Understanding Business Flashcards
List external stakeholders
Customers,Suppliers,local community,pressure groups,government.
list internal stakeholders
owners,shareholder,employees.
list external factors
Political economical social technological environmental competitor
list internal factors
finance, human resources, current technology, corporate culture
list the factors of production
capital
enterprise
land
labour
what is an interest
an interest is what a shareholder wants out of the business.
what is a capital item
these are a good or a service which are consumed by businesses so that they can provide other goods and services, example of this
what is creation of wealth
The whole production of a good begins with a raw material and then ends with a finished good to be sold o a customer,throughout the stages value is added.
examples of customer service
customer service is things like:
politeness to staff
the replacement of faulty goods
your reaction to any problems of complaints
the time it takes for the customer to be served
the quality of the product which is being sold
what are benefits to good customer service
satisfied and loyal customers
the business gets a good image and reputation
motivated and highly performing staff
what are the effects of bad customer service
demotivated staff due the amount of complaints
unsatisfied customers will not return
a poor reputation which is hard too turn around
what is a entrepreneur
an entrepreneur is someone who has a business idea or is ready to take someone else’s idea and develop it to produce a produce or to provide a service, an entrepreneur must be able to take risks, show initiative and be able to ‘make things happen’
what is a franchise
A franchise is a business run by one firm under the name of another. the main original business is known as the franchiser and then the owner of each of the singular branches are known as the franchisee
advantages of the franchiser
- it is a quick way to enter new geographical markets and the name of the business will become more well known without the use of too much finance to do so
- it is a low risk way of growing as the franchisee makes the majority of the investment
- will receive a percentage of all the franchisees profits on the year
disadvantages of the franchiser
- franchiser is reliant on the franchisee to keep the good image and name of the business
- only a part of the profits made will the franchiser received as the franchisee will get a percentage also
- the profits made will be dependent on the ability and quality of the franchisee
advantages of the franchisee
- the franchisee benefits from the national advertisement carried out by the franchiser
- industry knowledge and training will be provided by the franchiser saving finance for other areas
- the franchisee has the advantage of the well known brand name and back up service
- no reputation will need to be made as the business is already well known.
disadvantages of the franchiser
- a percentage of the profits have to be paid to the franchiser
- there will be high fees in the beginning of the business
- the franchiser may not renew the franchise after a certain period of time
Name the sectors of industry
- primary sector
- secondary sector
- tertiary sector
- Quaternary sector
what is the primary sector of industry
the primary sector consists of the businesses which are involved in the exploitation of natural resources, an example of this would be mining or fishing
what is the secondary sector of industry
the secondary sectors consists of businesses that are involved in the manufacturing and production by using natural resources to make them into good to be later sold. an example of this would be car manufacture or electronics
what is the tertiary sector of industry
the tertiary sector consists of businesses and organisations that are involved in providing services rather than that of goods. an example of this would
what is the Quaternary sector of industry
the quaternary sector consists of businesses which provide information and knowledge based services such as r&d which is research and development
What are the sectors of economy
- private sector
- public sector
- third sector
What is the private sector
The private sector consists of businesses that aim to primarily maximise their profits and example would be McDonalds or McPherson’s
What is the public sector
The public sector consists of government owned organisations which aim to provide a service to a community, an example would be schools and hospitals
what is the third sector
The third sector consists of organisations that have been set up to provide goods or services to benefit others, an example of this would be charities o social enterprises
Name types of private sector businesses
Private limited companies
Public limited companies
Franchise
Multinationals
What is a LTD and its features
Private limited company gains there name from having limited liability, this means that if the business was to go bankrupt then the owner wouldn’t have to sell their personal possessions. The owners of these companies are called shareholders as they own shares in the business. The shares of these types of companies are not available to the public and shares are only sold to people the owners know, like employees for example. These companies are run by a board of directors. These business must also have complex documents called the memorandum of association and the articles of association which outline the rules set for the business
What are the advantages of an ltd
- owners have limited liability
- ownership of the business cannot be lost to outsiders
What are the disadvantages of an ltd
- the profits have to be shared out between shareholders based on there amount of shares
- there are complicated and complex legal procedures to be done when setting up
- there is a limited source of capital as shares cant be sold publicly
What are plcs and their features
Public limited companies are the same as ltds with regards to most features apart from unlike peristyle limited companies plcs can sell there shares publicly
Advantages of a plc
- shareholders have limited liability
- large amounts of finance can be raised from the selling of shares
- easier to borrow money from banks as they are deemed as being less risky for banks
- plcs can find it easy to dominate the market
What are the disadvantages of plcs
- profits must be shared between many shareholders
- it can be costly and complicated to set up
- control of the business can be easily lost due to anyone having the ability to buy shares in the business
Name company objectives
- maximising profits
- survival
- satisficing
- provide a quality service
- increase in market shares
- sales maximisation
- corporate social responsibility
What are the objectives of private sectors companies
- to maximise profits
- to increase market shares
- to maximise sales
- to survive
- to provide a high quality product or service
What are the objectives of a public sector organisation
-to offer a high quality service
