Topic 1 ( Purpose Of A Business-Business Objectives) Flashcards
What is a business
An establishment that sells products/services to a customers
What are goods
Physical tangible
What are services
Intangible goods
What is B2C
Business to consumer
E.g retaling personal banking
What is B2B
Business to business
Wholesaler business travel
What is the transformation process
Adds value to inputs e.g raw materials to create outputs
What is added value
Doing something to the product that means a customer is willing to pay more
What are ways to add value
Material
Design
Limited supply
Logo
USP
What does CELL stand for
Capital
Enterprise
Land
Labour
Why is CELL important
Inputs required to start a business
What is a primary sector
Export and extract materials
Develops natural resources
What is a secondary sector
Make use of natural resources to make products
What is tertiary
Provides services needed for end users
What is cash flow
Cash coming in and out of the business
What does SMART stand for
Specific
Measurable
Achievable
Realistic time bound
What are some benefits of setting objectives(name 3)
Provides focus to managers and staff
Provides an idea of what a business is aiming for
Can be used to reward staff when targets are met
Can support an application for funding
Can be used to measure progress
How do you calculate cash flow
Inflows - outflows
What is a mission statement
A document explaining the purpose of a business
Why do businesses have a mission statement
They call it a vision statement and it defies what the organisation is and why it exists
What does a mission statement do
Can help bring focus and meaning to a business and act as a guide when making decisions
Describe goals/aims and objectives
Goals are long term
Objectives are short term
What is an objective
An objective is a goal to help the business achieve its mission
What are corporate objectives
The steps a business must take to achieve their overall mission
What are examples of corporate objectives
To make a profit
To survive
To grow
What are drawbacks of setting objectives
Too vague
Time wasting
Can be unrealistic
Can be conflicting with stakeholders and reality
