unit 1 - business in the real world

Question 1

what is a business?

Answer 1

-an organisation which trades to make money.
-could be one person or a giant supermarket chain.

Question 2

what are the 4 factors of production?

Answer 2

-land
somewhere to produce the goods.
-labour
epple to work in the business.
-capital
money to get the business started.
-enterprise
the drive or motivation from the owners to start a business.

Question 3

why would someone start a business? (5)

Answer 3

-produce goods.
-to supply a service.
-to distribute products.
-to fulfil a business opportunity.
-providing a good or service to benefit others - social enterprise.

Question 4

what are the laws businesses need to follow?

Answer 4

-employment laws.
national living wage
-consumer laws.
goods must be as described

Question 5

benefits of a business trading ethically? (3)

Answer 5

-increased sales due to their reputation of ethical trading.
-tend to have more loyal motivated staff.
-competitive advantage for the business.

Question 6

drawbacks of a business trading ethically. (3)

Answer 6

-unable to maximise profits for the shareholders.
-expensive to change countries where child labour and poor health is the norm.
-uk consumers will no longer tolerate these practices, loose sales.

Question 7

environmental considerations. (5)

Answer 7

-traffic congestion.
reduce packaging.
-recycling.
-waste disposal.
have to keep waste to a minimum.
-noise pollution.
-air pollution.
need a permit, if not could be fined or face imprisonment.

Question 8

benefits of a business trading with the environment in mind. (3)

Answer 8

-USP.
-investing now can eventually result in cost saving.
-huge green market meeting customers needs for greener living.

Question 9

drawbacks of a business trading with the environment in mind. (2)

Answer 9

-more expensive production methods, more expensive for customers.
-huge investment at the start (solar panels), can push up the costs in the business.

Question 10

advantages of a LTD private limited company. (4)

Answer 10

-protection of limited liability for investors.
-easy to raise capital, issue more shares.
-banks more willing to lend money.
-easier to grow and expand as there is more capital to complete the process.

Question 11

disadvantage of a LTD. (3)

Answer 11

-have to issue more info about itself which can be very expensive.
-have to prepare annual accounts and send to all shareholders.
-annual accounts also made for the public and competitors to see.

Question 12

advantages of a PLC. (5)

Answer 12

-limited liability.
-easy to raise capital.
-banks more willing to lend.
-easier to grow and expand.
-shareholders will appoint specialists to run the company.

Question 13

disadvantages of a PLC. (4)

Answer 13

-expensive to produce accounts yearly.
-public and competitors can see them.
-expensive process.
-original owners can loose control of shareholders gain majority of the shares.

Question 14

what are the aims and objectives of a business? (5)

Answer 14

-survival.
-profit maximisation.
-growth.
-growth domestic (within)
-growth international (foreign)

Question 15

what factors influence the location of a business? (4)

Answer 15

-costs.
-proximity to market.
-proximity to competitors.
-location factors.

Question 16

benefits of environmental considerations. (3)

Answer 16

-green credentials can be USP.
-investing in greener energy will be cost saving eventually.
-huge green smelt which meets customers needs for greener living.

Question 17

drawbacks of environmental considerations. (2)

Answer 17

-expensive production methods = expensive goods for customers.
-pushes up costs at the start.

Question 18

benefits of globalisation. (5)

Answer 18

-wider markets.
-economies of scale.
-labour migration.
-specialisation.
-multiplier effect.

Question 19

drawbacks of globalisation. (4)

Answer 19

-foreign competition.
-loss of UK staff.
-threat to service industries.
-diseconomies of scale.

Question 20

advantages of flow production. (3)

Answer 20

-larger quantities = bulk buy = save money.
-can produce complex designs in shorter time.
-JIT system.
-improved quality.

Question 21

disadvantages of flow production. (3)

Answer 21

-higher costs for factory and machinery.
-low motivation staff due to repetitive tasks.
-inflexible, hard to change factory machinery for something else.

Question 22

advantages of JIT. (4)

Answer 22

-no wastage.
-cost saving, no need for warehouse.
-less likely to go out of date.
-improved cash flow.

Question 23

disadvantages of JIT. (2)

Answer 23

-can’t quickly replace damaged parts.
-may not turn up on time, stopping production lines, costly.