lo8

Question 1

factors which affect business success

Answer 1

• financial factors - cash flow, profit, sales revenue
• non-financial factors - reputation, product range, size of workforce
• positive factors - large market share, reputation of quality, committed workforce
• negative factors - making a loss, bad publicity
• past factors - reputation built over previous years, state of the economy in previous years
• present factors - success of the marketing campaign, good planning and decision making
• future factors - outcome of impending legal action, changes to business aims, increase in interest rates

Question 2

what can factors be?

Answer 2

short / long term

Question 3

what is a swot analysis

Answer 3

tool used to analyse the strengths, weaknesses, opportunities and threats to a business’s current operations

Question 4

stengths and weaknesses

Answer 4

• internal factors (come from within the business)
• within control of business

Question 5

examples of strength

Answer 5

• skills of the owner
• a reputation of quality
• helpful staff

Question 6

examples of weakness

Answer 6

• inflexibility
• poor cash flow management
• high break-even point

Question 7

opportunities and threats

Answer 7

• external factors
• beyond control of the business

Question 8

examples of opportunities

Answer 8

• increasing use of mobile technology
• increasing popularity of organic food
• increase in consumers with environmental conscience

Question 9

examples of threats

Answer 9

• new competitors
• change in legislation
• increase in taxes

Question 10

what can a business do to interpret progress

Answer 10

• asking questions - are expenses too high? is the level of profit acceptable?
• comparing with organisational objectives - have growth objectives been met? has the business been enterprising
• looking for trends - is the revenue increasing over time? are profits falling? is output increasing?
• Benchmarking against industrial averages - are wastage rates higher or lower than the industrial average?
• comparing with similar businesses - does competition charge lower prices?