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Business Management > Understanding Business (unit 1) > Flashcards

Understanding Business (unit 1) Flashcards

1
Q

Describe and give examples of a “good”

A

Goods are Tangible. This means that they can be seen and touched. (ex. car, iphone, magazine, GHD’S)

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2
Q

Describe and give examples of a “service”

A

Services are Intangible. this means that they cannot be seen or touched after they are provided. often they are something that an organisation does for its customers. (Ex. hairdresser, teacher, bank, plumber)

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3
Q

Describe and give examples of a “durable” good

A

These goods will last a long time (ex. computer, car,toothbrush”

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4
Q

Describe and give examples of a “Non-durable” good

A

these goods and services DO NOT last a long time. they can only be used once (ex. buscuit, cinema ticket, meal)

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5
Q

Describe and give examples of a “consumer” good

A

these goods and services are consumed by private individuals to satisfy their needs and wants

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6
Q

Describe and give examples of a “capital” good

A

these goods and services are bought by businesses so that they can provide other goods and services. (ex. machinery, vehicles, tools)

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7
Q

what is a “need”

A

needs are the basic requirements for survival. (ex. food,water, shelter and clothing)

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8
Q

what is a “want”

A

wants are required to make life pleasent for us and include luxuaries and other non-essential items (ex. holidays, moblie phone, new car, PS3)

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9
Q

Explain the “role of business in society”

A

The buyers are the people who spend the money on the good or service.

the sellers are the people who offer the goods or services in exchange for money.

the consumer is the person who uses the good or service.

EX. the seller sells baby milk, the mum buys the baby milk, but the baby consumers the milk.)

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10
Q

explain opportunity cost

A

opportunity cost is when you have two options at the same time however you van only take one, the one you give up is the opportunity cost

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11
Q

what is the chain of production

A

the chain of prodution is split up into three parts INPUTS (the raw materials) PROCESSES ( processing the raw materials into managable materials) ) and OUTPUTS (making the finished product)

EX. inputs ( trees) processes (planks of wood) output (making chairs)

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12
Q

what is the creation of weath

A

when you at value at each stage of production, you make a profit and this is how you create wealth.

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13
Q

state benefits of customer service

A 
motivated and highly performing staff
satisfied and loyal customers
customers return to the organisation
customers recommend you
get a good reputation
organisation gains a competitive edge
market share increase
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14
Q

state the effects of poor customer service

A 
demotivated staff due to complaints
dissatified customers
no reccomendations
poor reputations are hard to turn around
may need to spend more money on advertising to change image
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15
Q

why do people set up their own business

A

want to be their own boss
theyve been made redundant and use their redundancy money to set up
they have an idea for a new product or service
they have a hobby which could be the basis of the new business
they have the skills but cant find a job and decide to set up on their own

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16
Q

where do people get ‘ideas’ for starting up in business

A

spotting a gap in the market

improving an exsiting product

listening to people and finding out what they want or need

using a special skill or talent that they have

developing a hobby

combing two or more exsiting products or services

setting out to slove a particular problem

17
Q

what is an entrupener

A

someone who has a business idea, or is prepared tp take up someone elses idea and develop it in order to produce a good or service

18
Q

list entrupeners skills and qualities

A 
SKILLS
selling
marketing
communtcation
ict
planning
coordination
delegating
controlling
QUALITIES
confidence
determination
enthusiasum
leadership
organised
perswader
creative
19
Q

list and describe the factors of produvtion

A

LAND
means the natural resources which businesses use. e.g. coal,diamond,forests,water,wood

LAUBOR
means the workforce of a business-human workers of all kind. e.g. employees

CAPITAL
means the tools,machinery,equipment,equipment that a business owns or controls. e.g. money, buildings, equipment, machinery

ENTERPRISE
the entrepreneur himself. enterprise means the business idea that the entrepreneur has on how to use land, labor and capital in his/her business. e.g. the idea

20
Q

what are the risks of starting a buiness

A

no one buying the product or service

losing all the money invested

not being able to pay expenses

losing personal assets

21
Q

how can a business reduce risks

A

finding out what the customer wants ie. effective market research

predicting cash flow problems and arranging suitable fiance

analysing accounts for comparison and trends using ratio analysis

producing a detailed business plan

22
Q

what does a business plan include

A 
introduction
description of the business
the product or service
the market
competion
marketing plan
operations plan
finacial information
23
Q

name and describe the sectors of industry

A

PRIMARY
they carry out the first stage of production- extracting things from nature

SECONDARY
they carry out the second stage of production- mamufactuing, building and processing.

