understanding business Flashcards
roles of business in society
business provide goods and services to the public and consumers. Their job is to fill a gap in the market.
business cycle
consumers have wants/needs
business will identify the needs and wants
business produces goods and services and consumers buy these goods and services
Want definition
a want is an inessential product that enhances your lifestyle
needs defintion
a need is a product that is essentail for survival
durable goods
durable goods are goods that will last a long time without bieng used up
non durable
a good which doesn’t last long and is used up quickly
goods
a tangible product which you can see and touch
service
an intangible action which is carried out by a business in exchange for money
factors of production
Capital
Enterprise
Land
Labour
capital
all equipment needed to run a business
land definition
all the natural resources and property needed to run your business
labour defintion
the workforce needed to run your business
enterprise defintion
the business idea and USP, what makes you different from your competitors
entreprenuer
anyone who starts up a business and has spotted a gap in the market, they do lots pf planning to ensure success
skills of an entrepreneur
identifying a gap in the market risk taking communication marketing leadership financial Time management
qualities of an entrepreneur
dedication
determination
resilient
Creative
business plans defintion
a plan created to outline your business objectives, the market they will work in and your finacial goals
business plan stages
executive summary/elevator pitch business goals marketing and sales strategy financial projections Business location and setup
sectors of industry
primary, secondary and tertairy
primary sector
extracts raw materials
secondary sector
changes raw materials into a new product
tertiary sector
the sector which provides services to the public
sectors of economy
private, public and third
private sector
the sector of economy made of businesses with the goal of maximising profit and growing the business, owned by private individuals.
public sector
the sector of economy made up of businesses who are run by the government to provide a high quality service to the public
third sector of economy
the sector of economy run by trusts and volunteers who want to help out in the community and raise awareness and funds for ethical causes.
sole traders business
a business owned by one person in the private sector of economy, they get full contol over the business and get all of the profit, no legal work needed to be set up, has unlimited liability
partnership business
a business owned and controlled by 2-20 people who are in the private sector of economy, they have unlimited liability and need a deed of partnership to be set up
private limited companies
a business owned by more than one person and controlled by a board of directors, with limited liability in the private sector of economy, a memorandum and article of association are needed to be set up.
public sector organisations
a business owned and controlled by the government, they have the main goal of staying within their budget, providing a high quality service and ensuring corporate social responsibility
charities
organisations in the third sector of economy that are established to maximise donations and support ethical causes, they are owned and controlled by a trust
voluntary organisations
these arr typically small organisations that help out in the local comunity, they make no profit and are in the third sector of economy
social enterprises
businesses in the third sector of economy which behave like private limited companies except they use all their profits to grow the business and support an ethical cause of their choice, investors dont get any profit
private sector business objectives
maximise profits, to survive, to generate customer satisfaction and brand loyalty, to increase market share, to be socially responsible, to provide high quality products
limited and unlimited liability definitions
limited liability means that your personal possesions arent at risk if the business goes into debt, unlimited means the opposite
customer satisfaction defintion
how happy your customers are with the product and the business
corporate social responsibility definition
bieng ethical to boost your business reputaion
benefits of customer satisfaction
repeat business increase sales and profit increase market share increase reputation charge a higher price
customer satisfaction ensurance
high quality products, well trained staff, customer complaints proceedure and care strategies, after sale service.
how to measure customer satisfaction
online forms and surveys, market research, sales and profit statistics, number of complaints
corporate social responsibility methods
No child labour Low plastic waste Low greenhouse gas emission No mistreating of animal Helping out in the local community Employing locally Fair wages to employees
stakeholder defintion
anyone who cares about the success of a business/ wants to see it succeed
external stakeholder
banks, government, customers, local community, suppliers
internal stakeholders
owners, managers, employees, shareholders, directors,
impacts of external stakeholders
Customers and local community can boycott business.
Banks can change interest rates
Government can change tax rates
Suppliers can deliver raw materials late if unhappy/by accident.
impacts of internal stakeholders
make business decisions, take industrial action, invest in the business, increase productivity in business by working hard
external factors definition
anything outside the business that affects the success of the business
external factors
Political economic social technological envioremental competitive PESTEC
political external factors
changes in health and safety legislation,
change of corporation tax,
change of VAT,
brexit,
economic external factors
booms recessions unemployment interest rates exchange rates Tariffs
social external factors
fasion/clothing style change in healthy lifestyle life expectancy women in work Increase in online activity
technological external factors
e-commerce advancement in machinery advancement in medical research social media mobile phones wifi
competitive external factors
Competitors price changes
Competitor new product ranges
Competitors benchmarking your products
envioremental external factors
weather,
pollution,
plasic waste,
global warming
competitive factors
competitor product launches,
new competitors opening up
reduce in competitor prices
Benchmarking of products
boom and recession
where the gross domestic product of a currency will decrease/ increase meaning that more/less product is sold leading to a change in the publics disposable income.
