Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

AQA A-Level Business > What is a Business > Flashcards

What is a Business Flashcards

1
Q

What is a Business?

A

Any organisation that makes goods or provides services.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are Customer Needs?

A

The wants and desires of buyers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a Business Startup?

A

A new firm operating in a market for the first time.
-There’s nearly half a million start ups a year, most are very small and operate in the service sector.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are Suppliers?

A

Firms selling products to other business and selling to customers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a Market?

A

Any place where buyers and sellers meet to trade products (can be a high street or a website).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is Adding Value?

A

The process of making the product more valuable to the purchaser. In each stage of the production process more value is added to the product.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How can you Add Value?

A

-USP
-Branding
-Quality
-Convenience
-Design
-Speed and excellent service
-Product features
-Benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Why does a business Add Value

A

A business adds value when the selling price of an item is higher than the costs of all the resources used to make it.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is Primary Production?

A

This involved acquiring raw materials. For example, metals and coal have to be mined, oil drilled from the ground, rubber tapped from trees, foodstuffs farmed and fish trawled, This is sometimes known as extractive production.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is Secondary Production?

A

This is the manufacturing and assembly process. It is involved in converting raw materials into components. For example, making plastics from oil. It also involved assembling the product, eg building houses, bridges and roads.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is Tertiary Production?

A

This refers to commercial services that support the production and distribution process, e.g. insurance, transport, advertising, warehousing and other services such as teaching and healthcare.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What Aims can a business have?

A

-Profit
-Expand stores
-Employ more staff
-Increase market share
-Good customer services
-Good working environment
-Sustainability
-Efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is a Mission of a business

A

A mission of a business is its overall purpose or main cooperate aims (to motivate/putting corporate aim into fancy words).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is an Aim?

A

Overall what a business wants to achieve.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are Corporate/Strategic objectives?

A

Goals of the business as a whole.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are Functional/Department objectives?

A

Objectives for each department.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the criteria for the most effective business objectives?

A

Specific - objectives are aimed at what the business does.
Measurable - the business can put a value to the objective.
Achievable - by all those concerned in trying to achieve the objective.
Realistic - should be able to be achieved by the resources available.
Time specific - should have a deadline to achieve it by.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What Objectives can a business have?

A

-Profit
-Growth
-Survival
-Cashflow
-Social and Ethical

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Should there be a good balance between long-term and short-term objectives?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is Profit?

A

The financial growth a business makes from providing goods and services.
or
Profits occur when the revenue of a business is greater than the costs it incurs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is Revenue?

A

The money the business makes from sales.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

How does the costs of producing products help make business decision?

A

-Supports budgets
-Pricing
-Employee pay
-Training
-How many people are employeed
-Changes in production methods
-To hit new targets
-Profit margins

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Why is profit important?

A

-Profit isn’t the return for taking a risk.
-Profit measures the success of an investment .
-Profit is an important source of finance.
-Profit can motivate people.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Which two ways can profit be used?

A

-The owners may take profits out of the business for their own benefit.
-Profits may be retined in the business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is the Public Sector?

A

Owned and run by the government - aim to provide for the public rather than to make a profit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What is the Private Sector?

A

Owned by private individuals, Non-Profits organisations such as charities are also part of the private sector.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What are the 5 types of Business Ownership?

A

-Sole Traders
-Partnerships
-Private Limited Companies (Ltds)
-Public Limited Companies (Plcs)
-Social Enterprises

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What is Unlimited Liability?

A

The owner of the business is legally responsible for all the debts of the business. Same legal identity, can lose both personal and business assets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What is Limited Liability?

A

The owner of the business only having part responsibility for the debts of the business . Separate legal identity, can only lose assets in the business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What is a Sole Trader?

A

-Most common type of business
-Individual owning the business
-Personally responsible fro all business debts
-Unlimited Liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What are the Advantages of being a Sole Trader?

A

-Can keep all profits
-Have full control over the business
-Creative freedom
-Simple to run
-Easy to set up

32
Q

What are the Disadvantages of being a Sole Trader?

A

-Can lose your personal assets (unlimited liability)
-Risky
-No skills from anyone else
-Long hours

33
Q

What is a Partnership?

