2.1 Business management Flashcards
Business
Organisation providing goods or services to customers in exchange for profit
Business management
Process of planning, organising, and controlling resources to achieve business goals.
What is a good?
tangible, physical item that can be touched, seen, stored.
Produced and sold to customers
What is a service?
intagngible, activities, time, labour, expertise.
Performed by people to meet specific needs and offer assistance.
Mixed business
A business that provides both goods and services
Main objectives of business
- making a profit
- Increase market share
- Fulfil market need
Equation for profit
Profit = Revenue - costs
Profit is how much you make - how much you spend
What is making a profit?
Maximising revenue and minimising production costs.
what is increasing market share?
porportion of sales business makes compared to total sales in industry
Sales of a business/total sales
Measured as percentage. e,g $100 in sales, company A has $25. they have market share of 25%
How do you fulfil market need?
Where ‘gap’ in market is filled.
e.g many old people and age care facilities are in demand.
Fulfilling demand
Define entrepreneurship.
Process of starting or managing new business venture, taking on financial risks for profit.
What is Innovation?
When business develops and applies new ideas to existing products
Improving pre-existing products
Different from invention!
