Concepts Flashcards
Role of business
to produce and sell goods and services in order to satisfy the needs and wants of individuals with the aim of making a profit. They provide employment, pay taxes and improv quality of life.
Profit
what remains after revenue minus cost
employment- types (4)
full time
casual
part time
self employed
income (3)
employee- wages/salaries
business owners- profits
shareholders- dividends
wealth
increasing sales increases value of business
business generate increased wealth for community through cooperate tax
quality of life is improved through (4)
improving product quality
providing employment
environmentally friendly products
satisfying needs and wants
factors determining type of business (6)
number of employees (5, 20, 200)
ownership (independent, partner, shareholders)
legal structure (sole trader, partnership, private, public, gov)
market share (small, medium, large)
industry (primary, secondary, tertiary, quaternary, quinary)
geography (local, national, global)
influences on the business environment (10, 5)
external- economic, financial, geographic, social, legal, political, institutional, technological, competitive situation, markets
internal- products, location, resources, business culture, management
economic external influence
determined by consumer buying and spending
economic cycle shows fluctuation of consumer spending
ex.
boom- more spending
downturn- low profit low amount of g&s produced
financial external influence (2)
2 sources- debt finance, equity finance
geographical external influence (3)
location
population shifts
average age
social external influence (3)
making donations
environmentally friendly
sponsoring events
legal external influence (3)
equal pay
fair conduct
emergency evacuation
political external influence
new party policies may influence business actions
ex.
green party advocate environmental policies
institutional external influence (4)
environment protection authority
Australian taxation office
Australian securities and investment commission
NSW fair trading
technological external influence (3)
increase efficiency
create opportunities for innovating/ inveneting proudcts
may be expensive –> redundancy
product internal influence (4)
distance from supplier
distance from customer, size of customer base
training and development
maintaining quality
location (4)
visibility
cost
proximity
support services
stakeholders internal (4) and external (5)
internal- managers, employees, owner, investor
external- shareholders, govern, customers, society, environment
business life cycle stages (4)
establishment
growth
maturity
post maturity
establishment challenges (5)
generating sufficient revenue choosing suitable location developing appropriate market strategies following gov regulations positive cashflow
Growth challenges (2)
Production costs
Remanagment of
Maturity challenges (3)
Developing strategies
Motivating employees
Ensuring financial position
Postmaturity challenges (4)
Steady state
Decline
Renewal
Cessation
Features of effective management (5)
Planning
Organizing
Leading
Controlling
Skills and management (7)
Interpersonal /communications Strategic thinking Vision Problem-solving decision making Flexibility and adaptability to change Reconciling conflicting interests of stakeholders
Smart goals
Specific Measurable Achievable Realistic Time bound
Types of goals (6)
Profits Market share Growth Share price Social Environmental
Management approaches
Classical- organizing, controlling
Hierarchical organizational structure
Autocratic leadership
Behavioural- leading, motivating, communicating
Teams (decentralize power and authority)
Democratic leadership styles
Contingency approach- flexible, adaptable
Adapting to changing circumstances
Management processes (4)
Operations
Human resources
Marking
Finance
Operation (3)
Good (tangible) and services (intangible) Production process (inputs, outputs) Quality management
Human resources
Acquisition / recruitment
Develop/ training
Maintain/ non monetary and monetary benefits
Separation/ voluntary or involuntary
Marketing
Target market Marketing mix (price, product, place, promotion)
Target marketing
Mass
Niche
Finance (2, 3)
Management accounting
Financial accounting
Cash flow
Income
Balance
% of SME in business
98%
Influences in establishing an SME (3)
Personal qualities
Sources of information
Business idea
Personal qualities
Qualification Skill Motivation Entrepreneurship Cultural background Gender
Establishment options
New
Existing
Franchise
Market influences
Goods and services
Price
Location
Finance influences
Source
Cost
Legal influences (4)
Business name
Zoning
Health
Other regulations (warantees, safe products, misleading conduct)
Importance of business plan (4)
Assess strengths/ weakened
Prepare for possible challenges
Prepare for future changes
Allocate financial resources properly
Management
Achieve most effective outcome - productivity
Achieve strategic goals of a business
Trend analysis
Changes over time
Technology
Better products
Lower costs
Economic conditions
Recession and booms can influence consumer buying and spending
Business success
Make a detailed plan
Buy a franchise
partnership for support
Market research to identify opportunities
Manage cash flow
Buy an established business after investigating
Resources
Financial
Input
Staff
Competitions
Amount of competition will determine if a business can be established or not
Depends of number of competitors in maketc
