Describe the advantages and disadvantages of a wide span ...



Describe the advantages and disadvantages of a wide span of control (5)

Advantages

• Staff are empowered to make their own decisions and to carry out their own tasks without interference by managers.

• Less managers are required and wages are saved.

• Less levels of communication for decisions to pass through.

• High quality staff should exist.

Disadvantages

• Managers may make snap decisions as they are looking after too many employees.

• Managers time will be at a premium.

• Managers will have less time for planning.

• Subordinates may make decisions they are not trained to make.

2008 4. Distinguish between delayering and downsizing.

• Delayering involves removing a whole level of management to flatten an organisation’s structure.

• Downsizing involves closing specific areas of the organisation to cut costs.

• Purpose.

• Span of control.

• Communication.

• Efficiency.

• Cost.

• Competitiveness.

2007 5(B)

Product endorsement is when firms pay famous people to promote their product or service. Describe the advantages and disadvantages of product endorsement. (5)

• Consumers associate products with the personality.

• Gives a good image of the organisation.

• Consumers will purchase products to be seen as the

same as the personality.

• Increases sales if the personality is successful.

• Involves very high costs to pay personalities for their

name/image.

• If personality has a problem then the product can

suffer the negative publicity.

• Organisations need to choose personalities carefully

and ensure they portray the correct image the

organisation wants to use.

Explain the advantages to an organisation of using market segmentation (4)

• Products are developed that suit a particular market segment.

• Allows price differentiation for different market segments.

• The place products are sold at will be appropriate for the particular segment.

• Advertising can be specific for certain segments.

• Promotional offers can be targeted to specific segments.

2008 4(a)

Describe the stages that take place before a new product is launched onto the market. (6)

• Generate the idea through market research.

• Analyse the idea.

• Find the appropriate finance for the new product.

• Decide if product is legal/technically possible/can be produced.

• Produce a prototype.

• Test market.

• Make any required alterations.

• Full scale production.

Advertise the product prior to launch.

2010 3 (C)

Discuss the effects of becoming part of a franchise.

(5)

• Using an established name/brand

• Reduces the risk of failure in the marketplace

• Franchiser will provide training

• Franchiser will advertise nationally

• Business idea is already successful

• Product innovation is shared

• Royalties are paid to the franchiser from profits

• Franchiser can demand exactly how a business operates

• Bad publicity can affect the whole franchise

(Invites the use of positive and negative comments but full marks can be gained by only positive or negative comments.)

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