Flashcards · 7100 · Topic 2

Commercial operations flashcards

32 cards on Topic 2, subtopics 2.1 to 2.6. Pick a subtopic or study them all.

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Private sector vs public sector: Private sector: owned by individuals or shareholders, usually aiming for profit. Public sector: owned and run by the government, usually aiming to provide a service.
What is unlimited liability, and which owners have it?: The owners are personally responsible for all the business’s debts, so their own possessions can be taken. Sole traders and partners in an ordinary partnership have it.
Why might a sole trader become a private limited company?: To gain limited liability and raise more capital by selling shares privately, at the cost of registration and sharing control.
Why does a public limited company find it easier to raise capital?: It can sell shares to the general public, usually on a stock exchange. In return it must publish its accounts and may face takeover.
Why do public corporations exist?: To provide essential services that might be under-supplied by private firms, or to keep strategic industries under government control.
Give three features of a multinational company: Headquarters in one country, operations in one or more other countries, and large scale with access to big markets and capital.
Which location factors matter most for an e-commerce business?: Wi-fi and connectivity, warehousing, access to technology specialists, and logistics for delivery.

Define outsourcing: Using another business to carry out work, such as production or distribution, instead of doing it in-house.
Which two areas have driven the growth of outsourcing?: Contract manufacturing (another firm produces the goods) and contract logistics (another firm stores and distributes them).
Give two benefits of outsourcing for a business: Lower costs and access to specialist skills, which free money and managers’ time for the core business.
Give two drawbacks of outsourcing for a business: Less control over quality and delivery times, and the risk that a supplier’s poor practice damages the business’s reputation.

Name types of retailer: Itinerant retailers, vending machines, independent retailers, street markets, speciality shops, online retailers, multiple chain stores, supermarkets, hypermarkets and department stores.
Supermarket vs hypermarket vs department store: Supermarket: large self-service store, mainly food and household goods. Hypermarket: very large store, often out of town, selling a very wide range. Department store: many departments under one roof, each selling a different type of good.
Give three reasons small-scale retailers survive: Personal service, flexible opening hours and additional services, such as delivery or informal credit for regular customers.
Name retail selling techniques: Branding and own brands, logos and packaging, self-service, after-sales service, barcoding, direct mail, loyalty programmes, informal credit and cash on delivery.
How has e-commerce affected traditional retailing?: Positives: selling 24/7, more customers, more revenue, targeted marketing, lower store costs. Negatives: delivery, training and warehousing costs, and website maintenance.
What is EPoS?: Electronic point of sale: tills that scan barcodes, record each sale and update stock records automatically.

What is breaking bulk?: A wholesaler buying large quantities from manufacturers and selling them in smaller quantities to retailers, so retailers need not tie up capital in big orders.
Why is the wholesaler important to the manufacturer?: The manufacturer sells in bulk to a few buyers, saves on storage, passes on the risk of unsold goods, and receives information about what consumers want.
Why is the wholesaler important to the retailer?: The retailer can buy small quantities of many goods from one place, may receive credit and delivery, and gets advice on new products.
Why do supermarkets often bypass wholesalers?: They are large enough to buy in bulk straight from manufacturers and run their own warehouses, so they keep the wholesaler’s profit margin themselves.
What is a cash-and-carry wholesaler?: A self-service warehouse where retailers choose goods, pay cash at once and transport the goods themselves, in return for lower prices.

Which document does a seller send in reply to an enquiry?: A quotation, giving prices, terms of payment and delivery details.
Which document shows the amount a buyer must pay for goods supplied?: The invoice.
Which document travels with the goods and is signed on arrival?: The delivery note, which the buyer signs to confirm that the goods were received.
Goods arrive damaged and are returned. Which document reduces what the buyer owes?: A credit note.
What is a statement of account?: A summary of the transactions between buyer and seller over a period, such as a month, showing the balance still owed.
Which documents are used when exporting goods?: A certificate of origin, a bill of lading for sea freight or an air waybill for air freight, and often a documentary credit (letter of credit) to guarantee payment.

Name modern methods of business communication: Email, websites, social media, web-based chat including chatbots, video conferencing, mobile messaging, and posters or other printed methods.
Which factors should guide the choice of communication method?: Urgency, cost, security, distance, availability of networks and the importance of the message.
Why might a business use a chatbot on its website?: It answers common customer questions instantly at any time, at low cost, though it may not handle complex or unusual queries.
Which communication method suits a confidential contract that must arrive tomorrow?: A secure method that gives proof of delivery, such as an encrypted email with an electronic signature or a courier, because security and urgency both matter.