The Business Management Knowledge Test explores key entrepreneurial and management styles through real-world examples. It assesses understanding of risk-taking, independence in business, leadership styles, and the motives behind major business decisions.
To develop a niche market
To reduce risk-taking
For non-ethical reasons
To work independently
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Democratic – consultative
Democratic – paternalistic
Autocratic
Laissez Faire
Administration
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Resilience
Creativity
Cautiousness
Hard working
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To work fewer hours
To increase risk taking
To become more dependent
To reduce capital to set up another business
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Democratic
Theory X
Paternalistic
Autocratic
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Resilience
Creativity
Cautiousness
Hard working
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To work fewer hours
To increase risk taking
To become more dependent
To reduce capital to set up another business
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Identify the contribution from a range of products
Reach a desired margin of safety
Identify a potential market niche
Distinguish between gross profit and operating profit
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Market mapping
Market orientation
Market segmentation
Market sampling
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Level of technology
Growth in consumer incomes
Advertising to consumers
Fashion, tastes and preferences
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It is a legal requirement for a new business
It helps to predict profits and liquidity
It can be modified once written
Usually it includes sections on finance, staffing and marketing
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A decrease in the price of oil
A decrease in the price of cars
A decrease in promotional costs of petrol retailers
A reduction in government tax charged to oil companies
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Evaluating the competition
Estimating profitability
Market mapping
Considering the competitive advantage of the product/service
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Producing Apple iPhones had become more profitable
Costs of producing iPhones had recently increased
VAT on mobile phones had increased
Prices of competitors’ mobile phones had fallen
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An increase in price
An increase in supply
A fall in demand
A fall in profits
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Many rival producers and fierce competition
Small differences in sales levels between regions
Higher sales revenues from younger consumers
Distinct types of products to meet varied preferences of consumer types
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More sales revenue
Lower start-up costs
Lower labour costs
Better quality output
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The salaries of console designers
The rate of sales tax
The supply of components for manufacturing consoles
Promotional costs of computer games console retailers
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How often do you visit a gym?
What price are you currently paying for gym membership?
What motivated you to join a gym?
How long have you been a member of a gym?
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Market mapping
High operating profit margins
Product differentiation
Word-of-mouth advertising
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In-depth interviews with open day visitors
Using market intelligence reports
Information from the University and Colleges Admissions Service
Higher Education articles in the Times Education Supplement
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Prices tend to be high
Supply tends to be low
The number of consumers tends to be low
Effective demand tends to be high
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The tax on profit
Lost earnings from employment
The risk of business failure
The cost of advertising to attract customers
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Paying the national minimum wage to employees
Paying the national minimum wage to employees
All food is cooked fresh to order
The average stay of customers is relatively short
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More installation contracts for Sky TV
More British Telecom customer contracts
An increase in the average costs of digital aerials
A decrease in income
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Customer surveys
The national census
Visits to a local business
Interviews with a marketing director
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Suppliers of shampoo
Members who live 10 miles away
Shareholders
Staff
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Determine the competitive advantage of their products or services
Understand how they can add value
Identify a potential market niche
Achieve all of the above
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Option 1
Option 2
Option 3
Option 4
Methods of adding value
Television advertising
Qualitative market research
An ethical stance
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Sales revenue increases
Advertising costs might fall
Customer loyalty increases
Producers can sell what they want
Sales revenue increases
Advertising costs might fall
Customer loyalty increases
Producers can sell what they want
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Margin of safety
Pricing strategy
Sales volume
Potential profit
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Transport cost information
Cash-flow forecasting
A knowledge of competitors’ products
Business development grants from the local council
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Samples that are too large may waste time
Samples that are too small may lead to inaccurate results
Sample methods are determined by the researcher
Sample sizes always increase with the size of the population
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Because of the weaker pound
An increase in unemployment
High levels of inflation
High interest rates
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That many farmers had replanted their wheat fields with sunflower seeds to take advantage of the explosion in demand for biofuels.
Growing prosperity, and consequent demand for meat in developing nations, which boosted the requirement for animal feed, including wheat.
Decreased costs of advertising for the SMA supermarket chain in Italy.
A reduction in EC subsidies to wheat farmers.
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Interest rates
The balance of payments
Unemployment rates
The rate of inflation
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Spending on stock decreases
Staff wages are increased
Borrowing increases
Average cost of stock increases
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Fall in cost of supplies
Reduction in real wages for its staff
Increase in exports
Increase in recruitment
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Tourists holidaying in France and Spain
Exporters who sold their products in countries using the euro
Consumers, because overall the inflation rate fell as a result
Importers, because they were able to improve their profit margins
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Selling assets
Debentures
Retained profits
Sales revenue
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A Commercial Bank
Debenture Company
Venture Capitalist
Trade Creditor
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Bank loan application
Cash-flow forecast
Bank statement
Trade-off
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Debentures
Issue of share capital
Trade credit
Commercial bank loan
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Trade credit
Venture capital
Sale of assets
An overdraft
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£900 000
£600 000
£350 000
£300 000
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The number of clients
Consumer loyalty
Profits
Production rates
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