1.1 introduction to business management

Question 1

business

Answer 1

a decision making organisation involved in the process of using inputs to produce goods and/or provide services

Question 2

customer

Answer 2

the people or organisations that buy a product

Question 3

consumer

Answer 3

the people who actually use a product

Question 4

inputs

Answer 4

the resources that a business uses in the production process

e.g. materials, labour

Question 5

outputs

Answer 5

products

can be goods or services

Question 6

types of products - consumer goods

Answer 6

products sold to the general public rather than to other business
e.g. clothing, food, furniture

Question 7

types of products - capital/producer goods

Answer 7

physical products bought by businesses to produce other goods/services
e.g. buildings, machinery

Question 8

types of products - services

Answer 8

intangible products provided by businesses

Question 9

factors of production - land

Answer 9

natural resources used for production

e.g. wood, water, the land itself

Question 10

factors of production - labour

Answer 10

the physical or mental exertion used to produce a good or service
e.g. manual labour, an author writing a book

Question 11

factors of production - capital

Answer 11

non-natural (manufactured) resources used for production

e.g. tools, machinery, buildings

Question 12

factors of production - enterprise

Answer 12

the management, organisation and planning of the other factors of production

Question 13

business functions - human resources

Answer 13

manages the personnel of the organisation

Question 14

business functions - finance and accounts

Answer 14

manages the organisation’s money

Question 15

business functions - marketing

Answer 15

identifies and satisfies the needs and wants of customers

Question 16

business functions - operations

Answer 16

manages the process of converting raw materials and components into finished goods

Question 17

business sectors - primary

Answer 17

involved with the extraction, harvesting and conversion of natural resources

Question 18

business sectors - secondary

Answer 18

involved in the manufacturing or construction of products

Question 19

business sectors - tertiary

Answer 19

involved in providing services to the general population

Question 20

quarternary sector

Answer 20

involved in intellectual, knowledge-based activities that generate and share information

Question 21

business sectors - vertical integration

Answer 21

expansion into other sectors

guarantees reliability, keeps costs down

Question 22

business sectors - horizontal integration

Answer 22

buying competitors
reduces competition, increases market share
often limited by laws`

Question 23

entrepreneur

Answer 23

an individual who plans, organises and manages a business

Question 24

intrapreneur

Answer 24

an employee who thinks and acts like an entrepreneur but within an organisation

Question 25

reasons for starting a business - G

Answer 25

growth

capital growth in the value of assets

Question 26

reasons for starting a business - E

Answer 26

earnings

returns in the form of cash

Question 27

reasons for starting a business - T

Answer 27

transference/inheritance

passing on assets to the next generation

Question 28

reasons for starting a business - C

Answer 28

challenge

some people are driven by challenge

Question 29

reasons for starting a business - A

Answer 29

autonomy

independence, flexibility, freedom of choice in how the business is run

Question 30

reasons for starting a business - S

Answer 30

security

no risk of dismissal or redundancy

Question 31

reasons for starting a business - H

Answer 31

hobbies/passions

Question 32

barriers when starting a business - marketing

Answer 32

marketing problems, unestablished customer base

Question 33

barriers when starting a business - finance

Answer 33

limited sources of start-up capital, high production costs

Question 34

barriers when starting a business - operations

Answer 34

production problems, poor location

Question 35

barriers when starting a business - human resources

Answer 35

difficult to attract experienced staff, training, recruitment

Question 36

barriers when starting a business - external environment

Answer 36

external influences, legalities, overall risk

Question 37

factors of production

Answer 37

land, labour, capital, enterprise

Question 38

business functions

Answer 38

HR, finance, marketing, operations

Question 39

writing a business plan

Answer 39

1. overview: business name, company structure, location, mission, chart of accountability
2. message: who are your customers, how does your company help them, why should your customers choose you
3. marketing: target market, demographics, psychographics, size of target market, where you can find target customers, visibility strategy, lead generation strategy, conversion strategy
4. products: primary product, result of primary product, impact of primary product, other products
5. goals: 1 year goals, 5 year goals (e.g. number of sales, total revenue, impact, development)