understanding business Flashcards
what is the role of business in society?
a business is an organization that makes, buys or sells goods or provides a service.
what are businesses activity?
business activity is providing goods or services to give people what they want and need.
what’s are thing that we would like to have but we do not really need.
needs are things that we cannot live without
what is a need?
needs are things like shelter, food, clothes, water and warmth
what is a want?
wants are things we don’t need to survive but are good
these are things likes leisure, fashion, technology and luxury items
goods and services for businesses?
for a business to survive, it needs to satisfy the needs and wants of the consumer. a business can satisfy need and wants by providing goods and services to the consumer.
what is a good?
a good is a product that you can see and touch - tangible
laptops , clothes and food
what is a service?
product that you can’t hold or touch -
intangible - things like public transport, haircuts and a visit to the cinema
what is the meaning of durable and non durable
goods and services can be :
durable and long lasting
or
non durable and used up quickly!
why do businesses exist?
they exist to try and satisfy out wants
they use the factors of production to make products to provide services which satisfy these wants
what are factors of production?
CELL !
land - the natural resources used
labor - the human effort and skill needed to produce the product/ service
capital - the money needed to start up and run a business
enterprise - the person who comes up with the idea and makes it happen
what is an entrepreneur?
a person who brings together the 4 factors of production!
what are the sectors of industry?
primary (takes) - the sector that deals with extraction of raw materials or natural land resources
secondary (makes) - sector is concerned with manufacturing
tertiary (serves) - sectors that provides a service
purpose of a business plan?
to present objectives of the business
to reduce the risk of the business idea failing as the thine had been taken to carry out market research
to present to the bank when applying for a loan
what is the content of a business plan?
general details
business name
owners and type of ownership
proposed location
objectives
benefits of good customer service?
customer loyalty
improved reputation
and employee satisfaction
consequences of poor customer service?
decrease in profits
bad reputation
lord or market share
loss of competitive edge
low staff morale
how to maximizing customer satisfaction?
market research
staff training
after sales service
customer care strategy
customer complaints procedure
quality products
measuring customer satisfaction
how can use of technology improve customer service?
up to date website
call back
offering live chat support on the business website
tracking system for delivery of products
what are the sectors of economy?
private - aim to make a profit
organizations like : sole traders, partnerships and limited companies
public - ran by government and provide a service for population and communities
money for these are raised through taxes
third sector - NOT about making a profit but making a difference to society
what are the business objectives?
1 - survival
2 - growth
3 - profit maximization
4 - sales maximization
5 - provision of a service
6 - social responsibility
7 - managerial objectives
what is a stakeholder?
person or group who are interested in and can influence an organization.
for example - owners of shareholders
functional areas - marketing function
responsible for…
identifying market segments
market research
decision making based on marketing mix of a product, price, place or promotion
functional areas - human resources
responsible for…
recruitment and selection
motivation and retention
training a development
complying with employment law
functional areas - operation activities
responsible for…
production processes
quality
how products are sold
complying with consumer law
location
working with suppliers
functional areas - finance
responsible for…
identifying suitable source of finance
monitoring revenue, cost , profit
calculating the break even point
cash and cash flow
calculating average rate of return
advice on investments
what are external factors?
PESTEC
political
economic
social
technological
environmental
and competitive factors
these are all things that impact the business that is out with the businesses control
what are internal factors?
human resources - staff
finance
technology
these are factors which a business is in control of.
