Bus man UNIT 1 Flashcards
Business objective
MAKE A PROFIT
- DEFINITION
- WHAT BUSINESS STURCUTRES APPLIED
-HOW USED
-HOW ACHIEVED
Generate more revenue (wages) than expenses from running a business
- All business structures
- used? - returned to owners/ shareholders or reinvested into business to enable growth of business/products
- achieved? - any strategy that can increase revenue (materials, ads, staff, quality)
Business objective
INCREASE MARKET SHARE
- Def
- What business structure
- How used?
- how achieved
Grow the proportion of sales a business within a particular industry
- All business structures
- Increase control over the marker to create customer loyalty and stability to increase profit
- achieved? = make price lower than competitor, provide a unique benefit meaning better quality or higher flexibility
Business objective
MEET SHAREHOLDER EXPECTATIONS
- Def
- What business structure
- How used?
- how achieved
provide a return on the money they have invested into the business ensuring a return of investment shareholders through dividends or shared price
- PUBLIC AND PRIVATE COMPANIES ONLY
- WHY? = attract new shareholders because seen as a strong investment and it prevents conflict btwn management and shareholders
ACHIEVED? = increase profit
WHAT IS A BUSINESS OBJECTIVE?
the goals a business INTENDS to achieve
with many businesses having multiple @ a time
WHAT ARE KEY PERFROMANCE INDICATORS?
criteria that measure how effective and efficient a business is at achieving there objectives
allowing a business to constantly review their performance by providing data that measures
What is efficiency and effectiveness in a business
EFFICIENCY is how a productively a business uses t’s resources when producing a good or services with lower the resources the higher the efficiency due to the same number of products
EFFECTIVENESS is the extent to which the business achieves it’s business objectives
Business objective
FULFIL A MARKET NEED
- Def
- What business structure
- How used?
- how achieved
conduct business activities that improve the community and environment
- ALL BUSINESS STRUCTURES
- to improve reputation which can increase sales and marker share because of the organizations purpose
- ACHIEVED? = considering social and evio impact when making decisions or supporting other organizations in your business
Business objective
FULFIL A MARKET NEED
- Def
- What business structure
- How used?
- how achieved
provide customers with a good or service that is desired and meets there expectations
- ALL BUSINESS STRUCUTRES
- Increase sales and revenue can increase profit fulfilling the gap in the market.
- ACHIEVED? = identity needs the markets not currently meeting and develop a product or service to meet that need
BUSINESS TYPE = sole trader
DEF
UNLIMITED OR LIMITED LIABILITY
CHARACTERISTICS
WEAKNESS/LIMITATIONS
STRENGTHS
WHEN SUITABLE
examples
def> is an unincorporated business structure with only one owner who also operates the business
-Unlimited liability (no protection between house and business)
- characteristics > single person/ unlimited for all business debts/ source all funding/ retains all profits
- LIMITATIONS > unlimited liability risking personal assets (House)/ difficult to get high funds from bank and owner/ high level of responsibility
- STRENGTHS > low money set up/ no government regulation/ no conflicts/ owner receives all profit
WHEN SUITBALE = small businesses that the owner works day to day
example> tradies, hairdressers
BUSINESS TYPE = partnerships
DEF
CHARACTERISTICS
WEAKNESS/LIMITATIONS
STRENGTHS
WHEN SUITABLE
examples
def> an unincorporated business structure owned by 2-20 owners
- unlimited liability
- characteristics = share responsibility/partners source all funding/divide all profits and retain/high knowledge
WEAKNESS= risk personal assets/ difficult to raise funds/ conflict
STRENGTHS = low set up cose/ low level of gov regulation/ multiple owners creates higher expertise
SUITABLE WHEN= small medium businesses
EG> law firms, dental
BUSINESS TYPE = private limited companies (Pty Ltd)
DEF
CHARACTERISTICS
WEAKNESS/LIMITATIONS
STRENGTHS
WHEN SUITABLE
examples
def. an incorporated business with at least ONE and up to 50 selected shareholders
LIMITED LIABILITY (PROTECTION)
characteristics = must be followed by Pty Ltd/ separate legal entity/ high level of control retained by shareholders/ overseen by directors
WEAKNESS> profits taxed/ cost of set up high/ gov regulations are higher
STRENGTHS > protection of shareholders/ high revenue by selling shares in organization
SUITABLE WHEN= protection of incorporation is desired but control is also desired
EG. Cotton on group/ 7 eleven
BUSINESS TYPE = Public listed companies(LTD)
DEF
CHARACTERISTICS
WEAKNESS/LIMITATIONS
STRENGTHS
WHEN SUITABLE
examples
def>incorporated business that can sell shares om an open market (ASX) to an unlimited no. of shareholders
characteristics= must follow LTD/ separate legal entity/ shares sold @ AUS securities exchange/ limited decision shareholders but receive profit though dividends/ strictest gov regulations
WEAKENSS> profits taxed twice/ set up cost highest/ gov regulation highest/ high public scrutiny/ high profit or risk of shares dropping
STRENGHTS. Protection/ high capacity to raise funds through selling shares/ prestigious profile
SUITABLE WHEN= large business move to high funds publicly
EG. coles, Qantas
What does the term “source of business opportunities” mean?
