Understanding Business Activities Flashcards
What is the purpose of business activities?
Business activities add value and help to satisfy the needs and wants of customers.
How do business activities serve / add value to the community?
by: a. providing goods and services to the people; b. contributing to the wealth of the country / contribute to the country’s economy ; c. providing jobs for the people / creating employment / work opportunities; d. serving the interests of the community.
What are ‘needs’?
Needs are what people must have for survival / what people must have in order to continue to live. Needs are goods and services that are necessary / essential for survival.
What are ‘wants’?
Wants are what people wish to have.
Are wants necessary / needed for survival?
No. Wants are not necessary for survival.
What is the difference between a need and a want?
A need is what people must have for survival, such as food and water, while a want is what people wish to have, such as mobile phones and running shoes.
How can business activities be classified / grouped?
Into two main types: goods producing and service providing industries.
What do goods producing businesses do?
Produce / Make goods / products that can be seen and touched
How are goods produced?
With the use of machines and / or labour.
What are some examples of goods-producing businesses?
Bakery, shoe factory, tyre factory, diaper factory, mushroom farm, rubber / palm plantation, etc.
What do service-providing businesses do?
Such businesses produce services that cannot be seen or touched but can be experienced, i.e. provide experiences.
How are the services performed?
When the sellers interact (communicate with / react to) with the customers.
What must a businessman / entrepreneur make sure that he has enough to support him before he sets up a business?
Business resources
What is a resource?
A resource is a useful or valuable possession or quality of a country, organization or person. E.g. Singapore’s greatest resource is the dedication of her workers.
What are business resources?
They are the assets needed by a business to produce goods and services. Note: Our needs and wants are unlimited (endless / infinite) but our resources are limited.
How many main types of business resources are there that an entrepreneur needs in order to produce his goods and services?
Four. They are: 1. Capital, i.e.money, buildings, equipment and machinery used to manufacture and / sell the goods and services. E.g. printing machine in a printing business, microwave oven in a restaurant kitchen 2. Enterprise, i.e. the use of business resources by the entrepreneur to start and run a business by producing goods and services in order to earn profits. E.g. entrepreneur (someone who takes risks to start and run his own business) who puts in / invests money into his business, shop owner 3. Land, i.e. the factory space, shop space, natural resources (e.g. land. rivers, forests, minerals, oil, etc.) needed to produce goods and services to meet customers’ needs and wants. 4. Labour, i.e. the people involved in the production, provision and / selling of goods and services, e.g. chefs in restaurants, tour guides in tour agencies, farmers, receptionists, bus drivers, engineers, teachers, etc.
How can I remember these four main resources?
With the acronym “CELL”. Capital Enterprise Labour Land
Is the business environment always changing and competitive?
Yes.
What are the main / major factors that cause the business environment to be always changing? What are the main / major factors that can either increase or decrease the rate of business growth?
They are: 1. Political and Legal… businesses must abide to the government laws and regulations which can either help them to grow or stop them from selling their goods and services. 2. Economic… Businesses are affected by how well the economy is doing, whether many or few people are looking for jobs (i.e. the number of people finding jobs) employment / unemployment rate), as well as how fast the prices of goods and services are rising (i.e. the rate of the increasing prices of goods and services / inflation rate). 3. Sociological / Social… People’s customs and attitudes affect the types of goods and services they buy (i.e. demographic / people of different customs, attitudes, genders and age groups will desire and buy different goods and services.) 4. Technological… New technologies create new products and make improvements to existing products (i.e. products can be created and improvised by new and improved technologies.)
