Chapter 2 Flashcards
Define a business.
It is an independent institution established by an entrepreneur to make a profit by producing goods or providing services to satisfy customer needs.
What is a business establishment?
It is the place where inputs are processed to produce a product or provide a service.
What is the relationship between the enterprise and its establishment?
What is the branch industry?
It is all the businesses that produce the same product or provide the same service.
What is the production branch?
All the businesses that use the same production processes.
Study the industrial column
A course that a product takes from its unprocessed, natural state into the final form which is supplied to the customer.
The different sectors in which a business can operate.
Primary
Secondary
Tertiary
What is the primary sector responsible for?
The exploitation of natural resources in their raw, unprocessed form.
What is the secondary sector responsible for?
Processing and transforming exploited natural resources into products demanded by customers.
What is the tertiary sector responsible for?
Distributing the final products from manufacturer to customer.
What is the business environment?
It is the sum of all factors that influence the creation and growth of the business positively and negatively.
What are the characteristics of a Business Environment?
Environmental Uncertainty
Environmental Unpredictability
Environmental Complexity
Instability
Interrelatedness of environmental factors
What is the Micro Environment?
It is the sum of all the factors that happen internally in the business and are influenced by management decisions.
What are the 3 elements of the micro-environment?
The mission statement and objectives
Functions of the business
The factors of production - labour, raw materials, capital, entrepreneurship
What is the market environment?
All the factors that exist externally, that have an effect on the growthand continued existence of the business.
What is the Macro Environment?
It is all the variables outside the business that influence the growth and existence of the business.
What are the segments of the market?
Consumer
Industrial
Re-sale
International
Government
What are the variables of the market environment?
The Market
The Competition
The Suppliers of resources and services
What are some consumer rights?
Being Informed
Protection
Personal Choice
What are some some sub-environments in the macro environment?
Economic
Socio-cultural
Political
Technological
Physical
International
What is the economic environment?
Part of the Macro Environment that influences the personal disposable income of the customer. eg. inflation, income
What is the socio-cultural environment?
Part of the Macro environment that is governed by the demographics of the population and the social and cultural variables. eg. life expectancy