TERTIARY
this includes selling on the finished product to the customer.- selling

24
Q

name and describe the businesses in the private sector

A

SOLE TRADER
owned and controlled by a single person

PARTNERSHIP
owned by between 2-20 partners. controlled by general partners who have a say in the running of the business

PRIVATE LIMITED COMPANY
owned by at least 2 shareholders. shareholders have to be invited to be to buy a share in the company

25
Q

state 2 advantages and disadvantages of the businesses in the private sector

A

Sole trader
ADVANTAGES
Easy to set up as no legal documents needed
Smaller size means less capital needed
Decisions are quicker to make
Personal attention given to all business matters
Profits do not need to be shared
DISADVANTAGES
Finance can be difficult to raise
Limited discounts due to small size of business
Ill-hea;th, holidays ect can affect business
Unlimited liability

partnership
ADVANTAGES
Increased  money available 
Opportunity to increase size of business
Affairs can be kept private
Risks can be spread amongst partners
DISADVANTAGES
Unlimited liability
Disagreements can occur
Profits must be shared

Private limited company
ADVANTAGES
Limited liability
Ability to sell share so may have acess to more capital
Larger so can employ specialists
DISADVANTAGES
Shares cannot be sold to the general public on the stock market
Financial information is not completely private
A limit on the amount of capital that can be raised through selling shares
More difficult to set up due to the legal requirements

26
Q

name the type of business in the public sector?

A 
LOCAL AUTHORITY (council)
owned and controlled by the local government they get their funding from the taxes we pay
27
Q

name the types of business in the third sector (voluntary)

A

CHARITY
administrated by paid officials and run by volunteers

LOCAL CLUBS
administrated by paid officals

SOCIAL ENTERPRIZES
owned by private people and run by them

28
Q

what is a franchise

A

a franchise allows a trader to use a well-known companys trade name and enbles the company to benefit from the experience of local managers

29
Q

list the aims of a business in the private sector

A 
to maximize profits
to expand and grow
to survive
to increase market share
social responsibility
30
Q

list the aims of a business in the public sector

A

be efficent
provide a quality service
be cost effective
social responsibility

31
Q

list the aims of a business in the third sector

A

maximise donations
to benefit a community
help those in need
provide sevices that would otherwise not be avalible to a community
to improve an area/community/group of people

32
Q

what is a stakeholder

A

a stakeholder is a person or group of people who have an intrest in the success of a business. they can also infulence what the business does.

33
Q

state what interest/ influence means

A

INTREST- what they want from a business

INFLUENCE- an action that will impact on what the business does

34
Q

what two categories can stakeholders be divided into

A

internal and external

35
Q

name and explain the intrests and influences of the three internal stake holders

A

OWNERS- want the business to maximize profits so they continue to receive a return on their investment- make all the desisions affectimng the business

SHAREHOLDERS- want the business to maimise profits so they continue to recive a dividend from their shares- vote at meetings to influence the desisions being made

Employees- want a wage, want good working conditions- can vary the quality of their work, can take industrial action

36
Q

name and explain the intrests and influences of the three external stake holders

A

Banks- want to make sure the business will be able to pay them back- refuse a loan, can charge the interst rate on a loan

CUSTOMERS- want the good or service purchased to be good quality, want to be treated well by the business- can decide to shop elsewhere

suppliers- want the business to continue to buy from the, want business to pay for the goods- change the price of goods, change the time it takes for goods to be delivered, change the amount of credit they give an organisation

LOCAL COMMUNITY- want the business to provide jobs in the community, want to know if the business will have a negative impact on the local area- can protest if unhappy, can complain to their member of parliament

PRESSURE GROUPS- want to know if the business will have a negative impact on the area or the environment- can protest if unhappy, can complain to their member of parliment

GOVERNMENT- want to know if the business will have an impact on the area/ country, want to know how much profit they earn to charge the correct amount of taxation- can charge the rate of taxation the business has to pay, can introduce or charge laws they have to abide by, can grant/ refuse planning permission to build a new premises

Business Management (5 decks)

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