Bonuses. These aim to motivate staff and make
them work harder as they could achieve more
money.
Fringe benefits. These are bonuses that
could include a company car for
convenience (for example).
Non monetary
Job rotation. This is where employees
change the job that they do over a
period of time.
Employee of the month reward
schemes. These aim to motivate
employees by giving them
recognition in the workplace.
Pricing strategies
Penetration pricing
Where a product is introduced into the
market with a very low price to gain more
customer interest.
Skimming
This is the opposite to penetration pricing as it used used
when a product is initailly entering the market at a high cost to
cause a higher demand and as time progresses, the price of the
product decreases to help it become a mass-maraket product
competitive
pricing
This is where a firm
prices it's products
similarly to similar
products already on the
market
Cost-plus priceing
This is where you price your
product by working out how
much it costs to maker and
adding a percentage mark up.
Sectors
Secondary
The secondary sector manufactures goods.
Tertiary
The tertiary sector provides services such as selling goods
Primary
The primary sector produces raw materials.
Methods of production
Job
This is where the product is
manufactured once at a time and
are usually expensive and take a
long time.
Batch
Batch flow is the mixture of flow and job production
as it produces batches of products such as chocolates
in different flavours.
Flow
Flow is the method of making lots of products contunuously.
Quality management
Quality control
Spotting problems before it's too late by checking
products, raw materials and method of manufacture faults.
Total quality management (TQM)
TQM is where employees meet to discuss
the reduction in costs by cutting out waste.
Sources of finance
Retaining profits. This can be done by putting
amounts of money aside for saving towards
something better for the business such as better
machinery.
Shares. Shares can
be sold to help the
business make
money, private
limited companies
are able to sell
shares to friends
and family therefore
increasing the
amount of shares
sold and increasing
profits.
Government grant. A grant is a sum of money given
to a business from a government however the
money must be used to create jobs or help the local
community.
Business Ownership structures
Sole traders
Most small businesses are sole traders
-One owner, Unlimited liability, Work long hours,
May have to sell, possessions to pay debts
Partnerships
Partnerships are not that common;
More ideas, Less work, More capital
into the business, unlimited liability,
more disagreements / conflict
Training
On the job
training
Often taught by a colligue therefore
bad working practices can be passed
on.
It is cost effective as the
person continues to work
while training.
Off the job
training
More expensive than on
the job training but it is
usually a higher quality
Integration
Economies of scale
lead to intergration
horizontal
Horizontal integration is when
businesses are at the same stage of
production, advantages include that it
reduces the cost of production due to
economies of large-scale production. A
disadvantage would be that choice is
reduced therefore there is a reduced
product range
Backwards vertical
Where a business takes over or merges with a
supplier- and advantage would be that the
business has more control over supply but a
drawback would be that it could lead to a
reduction in the product range therefore
attracting a smaller market
Forwards vertical
Where a business takes over or
merges with a business at a higher
stage of production. An advantage
would be that it improves job
security for workers however a
disadvantage would be that it could
lead to higher prices or reduced
choice.