Nature of a business: Role of businesses Flashcards
what are tangibles?
Tangibles are physical products (goods) that can be handled and stored before they are sold to the consumer
eg clothing
What are intangibles?
intangibles are services, which means that they cannot be touched (not physical)
eg hairdressing
Product differentiation for goods
Goods can be differentiated in a number of different ways. Two basic ways is by colour or variation of features of a product.
Differentiation for services
(not part of epiciqw)
Like goods, services can be differentiate in a number of different ways. For example, the amount of time spent, level of expertise/knowledge, level of qualifications and level of demand.
what are the key roles of business?
profit
employment
income
choice
innovation
wealth creation
quality of life
(E P I C I Q W)
what is profit
Profit is what remains after all business expenses have been deducted from sales revenue.
what is employment
It is the state of having paid work (an agreement between an employer and an employee that the employee will provide certain services on the job, to facilitate the accomplishment of the business goals, in return for compensation (income)
what is income
Income is money received by a person for providing labour, or a business from a return on its investments
It is important as it generates a source of finance for the business and shows an indication of how successful the business is.
what is choice
Choice is the act of selecting among alternatives
- Consumers have freedom of choice and the opportunity to purchase a variety of products at competitive prices
- Most businesses usually offer a range of products as this will increase profits on the long-run
what is innovation
The development of new products, or improvements to existing products
what is wealth creation?
wealth creation:
- the more that is produced the more wealth that is generated within the Australian economy.
- it is achieved by increasing sales and developing strategies to promote brands
what is quality of life?
Quality of life refers to the overall well-being of an individual, and is a combination of both material and non-material resources
