Unit 1- Understanding Business Flashcards
Describe Two different objectives of a PLC
Profit maximization- Making the highest amount of profit from each product sold, done through reducing cost of raw materials (changing supplier)
Sales maximization- Making the most sales possible, this can be done as a strategy to obtain a large market share and can be done by reducing the price per item.
Social responsibility- Keeping up a positive image for the brand.
Growth- Become larger and in more areas, could be done through frachising.
Describe the role of the quaternity sector of industry
Its the support sector, lots of advice can be given about things like IT support and financial advice.
Explain why it can be difficult for business organisations to meet or satisfy consumers’ wants
Consumer wants are unrealistic
Consumers don’t know what they want so the business needs to anticipate future needs
Difference between goods and services
Goods are tangible
Services are things that are done for us
Describe FOP
The resources that a business needs to produce goods and services
Land- The raw materials and premises
Labour- Workforce
Capital- The money and equipment
Enterprise- The idea and people to invent new things
SOI
Primary- Extracting raw materials from the earth
Secondary- Turning those raw materials into goods (adding value)
Tertiary- Services sector (selling them to people or hairdressers ect)
Quaternity- Where support and info is provided (IT consultancy or financial advice)
SOE
Private sector- Provides goods and services to public with goal to make a profit
Public- Government run organisations- Funded by taxpayer- Aims are things like improving the standard of living in the country
3rd- Charities and social enterprises- Aims are to raise money and awareness for different causes
What do objectives help to identify?
Goals of the organisation
How they are to be achived
The eventual end result
Name 5 objectives
Profit maximisation Survival Sales maximisation Growth Satisficing Innovation Social responsibility
Explain satisficing
The business is looking to be ‘Good Enough’ and hold a satifactory position.
MOG
Integration- Horizontal, Lateral, Vertical Takeovers Conglomerate Diversification Divestment Buy out/Buy in
Define Conglomerate
When two corporations from different industries combine (two big businesses that own other businesses combining)
Reasons for integration
Avoidance of Future takeovers (security)
Increased efficiency
Acquire assests of other firms
External Factors
Political Economic Social Technological Enviromental Competitive
Political Factors
Laws
Taxes
