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business > buisness activity and influences on business > Flashcards

buisness activity and influences on business Flashcards

1
Q

Premises

A

buildings and land used by a shop or business

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2
Q

Services

A

non-physical products such as banking and car washing

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3
Q

Goods

A

physical products such as mobile phones or a pair of shoes

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4
Q

Consumer goods

A

goods and services sold to ordinary people rather than businesses

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5
Q

Producer goods

A

goods and services produced by one business for another

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6
Q

Needs

A

basic requirements for human survival

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7
Q

Wants

A

peoples desires for goods and services.

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8
Q

Private enterprise

A

owned by individuals or groups of individuals. Their aim is to make
profit

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9
Q

Public enterprise

A

these are owned by the government.

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10
Q

Social enterprise

A

these are non-profit making. For example charities.

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11
Q

Stakeholder

A

an individual or group with an interest in the operation of a business.

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12
Q

Objectives

A

goals set by a business to achieve their aims

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13
Q

aims

A

what a business wants to achieve

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14
Q

Revenue

A

money from the sale of goods and services.

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15
Q

Diversify

A

if a business diversifies, it increases the range of goods or services it
produces

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16
Q

Financial objectives

A
  • The survival of a business.
  • Making profit.
  • Sales.
  • Increase market share
  • Financial security
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17
Q

Non-financial objectives

A
  • Increasing rates of recycling.
  • Improve the quality of education.
  • Personal satisfaction.
  • Challenge.
  • Independence and control.
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18
Q

Innovator

A

someone who introduces changes and new ideas.

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19
Q

labour

A

people employed in a business or used in production

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20
Q

Limited liability

A

business owner is only liable for the original amount of money
invested in the business.

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21
Q

Unincorporated businessess

A

There is no legal distinction between the owner and the business.
Everything is carried out in the name of the owner. (Small)

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22
Q

Incorporated businesses

A

has a separate identity from that of its owners. (Limited companies)

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23
Q

Sole trader

A

business owned by a single person.

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24
Q

Sole trader advantages

A

The owner keeps all the profit.
Independent.
Simple to set up with no legal
requirements.
Flexibility.

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25
Q

Sole trader disadvantages

A

Unlimited liability.
Struggle to raise finance.
Long hours and hard work.
No continuity.

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26
Q

Partnerships

A

business owned by between 2 and 20 people.

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27
Q

Partnership advantages

A

No legal formalities.
Job is shared.
More capital raised with more owners.
Financial information not published

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28
Q

Partnership disadvantages

A

Unlimited liability.
Profit is shared.
Partners may disagree.
(Small)

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29
Q

Franchise

A

structure in which a business (franchisor) allows another operator (franchisee) to trade under their name

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30
Q

Co-operatives

A

businesses which have important objectives other than making profit. They aim to support the wider community.

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31
Q

Worker cooperatives

A

owned by their employees

32
Q

Consumer cooperatives

A

owned by their customers.

33
Q

Dividend

A

a share of profit

34
Q

Market share

A

the percentage of an industry or markets total sales that it earned by
a particular company over a specified time period

35
Q

Multinational

A

large business with significant production or service operations in at least 2 different countries

36
Q

Limited companies

A

business organizations that have a separate legal identity from
that of their owners

37
Q

Private Limited Company (Ltd)
Advantages

A
  • Limited liability
  • More capital raised
  • Business continues if shareholder dies.
38
Q

Private Limited Company (Ltd)
Disadvantages

A
  • Financial information has to be made public.
  • Costs money and takes time to set up
  • Profit is shared
  • Takes time to transfer shares to a new owner
39
Q

Public Limited Company (PLC)
Advantages

A
  • Large amount of capital raised.
  • Limited liability
  • Can exploit economies of scale.
  • Dominate the market
  • Very high profile in the media.
40
Q

Public Limited Company (PLC)
Disadvantages

A
  • Setting up costs are very expensive.
  • More financial information has to be made public.
  • Managers may take control rather than the owners.
41
Q

Public corporations

A

business organisations owned and controlled by the government.

