Unit 1.1-Introduction to business Flashcards
What is a Business?
A business is a decision-making organization that provides goods or services to satisfy the needs and wants of consumers, usually for profit.
What are Inputs and Outputs in a business?
Inputs are resources used in the production process, such as raw materials, labor, and capital. Outputs are the finished goods or services produced and delivered to customers.
What is an Entrepreneur?
An entrepreneur is an individual who starts, manages, and takes risks in running a business. They innovate and seek opportunities to make a profit.
What is Entrepreneurship?
Entrepreneurship refers to the process of developing, organizing, and managing a business venture while taking on financial risks to make a profit.
A person opening a small café or an online store.
What are Consumer Goods?
Consumer goods are physical, tangible products sold to individuals for personal use.
What are Durable Goods?
Durable goods are long-lasting consumer goods, such as cars and refrigerators.
What are Non-Durable Goods?
Non-durable goods are used quickly, such as food and toiletries.
What are Capital Goods?
Capital goods are products used by businesses to produce other goods or services.
Example: Machinery, tools, equipment.
What are Services?
Services are intangible actions performed for consumers.
Example: Banking, education, healthcare.
What is the difference between Needs and Wants?
Needs are basic necessities people need to survive (e.g., food, water, shelter), while wants are people’s desires (e.g., cake, new car, smartphone).
What is the difference between Customers and Consumers?
Customers are people or organizations that buy goods or services but may not use them, while consumers use the product or service.
What are the Four Functional Areas of a Business?
The four functional areas are: Human Resources (HR), Marketing, Finance, and Operations Management.
What is the Primary Sector of the Economy?
The primary sector involves the extraction of raw materials, such as farming and mining.
What is the Secondary Sector of the Economy?
The secondary sector involves manufacturing and production, such as car making and construction.
What is the Tertiary Sector of the Economy?
The tertiary sector involves providing services, such as retail, banking, and healthcare.
What is the Quaternary Sector of the Economy?
The quaternary sector involves knowledge-based services, such as IT and research & development.
How does a Business Add Value?
Businesses add value by increasing the worth of a product or service beyond the cost of raw materials.
What are some ways to add value?
Ways to add value include branding, quality improvement, convenience, and customization.
What is the primary purpose of a business?
The primary purpose is to generate added value and make a profit by earning more revenue than costs.
Example: A coffee shop buys coffee beans for $1 per cup and sells coffee for $5 = $4 added value.
What is the Chain of Production?
The chain of production is the process of turning raw materials into finished products, involving primary production, manufacturing, services, and consumers.
What are some challenges for Business Start-Ups?
Challenges include lack of finance, poor business planning, strong competition, legal regulations, market uncertainty, and an unestablished customer base.
What are some opportunities for Business Start-Ups?
Opportunities include market gaps, low competition, innovation, technology use, and government support.
What is Market Share?
Market share is the company’s sales revenue as a percentage of the industry total sales revenue.
What is a Holding Company?
A holding company is a parent company whose purpose is to buy and control the ownership interests of other companies. The companies it owns are called subsidiaries.
