BusinessQ&A by dot point

The reasons businesses exist and the aims, mission and objectives they set, including survival, profit, growth, market share and social objectives, the role of stakeholders and their conflicting interests, and corporate social responsibility.

The purpose and content of a business plan, the distinction between risk and uncertainty, the use of opportunity cost in decision making, and the value and limitations of planning and contingency planning.

Strategies for competing and growing, including Porter's generic strategies of cost leadership, differentiation and focus, the Ansoff matrix of market penetration, market and product development and diversification, organic and inorganic growth, and the reasons firms grow or stay small.

Quantitative decision-making techniques, including decision trees and expected values, and critical path analysis to plan and schedule projects, together with the value and limitations of each technique.

The use of analytical tools to assess a firm's strategic position, including SWOT analysis, PESTLE analysis of the external environment, and Porter's five forces model of industry attractiveness, and the value and limitations of each.

Business ethics and corporate social responsibility, including the trade-off between profit and ethical behaviour, the influence of stakeholders and pressure groups, sustainability and the environment, and the impact of ethical and unethical conduct on a business.

The impact of government policy and legislation on business, including fiscal and monetary policy, employment, consumer protection, competition and environmental law, and how businesses respond to political and legal change.

The impact of the economic environment on business activity, including the economic cycle, economic growth, inflation, unemployment, interest rates and exchange rates, and how businesses respond to changes in these macroeconomic conditions.

The external environment in which businesses operate, including market structures and the level of competition, the determinants of demand and supply and how price is set in a market, and the impact of competition and market conditions on business decisions.

The importance of cash flow and the difference between cash and profit, the construction and interpretation of cash-flow forecasts, the causes of and solutions to cash-flow problems, and the purpose and use of budgets and variance analysis.

The classification of costs into fixed, variable and total, the calculation of revenue, contribution and profit, break-even analysis and the margin of safety, the construction and interpretation of break-even charts, and the value and limitations of break-even analysis.

Financial objectives including profit, cash flow, return and shareholder value, the distinction between internal and external sources of finance, short-term and long-term finance, and the factors that determine the most appropriate source for a given situation.

Investment appraisal techniques including the payback period, the average rate of return and net present value, the calculation and interpretation of each, the role of qualitative factors, and the value and limitations of investment appraisal.

The income statement and statement of financial position, the calculation and interpretation of profitability ratios (gross and operating margin, ROCE), liquidity ratios (current and acid test) and the gearing ratio, and the value and limitations of ratio analysis.

The factors a business assesses when judging a country as a market or as a production location, including market size and growth, incomes, infrastructure, costs, skills, political stability and risk, and the use of this analysis in deciding whether and how to expand.

Global marketing strategy and the adaptation of the marketing mix for international markets, the standardisation versus adaptation decision, the role of global and niche markets, and the influence of cultural and social factors on marketing.

The nature and causes of globalisation, the growth of international trade, the reasons businesses trade and expand overseas, the role of exchange rates in international trade, and the benefits and drawbacks of globalisation for businesses and stakeholders.

The reasons for foreign direct investment and the growth of multinational companies, the methods of entering overseas markets including offshoring, outsourcing and joint ventures, and the impact of multinationals on host and home countries and the control of them.

The methods and effects of protectionism including tariffs, quotas and subsidies, the role and impact of trading blocs and free-trade agreements, and how protectionism and trading blocs affect business decisions and competitiveness.

Human-resource objectives, the design of organisational structure including tall and flat structures, span of control, chain of command, centralisation and decentralisation, and the calculation and interpretation of labour productivity, labour turnover and absenteeism.

Leadership styles including autocratic, paternalistic, democratic and laissez-faire, the influence of organisational culture, and the management of employee relations including communication, trade unions, collective bargaining and the resolution of disputes.

Theories of motivation including Taylor, Maslow, Herzberg and McGregor, and the financial and non-financial methods firms use to motivate employees, including piece rate, commission, bonuses, job enrichment, empowerment and teamworking.

Workforce planning and the processes of recruitment and selection, internal and external recruitment, the methods and benefits of training including on-the-job and off-the-job training and induction, and the use and purpose of appraisal.

The growth of digital marketing including e-commerce, social media and data-driven targeting, the marketing of services, and the adaptation of the marketing mix for international markets, including the standardisation versus adaptation decision.

Market analysis through segmentation, targeting and positioning, the calculation and interpretation of market size, growth and share, the product life cycle and extension strategies, and the Boston matrix for managing a product portfolio.

The role and objectives of marketing, the difference between market and product orientation, niche and mass markets, and the methods, uses and limitations of primary and secondary market research, including sampling and the analysis of market data.

Pricing strategies including cost-plus, penetration, price skimming, competitive, psychological and loss-leader pricing, the factors that determine the choice of strategy, and price elasticity of demand and its influence on pricing decisions.

The marketing mix of product, price, place and promotion (and the extended mix for services), the importance of an integrated and coherent mix, product design and the design mix, branding and the unique selling point, and distribution channels.

The measurement and management of capacity utilisation, labour productivity and efficiency, the causes and consequences of under- and over-utilisation, economies and diseconomies of scale, and ways to improve productivity and efficiency.

Operational objectives including cost, quality, speed, dependability and flexibility, the concept of added value, and the main methods of production (job, batch, flow and cell) and the factors that determine the choice of method.

The importance of quality, the distinction between quality control and quality assurance, total quality management and quality standards, the costs and benefits of improving quality, and the consequences of poor quality.

Stock (inventory) management including buffer stock, lead time, re-order levels and the interpretation of stock control charts, just-in-time and just-in-case approaches, lean production and Kaizen, and the management of supply chains.

The impact of technology on operations including automation and computer-aided design and manufacture, the role of research and development and innovation, the difference between product and process innovation, and the benefits and risks of investing in new technology.