42
Q

Privatisation

A

the transfer of public sector resources to the business private sector

43
Q

Features of public corporations

A
  • State owned
  • Created by law: they are created by an act of parliament.
  • Incorporation: they have a separate legal identity.
  • State-funded: the government provides the capital needed by public corporations.
    This money comes from taxes.
  • Provide public services: most public corporations do not aim to make profit.
    (Schools and hospitals).
  • Public accountability: collecting tax.
44
Q

Interdependent

A

rely on each other.

45
Q

Factors influencing business location

A
  • Proximity to the market.
  • Proximity to labour.
  • Proximity to materials.
  • Proximity to competitors.
  • History and tradition.
  • Cost of premises.
46
Q

Legislation

A

laws a business has to follow.

47
Q

Local location:

A
  • home based businesses
  • Internet: some online businesses have a website
  • Legislation: laws a business has to follow.
  • Changing factors in costs: for example rent may increase or employees may ask for
    more money.
  • New markets: when businesses start to offer new customers, their products and
    services
48
Q

International location

A
  • Multinational businesses: sell goods and services around the world.
  • Trade barriers: when countries block or charge money for you to operate in their
    countries.
  • Financial incentives: when businesses offer money to countries to locate in their
    country.
  • Cost of labour: cheaper for businesses to pay low wage in poorer countries.
  • Proximity to markets and suppliers: getting suppliers from china.
  • Political stability
  • Language barriers
49
Q

Globalisation

A

when businesses operate in more than one country around the world. They have factories and outlets in these countries

50
Q

MNE

A

Multinational Enterprise.

51
Q

Ventures

A

new business activity that involves taking risks.

52
Q

Exploitation

A

treating someone unfairly by asking them to do something for you
and you give them very little in return.

53
Q

MNC

A

Multinational corporations

54
Q

Enterprise

A

the activity of starting and running a business

55
Q

Multinationals

A

Have a head office in one country but operate from many different countries with factories around the world

56
Q

Multinationals Advantages

A

Jobs are provided.
An injection to the local economy that it enters.
Training and education is provided for employees.
MNE’s will pay tax in that country.
Helps the world’s knowledge and
understanding of other countries.

57
Q

Multinationals disadvantages

A

High wage jobs aren’t given to locals.
Charge low prices as a large business, pushing smaller local competition out.
Can influence government’s decisions with regards to grants, tax and land.

58
Q

Imports

A

goods and services bought from overseas

59
Q

exports

A

goods and services sold overseas

60
Q

Economy

A

how developed a country is and how much money it has

61
Q

Fiscal policy

A

using changes in taxation and government expenditure to manage the economy.

62
Q

Staff lay off

A

make employees redundant

63
Q

Legal framework

A

law that businesses have to follow

64
Q

Monetary policy

A

laid down by central bank. It involves management of money
supply and interest rate

65
Q

Direct taxes

A

charges people on their income

66
Q

Indirect taxes

A

they are levied on spending.

67
Q

taxes

A

The money raised from taxation is used by a government to help fund it’s spending on public services. Businesses and individuals pay taxes.

68
Q

What is happening outside a business that affects it. (STEP)
S

A

Social factors: things that affect people like fashion and changes in society.
- Better economy
- More jobs
- Better developed
- More facilities

69
Q

What is happening outside a business that affects it. (STEP)
T

A

Technological factors: as technology improves and changes, the economy
advances.

70
Q

What is happening outside a business that affects it. (STEP)
E

A

Environmental factors: as economies grow, environmental damage increases.
Sustainable development- whatever you use, you have to replace.

71
Q

What is happening outside a business that affects it. (STEP)
P

A

Political factors: government makes laws and regulations that all businesses should follow.

72
Q

Revenue

A

money made from sales.

73
Q

Monopoly

A

when one business only provides a certain product. It controls the
market and owns all the market share

74
Q

Measures of success

A
  • Revenue
  • Market share
  • Customer satisfaction
  • Profit
  • Growth
  • Shareholder satisfaction
  • Employee satisfaction
75
Q

inventory

A

stocks of goods

76
Q

Cash flow problems

A
  • Overtrading
  • Investing too much in fixed assets
  • Allowing too much credit
  • Over-borrowing
  • Seasonal factors
  • Unexpected expenditure
  • External factors
  • Poor financial management
77
Q

Reasons for business failure

A
  • New entrants
  • Ineffective marketing
  • Lack of business skills
  • Poor leadership

business (2 decks)

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