The need for business activity Flashcards
What is the Primary Sector and three examples?
Pg. 1.1
The first stage of production involving producing or extracting raw materials for other businesses to use
- Fishing
- Farming
- Mining/Quarrying
What is the Secondary Sector and three examples?
Pg. 1.1
The second stage of production involving using raw materials to manufacture products
- Car manufacturing
- Furniture manufacturing
- Electrical Appliance manufacturing
What is the Tertiary Sector and three examples?
Pg. 1.1
The third sector of business activity involving providing a service for customers
- Retailing
- Banking
- Hotels
How has the Primary Sector changed and five reasons why?
P 1.3
Decreased:
- Less important
- Fewer people employed
- Raw materials used up
- Use of machinery to replace jobs
- Foreign competition
How has the Secondary Sector changed and three reasons why?
Pg. 1.3
Decreased:
- Fall in importance (more imports/less exports)
- Use of machinery to replace jobs (quicker, no wages…)
- Foreign competition (cheaper labour, more imports)
How has the Tertiary Sector changed and three reasons why?
Pg. 1.3
Increased:
- Rise in importance
- More competition
- New jobs created (wealth/population increase, leisure)
What is a stakeholder?
Pg. 1.4
An individual or group of people who have an interest or concern in a business
Three examples of internal stakeholders:
Pg. 1.4
- Owners
- Managers
- Workers
Three examples of external stakeholders:
Pg. 1.4
- Internet and pressure groups
- Customers
- Suppliers
Owners/shareholders interest in the business as a stakeholder (two reasons):
Pg. 1.5
- High profit to gain dividends
- Business to grow, survive and make a profit
Managers interest in the business as a stakeholder (three reasons) and conflicts with another shareholder and why?
Pg. 1.5
-Business to beat competitors
-Business to be as efficient as possible
-Business to meet all objectives
Workers - higher wages/shorter hours
Manager - lower wages/shorter hours
Solution - work longer hours for more money
Most power - Managers
Workers interest in the business as a stakeholder (three reasons) and conflicts with another shareholder and why?
Pg. 1.5
-Job security
-High wages/ good working conditions
-Business to continue, grow and make a profit
Local community - wants job in other areas
Workers - secure job if business moves
Solution - secure job if business moves to other areas
Customers interest in the business as a stakeholder (three reasons) and conflicts with another shareholder and why?
Pg. 1.5
-Low prices/high quality
-Easy locations
-Choice and variety
Owners/shareholders - high prices
Customers - cheap prices/high quality
Solution - prices depending on quality/ offers/discounts
Most power - Customers
Suppliers interest in the business as a stakeholder (three reasons) and conflicts with another shareholder and why?
Pg. 1.5
-Paid on time
-Good contract with the business
-Large orders
Managers - cheapest deal (prices)
Suppliers - highest possible payment
Solution - negotiation/ bulk buying discounts
Most power - Managers
Local Community interest in the business as a stakeholder (three reasons) and conflicts with another shareholder and why?
Pg. 1.5-6
-Wants jobs
-Low noise/ pollution
-Business to contribute/ support local events
Owners - bigger shops, more customers
Local Community - low noise/pollution
Solution - Bigger shops, more jobs/ business support
Most power - Owners
Government interest in the business as a stakeholder (three reasons) and conflicts with another shareholder and why?
Pg. 1.5
-Business to help raise the economy
-Business to create jobs
-Business to pay more in taxes
Pressure groups - environmentally friendly businesses
Government - big businesses help raise the economy
Solution - support environmentally friendly businesses
Most Power - Government
Pressure groups interest in the business as a stakeholder (four reasons) and conflicts with another shareholder and why?
Pg. 1.5
-Land to be protected
-Low pollution
-Business to be environmentally friendly
-Specific interests
Owners/shareholders - more produce, more profit
Pressure groups - fair trade products
Solution - Support fair trade (advertise)
Most Power - Owners/shareholders
What is a mission statement?
Pg. 1.7
A mission statement explains the main purpose of the business and the activities it is doing to achieve this
What is an aim and three examples?
Pg. 1.8
An aim is a long term goal/purpose or intention
- Survive as a business or expand
- Make a profit
- Maximise sales
What is a private sector?
Pg. 1.8
Private sector is an organisation that is owned by someone for their own benefit, to make a profit
What is a public sector and two examples?
Pg. 1.8
Public sector is an organisation run by the Government for the benefit of society
- NHS
- Police force
What is an objective and three examples?
Pg. 1.9
An objective is a short term target you set to help you meet your aims
- Improve quality of service
- Provide more products
- Increase market share by 10%
What are SMART objectives?
Pg. 1.9
Specific - exactly what needs to be done to succeed
Measurable - to measure whether the objective is met
Achievable - something the business can achieve?
Realistic - does the business have enough resources?
Time specific - time frame of objective
What are profit objectives (two) and example?
Pg. 1.10
Main objective is profit :
- By maximizing profits, maximize gaining of money
- Gaining enough profit for future plans (satisficing)
Charities maximize funds for their cause (social enterprise)
What are growth objectives and two examples?
Pg. 1.10
Growth objective is a way to raise profits, more important to large companies which need growth to pay dividends to their shareholders (elimination of competitors)
- Sales growth - increase profit
- Increased market share - market share grow
What are survival objectives (three)?
Pg. 1.10
- New businesses need to survive to carry on
- Established business need to survive if faced with problems, e.g. recession
- Temporary, vital objective
What is providing a service objective (three)?
Pg. 1.10
- The better the service, more customers
- Customer satisfaction priority
- Good service, good reputation
What is a social enterprise?
Pg. 1.11
Social enterprises usually have aims and objectives targeted at helping people in society
Why do business objectives change over time (four)?
Pg. 1.11
- Completed objectives
- Change of interest/ownership/desire
- Competitors
- Market environment/ conditions (recession = survival)
What do business objectives depend on (two)?
Pg. 1.12
- Type/size of business
- Stage of development
What is interdependence?
Pg. 1.2
Interdependence is sectors needing one another to function
