Business Environments Flashcards
Private and Public Sectors
What makes up the Business World?
Private and Public Sectors
Who are the businesses owned by in the Public sector?
Government
What have the businesses in the public sector been established for?
To provide collective goods and services to the people living in the country.
What are collective goods?
AKA the ‘’infrastructure’’ of the country and examples are government hospitals and schools, municipalities, the police force (and many others).
Who are the Businesses in the public sector funded by?
By taxes the government collects.
Who establishes businesses in the private sector?
Private entrepreneurs.
What is the aim of the businesses in the private sector?
Satisfy customers’ needs and wants, while generating a profit
How must the entrepreneur fund his business?
Using his own money or borrowing.
How does a business create a competitive advantage and a loyal customer base?
By offering:
- good quality products/services
- competitive pricing
The private sector can be divided into two sectors, what are they?
- formal sector
- informal sector
What classifies the formal sector?
Businesses that pay tax and contribute to the GDP.
Where do businesses in the formal sector operate?
In fixed locations, as in shopping malls.
Do the informal businesses pay tax?
NO
What is a characteristic of an informal sector business?
- No fixed location
- No tax
- Don’t contribute to the GDP
What is Hawking?
people selling their products or services at the robots or in car parks, etc.
