Unit 1 Flashcards
What is Scarcity?
Unlimited wants + Limited resources = scarcity
What are the Factor’s of Production?
Land (All natural resources such as minerals, ores, fields, oil and forests)
Labour (The number of people avadable to work)
Capital (Macheniry, equipment and finance needed for production of goods and services)
Enterprise (People prepared to take the risk of setting up businesses, they are known as entrepreneurs, an example is elon musk)
What is the Opppertunity Cost?
The opportunity cost would be spending your savings/inheritance to buy stock and land and gain money back.
What is Specialisation?
Specialisation is where companies focus on one main product that they are known and famous for and will not have many different products. An example is tesla, how they only sell cars.
What is an advantage to Specialisation?
Using a specialist company can be an advantage as the workers there may know more about the product then John Lewis workers who wont be likely to know a huge amount about a certain product. Another advantage is that when you go to a specialist store, you will come out with the product that you need and not get distracted.
Specialisation helps a company increase its profit as since customers are used to having the same product, when a new version comes out the public will be more likely to buy it and be more exited than when a non specialist company introduces a new product.
What are ways of adding value?
Ways of Adding Value
Branding: Advertising reminds people of their products fresh in their mind which means that they will visit these stores again. The image/colour scheme can be immediately tracked back to the brand which gives it an identity. If a company is more famous from branding, they can increase their price.
Excellent Service Quality: People come to find that personalised service increases the value. People will then feel more comfortable spending their money with this brand after feeling special. An example of this is the price of a tailored suit will be more expensive then a ready made suit.
Product Features: Products that have more features than similar products will allow a higher price. The mobile phone markert and disney plus (having different products and shows on one service) is an example of this.
Convenience: Consumers will pay a higher price for saving time and getting the products faster and they can have immediatily, like ready meals and amazon prime.
What is the Primary Sector?
The first stage of production involving the etraction of raw materials.
Some examples are Logging, Coal Mining, Farming
What is the Secondary Sector?
The second stage of production where the raw materials are manufactured into finished products
Some examples are steel being made into car doors, fish being made into fish fingers, glass being made into doors
What is the Tertiary Sector?
The third stage of production, where a service is provided for the consumer
Some examples are teaching, accountant, running a cinema
Business Plan: Executive Summary?
Exectutive Summary is useful as this is the hindsight that people will get from your business idea. This is the base layer and where the idea starts This helps the investor see the main point of the business and wether the creator is serious or not about their business.
Business Plan: Business Details?
Business Details are useful because your answers are right infront of you and this helps you plan out how your business will work (how will this location benefit you), the key people are useful because they are the ones who built this business and the people in power. This will help convince the investor that his money will not be going to waste and this shows the investor how his money is being used.
Business Plan: Marketing and Sales?
Marketing and Sales are useful as this can bring a creative person on board for marketing and this is how your company’s popularinty will be led. This helps the investor see how the company is going to be advertised and how his investment is going to grow, if the plan is not good then the investor will realise that his money will be taken nowhere.
Business Plan: Sales?
Sales helps you see your progress and maybe what is wrong so a company can adapt on its failed ideas. This helps the investor see the popularity so far and how the past of the buisness has gone, this can give him an idea of the growth of the business. If there are no sales then the investor will realise that this is not a good investment.
Business Plan: People?
People are a useful part of business as this is how your stock is being made or how your idea is being published, without people your idea is only an idea, not physical. This helps the invstor see the most importiant people and the quality of the workers and how the workers are qualified. If the people do not have the right skills, the investor may realise that this is not a good investment idea then.
Business Plan: Facilities / Setup?
Facilities/Setup are importiant for a business as this is how your business is going to be run in order and the facilities are the machines that are going to help your idea come to life. This can help someone conceive you money as this shows wether the business’s machines are high quality or not which then shows wether an invest will be a good or bad idea.
