Enterprise Flashcards
Consumer Goods
The physical and tangible goods sold to the general public - they
include durable consumer goods and non - durable consumer goods.
Example: Consumer durable good: cars and washing machines
Non - consumer durable goods: food, drinks and sweets that can only be used one
Consumer Services
The non - tangible products sold to the general public.
Example: Insurance services and hotel accommodation
Factors of Production
These are the resources needed by business to product goods or
services.
Example: Land, labour, capital and enterprise
Land
This term includes not only land itself but all the renewable and non - renewable
resources of nature.
Example: Coal, crude oil and timber
Labour
manual and skilled labour make up the workforce of the business.
Capital
This is not just the finance needed to set up a business and pay for its continuous operations but also physical goods used by industry to aid in the production of other goods and services.
Example: Machines and commercial vehicles
Enterprise
this is the driving force and provided by risk- taking individuals, that
combine the other factors of production into a unit capable of producing goods and
services. It provides a managing, decision - making and coordinating role.
Creating Value
Increasing the difference between the cost of purchasing bought - in -
materials and the price the finished goods are sold for.
Added Value
The difference between the cost of purchasing bought - in - materials
and the price the finished goods are sold for.
Example: Jewellers: well -designed shop - window display, attractive shop fittings, well -
dressed and knowledgeable shop assistants. These features might allow an increase in jewellery prices above
the additional costs involved
Opportunity Cost
The benefit of the next most desired option which is given up.
Example: If consumers choose to buy the smartphone over a pair of trainers, then the
trainers become the opportunity cost
Entrepreneur
Someone who takes the financial risk of starting and managing a new
venture.
Example: Bill Gates and Steve Jobs
Social Enterprise
A business with mainly social objectives that reinvests most its
profits into benefiting society rather than maximising returns to owners.
Example: The KASHF Foundation in Pakistan provides micro-finance (very small loans)
and social-support services to women entrepreneurs who traditionally find it very
difficult to receive help
Triple Bottom Line
Line: The three objectives of social enterprise: economic, social and
environmental.
Example:
Economic: Make a profit to reinvest back into the business and provide some return to
owners.
Social: Provide jobs or support for local, often disadvantaged communities.
Environmental: To protect the environment and to manage the business in an
environmentally sustainable way.
