Unit One: Business In The Real World

Question 1

Factors of the primary sector

Answer 1

• produces raw materials
• can be extracted from the ground - mining
• Can be grown - farming
• can be collected - fishing

Question 2

Why are businesses set up?

Answer 2

• to provide goods or services
• to benefit other people - not-for-profit
• business opportunity

Question 3

Factors of the secondary sector

Answer 3

• manufacture goods
• turn raw materials into finished goods
• example;building/construction industry

Question 4

Factors of the tertiary sector

Answer 4

-provides services for other businesses
- provides services for consumers
-financial services like banking and insurance are used by both businesses and consumers

Question 5

LTD - advantages and disadvantages

Answer 5

ADVANTAGES:
- limited liability - cant lose more than invested
-company can continue trading even if a stakeholder dies
- easier to get a loan

DISADVANTAGES:
-more expensive to set up due to paperwork
- company is legally obliged to publish its accounts

Question 6

Four factors of production

Answer 6

• land
• labour
• capital
• enterprise

Question 7

Plc- advantages and disadvantages

Answer 7

ADVANTAGES:
- more capital can be raised
- helps company expand
- limited liability

DISADVANTAGES:
-hard for stakeholders to agree on how the business is run
- Easy to be taken over
- accounts have to be made public
- more profits shared

Question 8

Business aims and objectives

Answer 8

• survival
• maximise profits
  -growth
• increased shareholder value
• increased market share
  -achieve customer satisfaction
• do what’s right socially and ethically

Question 9

What causes a business objectives to change ?

Answer 9

• new legislation
• changes in economy
• changes in technology
• environmental expectations

Question 10

What is a business plan?

Answer 10

An outline of what a business will do and how it aims to do it

Question 11

What are business plan sections?

Answer 11

• personal details
• mission statement
• objectives
• product description
• production details
• staffing requirements
• finance

Question 12

What are the location factors?

Answer 12

• location of raw materials
• labour supply
• competition
• location of market
• cost

Question 13

Types of internal expansion

Answer 13

• e-commerce
• opening new stores
• outsourcing