with negative income elastciity
    - - price elastic - a product with demand that is a high price
  - - - short term marketing
        
        advantage-boosts profit in short term
        
        disadvanatge- damage firms long run in profitability
        
        examples- high prices to exploit consumer loyalty, in markets with low competition firms may be tempted to raise prices to boost revenue and profit
        
        examples- short run sales driven marketing, management may believe employees can be motivated to work if they are set targets that are bonus related (banks)
        
        advantage -can improve banks profitability in short run
        
        disadvantage- unethical marketing practises being exposed can lead to bad publicity ,fines and effect demand
    - - medium to long term plan on how to achieve objectives
      - once consumer wants have ben identified products an d services can be designed to match consumer preferences
      - POISE
        
        p-profitable. a balance between the firms need for profit and the customers need for value
        
        O-offensive, getting on the attack , leading the market and forcing competitors to be followers
        
        I-intergrated , the marketing approach must flow throw the companies
        
        S- strategic , probing analysis of the market and your competitors leading to a winning strategy
        
        E- effective - strong and siplicined teamwork in carrying through the strategy effectively
      - importance-- consumers tend to be rational and want a fair price for products, success of a firm depends on their ability to meet consumer needs . first that don't will fall behind , consesquences from loss of market share, profits,revenure
      - characteristics of effective marketing
        
        identifying target market- know w and understand your target market, why are they buying ?from using or having?
        
        focus market research e.g only interviewing those who make your target market
        
        focus advertising spending
      - key words
        
        market segmentation-diving market by customers age ,gender or income
        
        marketing mix - plan for getting right blend of product ,price promotion and place
      - b2b- business to business
        
        retailing
        
        family travel
        
        based on relationship with business buyers
        
        small and focused markets
      - b2c- business to customer
        
        examples
        
        whole sailing
        
        business travel
        
        commercial property
        
        products more important than relationships
        
        single step buying process
    - - sustainability
      - designing for waste minimisation and reuse
      - ethical sourcing
    - - advantages
        
        enables the brand to reduce money spent on promotion
        
        customers likely to purchase product again
        
        easier to persuade retailers to pu t brand in their store
        
        other products can be promoted using same brand name
      - types of branding
        
        individual brand - publicity disaster has no effect on other products
        
        brand family - adds comforting familiarity
        
        corporate brand - provide reassurance to purchase product due to credibility
      - how to build a brand
        
        timescale that matches product life cycle
        
        USP- temporary benefit as others can copy
        
        advertising-encourages customers to purchase
        
        sponsorship-long term brand building.can give brand personality
        
        use. of social media
  - - - product differentiation- the extent to which consumers perceive your brand as being different to others
- - - - staff as an asset are seen as being valuable which willl improve productivity and help them boost the company
      - seen as a cost can decrease productivity as they are not recognised , will not want to help as they just do the bare mining as not giving opportunities to prove themselves
    - - A flexible workforce is an arrangement where employees and employers adopt a unique working style other than the traditional 8 am to 5 pm
      - advantage-offers employment opportunities for greater diversity ,increased employee productivity ,promotes employee wellness
      - examples- Flexi time, job share, hybrid working
      - disadvantages -employee isolation ,communication challenges , reduced benefits
    - - dismissal-you are not meeting expectations of your job so you are fired
      - redundancy - when the role you have is no longer required or cannot be afforded .
        
        often packages involved
    - - The relationship between employers and employees can be either positive or negative and can affect the overall morale of employees. If there's a good relationship between employers and employees, it can lead to higher productivity, lower turnover rates and boosted job satisfaction rates and morale amongst employees.
      - way to improve- team building activities , regular talks , clear communication , maybe switch leadership style
  - - - With on the job training, employees receive training whilst remaining in the workplace.
        
        Demonstration / instruction - showing the trainee how to do the job
        
        Coaching - a more intensive method of training that involves a close working relationship between an experienced employee and the trainee
        
        Job rotation - where the trainee is given several jobs in succession, to gain experience of a wide range of activities (e.g. a graduate management trainee might spend periods in several different departments)
        
        Projects - employees join a project team - which gives them exposure to other parts of the business and allow them to take part in new activities. Most successful project teams are "multi-disciplinary"
      - Off-the-job training occurs when employees are taken away from their place of work to be trained.
        
        Day release (employee takes time off work to attend a local college or training centre)
        
        Distance learning / evening classes
        
        Block release courses - which may involve several weeks at a local college
        
        Sandwich courses - where the employee spends a longer period of time at college (e.g. six months) before returning to work
        
        Sponsored courses in higher education
        
        Self-study, computer-based training
    - - 1- define requirements
        
        find potentials
        
        3.hire right ppl
      - recruitment process is identifying the need for a job, defining the requirements of the position and the job holder, advertising the position and choosing the most appropriate person for the job.
  - - - clear structure make sit easier to see which parts of business do what
      - choice of structure impacts businesses work culture, ethics and beliefs
      - if business is looking to change direction structure may need attention
    - - levels of hierarchy-number of levels of supervision and manegement between shop floor and chief executive role
      - chain of command- level of communication betweenauhtority from top to bottom
      - organisational structure-the relationship between different people and functions in an organisation
      - Organisation chart- a diagram showing the lines of authority and layers of hierarchy in an organisation.
        
        Organisational hierarchy-the vertical division of authority and accountability in an organisation.
        
