1.1 Nature + purpose Of Businesses

Question 1

Mission statement

Answer 1

Document explaining the purpose of a business

Question 2

Corporate objectives

Answer 2

The steps taken to achieve the mission statement of a business

Question 3

3 Business objectives

Answer 3

To survive
To grow
To make profit

Question 4

What does CSR stand for

Answer 4

Corporate social responsibility

Question 5

What does SMART stand for (in terms of objectives)

Answer 5

Specific, measurable, achievable, realistic , time bound

Question 6

Benefits of setting objectives

Answer 6

-idea of what business aiming for
-focus point for managers and staff
- support an application for funding
-reward staff when targets met

Question 7

Drawbacks of setting objectives

Answer 7

-Too much pressure is demotivating
-can be ambiguous or confusing
-takes time and resources
-can cause conflict
-can cause loss of opportunity

Question 8

Define a business

Answer 8

An organisation that exists to provide goods and services to customers

Question 9

Are services tangible or intangible

Answer 9

Intangible

Question 10

Are goods intangible or tangible products

Answer 10

Tangible

Question 11

Define customer

Answer 11

Someone who pays for a good or service

Question 12

Define entrepreneurs

Answer 12

Somebody who sees an opportunity and creates a business

Question 13

B2C examples (business to consumer)

Answer 13

Retailing , personal banking

Question 14

Benefits of B2C

Answer 14

Charge higher prices and
higher profitability per unit

Question 15

Examples of B2B (business to business)

Answer 15

Wholesaling
Business banking

Question 16

Benefits of B2B

Answer 16

Builds relationship with business customer
Bulk buying and selling
Larger audience (eg. School vs pupil)
Expansion of customer breadth

Question 17

Define added value

Answer 17

Doing something to a product that means the customer is willing to pay more

Question 18

Ways to add value (8)

Answer 18

-Ethically sourced
-USP
-branding
-logo
-quality
-convenience
-marketing
-exclusive

Question 19

Primary sector

Answer 19

Business that extracts or exploits raw materials eg. Oil , farmers

Question 20

Secondary sector

Answer 20

Business that manufactured goods

Question 21

Tertiary sector

Answer 21

Business that provides a service

Question 22

Variable costs

Answer 22

Costs that change with output (eg. Cost spent to make product)

Question 23

Fixed costs

Answer 23

Costs that don’t change with output (eg. Rent)

Question 24

Total costs

Answer 24

Fixed costs + variable costs

Question 25

Revenue

Answer 25

Units sold x cost of unit

Question 26

Profit

Answer 26

Revenue - total costs

Question 27

Profit

Answer 27

Revenue - total costs

Question 28

Short-termism

Answer 28

Decisions that make short term profit , not long term

Question 29

Profit satisficing

Answer 29

Making enough to keep shareholders comfortable

Question 30

Economies of scale

Answer 30

The cost of a unit falls as the quantity produced or purchased increases. This is as a result of bulk buying