understanding business Flashcards

1
Q

What are the Factors of Production, and what do they refer to?

A

Land — natural resources a business uses
Labour — the workforce of a business
Capital — man-made resources a business uses to produce/provide their goods and services, e.g. machinery
Enterprise — When an entrepreneur develops an idea into a business

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2
Q

What are the Sectors of Industry, and what do they refer to?

A

Primary Sector — the extraction or exploiting of natural resources, e.g. farming
Secondary Sector — manufacturing and construction, e.g. manufacturing cars, or building bridges.
Tertiary Sector — provides services to customers, e.g. retail, banking, education.

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3
Q

What are the Sectors of the Economy, and what do they refer to?

A

Private — profit-making businesses — this includes individuals working by themselves, and large companies, e.g. tesco, childminder. They can be Sole Traders, Private Limited Companies or Partnerships.
Public — Organisations created by the government to provide a service to the public, e.g. NHS, police, fire services.
Third — Made up of charities, voluntary groups, clubs — they exist to provide a service that neither the private or public would provide, e.g. Samaritans, or the local tennis club.

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4
Q

How can a business maximise Customer Service?

A
  • Creating a culture of customer service, so that all employees understand the job they have to do.
  • Making sure their products are of good quality.
  • Providing good after-sale service.
  • Having enough fully-trained staff to help customers.
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5
Q

How can a business measure Customer Care?

A
  • Tracking the number of customer complaints.
  • Checking for issues on social media.
  • Survey customers through feedback forms.
  • Mystery shoppers.
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6
Q

Why is Customer Service so important for business success?

A

Satisfied customers will:
- give the business repeat sales
- recommend it to others
- pay a higher price
- increase the businesses reputation
- generate more sales growth
- generate more profits

Unhappy customers will:
- complain
- look for refunds
- want repairs carried out/replacements
- give the business a poor reputation

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7
Q

What are the Business Objectives of each Sector of Economy?

A

Private: Provides a service that generally requires an immediate payment by the customer, e.g. retail, hospitality.
Objectives: To maximise profit, survival, provide customer satisfaction.
Public: Organisations that are owned, operated or funded by the government, e.g. police force, fire department, schools.
Objectives: to provide a service, stick to a budget, use taxes wisely.
Third: Delivers essential services, helps to improve people’s wellbeing and contributes to economic growth.
Objectives: to help their cause, increase donations.

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8
Q

What are the main Business Objectives?

A
  • Profit
  • Provision of a service
  • Social Responsibility (e.g. being environmentally friendly)
  • Survival
  • Customer Satisfaction
  • Market Share
  • Enterprise/Innovation
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9
Q

What is a Stakeholder?

A
  • Parties who have an interest or influence in a business.
  • They have needs which the business must meet, or else there could be negatives consequences for the business.
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10
Q

What are the types of business organisations?

A
  • sole trader
  • partnership
  • private limited company
  • non-profit-making
  • social enterprises
  • local government
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11
Q

How is each type of business organisation financed?

A

Sole Trader
- invests own money
- bank loan
- borrow from family or friends

Partnership
- invests own money
- bank loan

Private Limited Company
- selling shares
- bank loan
- government grant

Non-Profit-Making
- membership fees
- donations
- bank loan
- government grant

Social Enterprise
- selling shares
- bank loan
- government grant

Local Government
- council tax
- national government funding

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12
Q

What are the External Factors effecting a business?

A
  • political
  • economic
  • social
  • technological
  • environmental
  • competition
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13
Q

What are the Internal Factors affecting a business?

A
  • finance
  • human resources
  • current technology
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