where and how the opportunity arose for them to start their business
Define what business motivations means
the reason why someone chose to start a business
what is the difference between incorporated and unincorporated business
incorporated business becomes it’ own legal entity separate from its own whereas unincorporated business is when the owner and business are viewed as one single Legal entity
Sources of business opportunity
CHANGING CUSTOMER NEEDS
>def
>characteristics
>examples
the changing of busy/technologically savvy/ demanding create business’ opportunities
Busy= wants the convivence 24/7 with supportive home services
Tec savvy= access to info/ shops online/ gives reviews and social media
Demanding = high expectations of high quality product = health and safety conscious/ high social responsibility
EXAMPLE> hello fresh( ppl becoming busy so HF provides meal kit to be delivered so ppl x go to the shops) Maccas McDelivery ( customers busier provides a convenience and them ordering reduces their time
Sources of business opportunity
ENTRPRENEURSHIP
>def
>characteristics
>examples
def> the concept of developing and managing a business venture in order to gain profit by taking SEVERAL RISKS (reputation, money, time)
characteristics = seeks out opportunities/ manages business activities/ takes calculated business risks
EXAMPLE > elon musk (tesla)
NOTE - we need entrepreneurs as we wouldn’t have products/services we have today
Sources of business opportunity
MARKET OPPORTUINITY
>def
>characteristics
>examples
Def> refers to chances to increase trade caused by the changing trend in a market. Recognising the gap
example
=increasing demand in AUS wine in China lead to aus wineries sell high wine
= no quality cafes in an area leads to a est. of a quality café increases profit
Sources of business opportunity
INNOVATION
>def
>characteristics
>examples
Def> transforming reality into a new idea about a product/service or designing a new way of doing things
characteristics= new efficient process can save time, $$ , less waste/ allow business to grow/ helps business to adapt
EXAMPLE = mobile landline to mobile phones/ cash payment to wireless/ fuel to gas
What is the difference between Business motivations and source of business opportunities
Business motivations is the reason why someone chose to start a business whereas source of business opportunities is where or how the opportunity arose for them to start their own business’
Business motivation is
the reason why someone chose to start a business
Source of business opportunities is
where or how the opportunity arose for them to start their own business’
List the business motivations
- Financial independence
- Personal independence
- Make a profit
- Fulfil a market/social need
List the source of business opportunities
- Innovation
- Entrepreneurship
- Market opportunities
- Changing customer needs
Motivation for starting a business>
Financial independence
EXPLANATION
being able to support yourself without relying on other people or jobs
Motivation for starting a business>
Personal independence
EXPLANATION
being able to make own decisions, decide your role, working hours, holidays etc
Motivation for starting a business>
Fulfill a market/social need
EXPLANATION
create a product to meet customer demand or improve on an existing product to better meet the needs of customers
Motivation for starting a business>
make a profit
EXPLANATION
to benefit financially from capitalizing on a business’ opportunity
How are KPI used in a business
allow to
1. Gathering information about current performance of the business
2. Set objectives
3. Inform and initiate change
4 Evaluate change
BENCHMARK FOR COMPARRISON
List all the KPI’s
Percentage of market share
Net Profit figures
Number of sales
Level of wastage
Rate of productivity growth
Key Performance Indicator
NUMBER OF SALES
- Def
- What it can indicate
- Business objective link to
def> total quantity of a particular product/service purchased during a DEFINED TIME PERIOD
INDICATES= the success of marketing campaigns, sales training and product innovation with the most popular and unpopular products
- Make a profit increasing revenue/ market share increase shares/ Fulfill market need/ Meet shareholder expectations with higher revenue to higher share price
Key Performance Indicator
PERCENTAGE OF MARKET SHARE
- Def
- What it can indicate
- Business objective link to
def> a representation of the portion of sales that a business has compared to the total sales for the industry or product (as a percentage)
Indicates = level of control in market place/ improved quality or price compared to competitors/ if percent of market share along side another figure can inform whether there is an increase in competitor or demand
- Increase market share/ make a profit/ shareholder expectations/ fulfill market need
Key Performance Indicator
NET PROFIT
- Def
- What it can indicate
- Business objective link to
def> net profit figures are calculated by deducting total expenses incurred from TOTAL revenues earned over a period of time
INDICATES - capacity of organization to use its resources to maximize profits to see if selling price is right
- increase profit/ meet shareholder expectations
Key Performance Indicator
RATE OF PRODUCTIVITY GROWTH
- Def
- What it can indicate
- Business objective link to
def> Compares the amount of output produced to the amount of input (resources) going into production from one defined time period to the next
INDICATES= that the org. is using resources more efficiently and using fewer inputs to obtain level of output OR more output is produced for the same input
- profit/ shareholder expectations
Key Performance Indicator
LEVEL OF WASTAGE
- Def
- What it can indicate
- Business objective link to
The amount of resources discarded by the business during the production process
INDICATES = reduction of waste means that an organization can cut costs leading to greater profit
high levels of waste can indicate a negative impact on the environment
-fulfils social need /shareholder expectations/ make profit
WHAT DOES MARCO MEAN
political, economic, legal
WHAT ARE MACRO FACTORA?
