Introduction to business - Enterprise Flashcards
enterprise
what are the two meanings of enterprise?
- another word for business
- the actions of a risk taker starting their business
what makes a ‘risk-taker’?
- shows initiative to exploit a business opportunity
- makes an investment to set up the business
- goes ahead, despite the risks when starting a business
characteristics of a good entrepreneur
- motivated
- determined
- hard-working
- leader
- creative
- enthusiastic
- confident
- persistent
what are the risks to an entrepreneur when starting a business?
- financial loss
- strained relationships
- competitors
- business plan may not be realistic
- may not be a demand for the product
- resource availability
what is an opportunity cost?
an option that is not chosen (it is the cost of the next best alternative)
what are some economic and competitive uncertainties?
laws, minimum wages, interest rates
what are some rewards of being an entrepreneur?
money, satisfaction, reward
what are the positive impacts of entrepreneurial activities on the economy?
- creates jobs –> tax
- GDP increases
- competition
how is competition good for the economy?
companies then need to innovate their product and potentially find ways to lower their prices –> good for customers –> more sales –> more profit –> more GDP
how can competition be bad for the economy?
if the business fails then the government will get less tax and the GDP will be lower
what are the factors of production?
land, labour, capital, enterprise
what is the land section of production?
natural resources available for production e.g. coal
in its natural state
what is the labour section of production?
the human input into production process
a business needs an abundance of skilled labour to be effective
what is the capital section of production?
goods used in the supply of other products
e.g. machinery makes it more efficient and productive
what is the enterprise section of production?
entrepreneurs organise factors of production and take risks
countries with more risk-takers thrive more and have a higher GDP
how can a business add value to a product?
- aesthetically pleasing
- good service
- good quality
- customer convenience
- brand reputation
what are the benefits of adding value to a product?
- charge premium price
- gives company a competitive advantage
- meets needs of target market
- protecting from competitors
what are the 6 functions in a business?
- accounting and finance
- operations management
- marketing
- human resource management
- customer service
- sales team
what is ‘a constraint’ on a business?
a limiting factor on the business
what are some examples of constraints on a business?
- limited supply of skilled workers
- economy in decline
- recession
- less disposable income
- not enough finance
- environmental factors
- competitors
what is a stakeholder?
is any individual or organisation who have an interest in the activities and decision making of the business
name some stakeholders
owners, shareholders, managers, employees, government, customers, suppliers, creditors, environmental groups, local community
what are shareholders/owners interested in (as stakeholders)
- profit
- retaining employees
- keeping customers
- return on investment
what are managers+employees interested in (as stakeholders)
- customer satisfaction
- making sales
- good wage/salary
- good working conditions
- good job security
- promotion opportunities
what are customers interested in (as stakeholders)
- good quality
- lowest price
- good after and before customer service