        Span of control- the number of subordinates a manager is required to supervise directly.
    - - A Flat structure has few layers in the hierarchy, a wide bottom and a gentle slope to the top
        
        Lots of small companies have a flat structure
        
        Traditionally an American structure
        
        Span of control is wider
        
        Less hierarchy – easier to make decisions
        
        More employee empowerment
        
        Can be cheaper as don’t have to pay expensive management salaries
        
        Tall Structures
    - - A tall structure has many layers in the hierarchy
        
        As there are many layers the chain of command is longer
        
        Managers have smaller spans of control and there is less delegation
        
        Traditional structure of European companies
        
        Clear hierarchy
        
        Smaller chains of command
        
        More control
        
        Clear communication
    - - Matrix structure is where the business is organised by task
        
        Combines a vertical chain of command with project / product teams
        
        The focus is on the task
        
        Is a more flexible structure and allows the business to be more responsive to customer needs
        
        However it can cause conflict and employees may have divided responsibilities
        
        Extra costs may be generated by duplication of support staff
    - - By function
        
        By product / activity
        
        By area
        
        By customer
        
        By process
    - - Span of control refers to the number of subordinates that can be managed effectively and efficiently by supervisors or managers in an organization.
      - importance - can impact productivity, work culture effectivness
  - - - Individuals need to meet basic needs before moving up the hierarchy
        
        Physiological - wage, salaries and working conditions
        
        Safety - security (safe job), other benefits e.g. sick pay and safe working conditions
        
        Social - team working and other functions that aim at building a bond within the workforce
        
        Esteem - positive feedback and chances for promotion
        
        Self- actualization - creating challenges and tasks that are stimulating
    - - Found that just by being studied the subjects levels of motivation increased
        
        Highlighted the importance of team work and group dynamics to motivation
        
        Applied theories of sociology to management, and in the Hawthorne Experiment found that productivity increased when working closely with management, highlighting a sociological need
        
        Workers act accordingly to sentiments and emotion
        
        If you treat workers with respect and try to meet their needs, they will be better workers for you, benefitting both management and staff
    - - motivating factors are split into two groups. Motivation is a two step process. Firstly you must meet basic hygiene factors, and from then on can motivate employees
        
        Hygiene factors - salary and security. Improving these lowers dissatisfaction but doesn't improve motivation or satisfaction. Hygiene factors remove sources of unhappiness among workers, such as decent wages, working conditions, security and safety
        
        Motivators - recognition, responsibility, work itself, achievement, advancement - these lead to increased motivation. Motivating factors can then be used to make workers happy, and feel a desire to exceed in their job, such as promotions, recognition and interesting work.
    - - He believed they should be closely monitored & told what to do
        
        He devised a piece rate system
        
        He believed workers could only be motivated by money
        
        Division of labour - jobs should be broken down into small tasks to keep employees motivated
        
        Identify most productive workers and make all staff use their methods, setting a standard for the rest of the workforce
        
        Workers should be given everything they need to complete the job to a decent standard, therefore giving no excuses for low productivity
  - - - job enrichment
        
        When employees jobs are redesigned to provide them with more challenging and complex tasks
        
        Increase in the range of tasks an individual does
        
        Workers have more responsibility for their own management
        
        Workers are able to identify and solve any problems that they encounter
        
        Gives workers training to improve skills so can meet increased job demands
      - team working
        
        Management teams
        
        Quality circle teams
        
        Production teams
        
        Teams can include:
        
        Fulfils individuals social needs which helps to increase motivation
        
        Where organisations break down production into large units where each unit is responsible for a particular area
      - employee empowerement
        
        Empowerment is the process of giving workers a greater control over their work It can make work more interesting as suits individual needs
        Needs training and time to be effective
    - - fringe benefits
        
        rewards received by employees in addition to wage
        
        company car
        
        lunch
        
        private healthcare
      - salaries and wage
        
        set contracts for you to work and in return gets aid . key motivation to work
      - profit sharing
        
        Employees receive part of the business profits
        Profits can be paid in cash / shares
        
        motivate the workers to earn the company profit as they see the financial incentive for themselves – this can raise efficiency and productivity in the organisation
  - - - Leaders set the direction and strategy for the business. Managers implement that strategy.
      - While leadership is about building a vision for people to follow, management is look
    - - managers like to make all the important decisions and closely supervise and control workers. Managers do not trust workers and simply give orders (one-way communication) that they expect to be obeyed. This approach derives from the views of Taylor as to how to motivate workers and relates to McGregor's theory X view of workers
    - - managers give more attention to the social needs and views of their workers. Managers are interested in how happy workers feel and in many ways they act as a father figure
    - - democratic style of management will put trust in employees and encourage them to make decisions. They will delegate to them the authority to do this (empowerment) and listen to their advice. This requires good two-way communication and often involves democratic discussion groups, which can offer useful suggestions and ideas. Managers must be willing to encourage leadership skills in subordinates.
- - - - a unique design that is aesthetically pleasing to the eye
      - a unique product function
    - - celebrity endorsements /sponserships,persuasive advertsing
    - - enable the business to increase prices if costs go up in order to protect profit margins(higher the product differentiation the lower the price elasticty
- - - - hard sell - employing large scales forces to go out and convince customers to buy your product
      - cutting costs and prices -if costs can be cut retail prices will also be cut without any loss of profit margin
  - - - can aim questions directly at research objectives
      - latest info from market place
      - can assess physchology of consumer
      - methods- regular surveys ,retailer research, observation
    - - expensive
      - risk of questionnaire and interview bias which will produce inaccurate results
    - - obtained without cost
      - good overview of market
      - usually based on actual sales figures
      - methods - internet ,trade press, government produced data
    - - data may not be updated reguraly
      - expensive to buy reports
  - - - method-group discussions and depth interviews
    - - limitations - wether findings are meaningful , sample size adequate enough?