pressures that arise from outside of the business over which they have no control however are able to respond
LIST THE MACRO FACTORS
Legal and government regulations
Societal attitudes and behavior’s
Economic conditions
Technological issues
MACRO FACTORS
LEGAL AND GOVERNEMENT REGULATIONS
> impacts
> Positive
> Negative
> Impacts refers to the business related legislation based by local state federal governments made by courts that protect consumers and community = encouraging fair trade
positive impacts protects consumers the community and environment
> negative impacts heritage listed buildings/ banning imports/ building permits/ parking decreases impact people’s people won’t go out impacting the businesses profit
> example 2016 Red Cross 1/2 a million blood donors data hacked
MACRO FACTORS
SOCIETAL ATTITUDES AND BEHAVIOUR
> impacts
> Positive
> Negative
> Include external and internal customers (workers and supplies) values beliefs and customer trends. Includes what people currently think about ways of working, how businesses should operate and purchasing patterns
> positive impacts adapting to social change means businesses are constantly up-to-date and offer products in line with customers wants, needs and generating opportunities.
> Impact social changes can occur frequently leads to businesses not being able to respond quickly enough disaster in competitive industries failing the business
MACRO FACTORS
ECONOMIC CONDITIONS
> impacts
> Positive
> Negative
> Includes all things financial meaning= when planning, businesses must take into consideration insert rates, tax rates, business confidence and consumer confidence levels For example low interest rate, unemployment and inflation
> positive impacts strong economic growth means expanding customer base and increasing revenue profit greater levels of consumer confidence for the business
> Negative impacts weak economic growth leads to decrease in customer base damaging sales/ economic sanctions restrictions lead to increased costs/ high unemployment, high inflation and high interest rates all affect demand
INTERSET RATE MEANING
Amount lender charges a borrower and is a percentage of the principal
INFLATION MEANING
Higher prices decrease in purchasing power overtime the decreasing purchasing average price increases of a basket of selected goods and services
UNEMPLOYMENT
Refers to a situation where a person actively searches for employment but is unable to find work = which is seen in the economy
COMPETITORS BEHNAVIOUR EXPLAIN
> def
> example
=Can influence a business decision as if they are more suitably meeting the needs of customers which can lead to a fall in sales for companies
=If a competitor releases a new product or develops a new idea then the competitor will respond to remain competitive in the market
=example = apple airpods to samsung galaxy buds
CUSTOMER NEEDS AND EXPECTATIONS
>def
>example
A business must consider the needs and expectations of its customers and how these change overtime
If a business does not respond to the changing needs then the customers will go elsewhere decreasing the business and sales
example = increase in online shopping- business must trun to online to meet the expectations and sales
SPECIAL INTEREST GROUP
>def
>example
=Is a group of members with shared interests. They can put pressure on a business to act in line with these interests.
Examples:
-Environmental groups = promote issues of environment to the public government and business
-Business associations = organisations that support businesses through provision of training and education programs, advice or information
-Unions protect rights of workers in a particular industry
SUPPLIERS AND SUPPLY CHAIN
>def for both
=Suppliers can impact the business in a number of ways without an effective supply chain a business will fail to attract delight and hold onto the customers
=companies develop supply chains so they can decrease costs and remain competitive in the business landscape
With the network between a company and supplies to produce and distribute a specific product to a buyer trust and effectiveness is key
What is the impact on businesses due to special interest groups?
These groups generally occur when their members are unhappy with the actions by a business
TO MINIMISE this businesses should consider the views of the union and action groups when making decisions and actively engage and seek feedback from these groups to decrease conflict
What is unlimited liability
refers to the level of responsibility that the owner of a business has over it’s debts with the same legal entity with the owners assets could be seized
Dividends are…
Ways to make a profit
increase revenue/ decrease sales
Ways to increase% of market share
increasing no. stores
increasing sales and quality
more products
Ways to meet shareholder expectations
high return
dividends to make a profit
Ways to fulfill as social need
community
environment
employees