A

-Started and owned by more than one person
-Unlimited liability
Legal partnership agreement covering areas such as :
-How profits are shared
-How decision are taken
-What happenes if a partner was to leave

34
Q

What are the Advantages of being in a Partnership?

A

-Can get skills and ideas from multiple people
-Less personal responsibilities
-Multiple viewpoints
-Greater potential to raise finance

35
Q

What are the Disadvantages of being in a Partnership?

A

-Unlimited liability
-Profits are shared
-Can be arguments
-Missed communication
-Complicated to sell
-A poor decision by one partner damages the interests to other partners

36
Q

What is a Private Limited Company (Ltd)?

A

-Can’t sell shares to the public (a% of the business)
-Not sold on the stock exchange
-May not be able to sell shares unless all other shareholders agree
-Often family businesses
-Limited liability

37
Q

What is a Public Limited Company (Plc)?

A

-Can sell shares to the public
-Shares quoted and sold on the stock exchange
-Shares are freely tranferable and can be bought and sold through stockbrokers
-Usually start as private and move to public as they grow
-Need over £50,000 of share capital and if they are listed on the stock market at least 25% of shares must be made available
-Limited liability

38
Q

What are the Advantages of being a Limited Company in general?

A

-Can’t lose your personal assets (limited liability)
-Get to raise share capital
-Stabel form of structure (business continues to exist when shareholders leave/change)
-Can pay less tax

39
Q

What the Disadvantages of being a Limited Company in general?

A

-Have to release your financial information
-Greater admin costs
-Directors’ legal duties
-Must give away a % of your business
-(Private can’t sell to public only family and friends)

40
Q

What is Social Enterprise/ Not for Profit?

A

-Benefit the community
-Have social aims
-Includes charities, housing associations, community development costs

41
Q

What is the Stock Exchange?

A

Where businesses can sell shares of their business to potential shareholders to raise finance.
Shares are a percentage of a business that a shareholder owns in exchange for money.

42
Q

What is Ordinary Share Capital?

A

Money raised by shares sold by companies.

43
Q

What is Market Capitalisation?

A

The total value of all the ordinary shares issued by the company.

44
Q

What is the formula for Market Capitalisation?

A

Market Capitalisation = Number of issued shares x Current share price

45
Q

What are Shareholders?

A

The owners of the company.

46
Q

What is Stock?

A

A type of security that represents ownership in a corporation.
A shareholder can own one share of stock or many stocks.
Stocks and shares are sold on the stock exchange.

47
Q

Why might a Shareholder Invest?

A

-To get dividends
-They are passionate about the business
-To support the owner
-They agree with the business aims and objectives
-To feel valued
-To influence business decisions
-Venture capitalists do to make a large return back

48
Q

What are the main Roles of Shareholders?

A

-Provide funds
-More shares =More power
-Most shareholders are not involved in the business decisions

49
Q

What is a Dividend?

A

A payment from the accumulated profits earned by a company to shareholders who qualify for such payments.
Can only be paid if the business is making a profit.
The payment per share is authorised with shareholders and is a fixed amount per share .

50
Q

What can impact Share Prices?

A

-Supply and Demand
-Performance of the business
-Interest rates
-Inflation
-Competition
-Speculation (eg of a new product)
-Social media
-Environmental and Ethical approaches
-Sponsorship

51
Q

What are Share Prices decided on?

A

How well the business is currently doing between the two parties (two people).
-Ltd’s have control over their share prices because they sell to family and friends

52
Q

Why do Share Prices go Up and Down?

A

Performance of the company - when the company is performing well then share prices go up.
Speculation and rumours of new product launches - if new products are released then people many want to invest in the company so share prices go up.
Current share price - if low people may think they are getting a bargain and therefore invest with the hope of return, if high then shareholders may sell quickly to gain capital gain.
Interest rates - if the bank is offering low interest then demand for shares could increase, people may want to save their money when interest rates are higher so share prices decrease.
State of the economy/external factors - if the economy is bad the share prices will go down as people will have less disposable income.

53
Q

What are Rights Issued?

A

-When a company issues existing shareholders a right to buy additional shares in the business.
-The company will offer the shareholder a specific number of shares at a specific price.
-The company will also set a time limit for the shareholders to buy the shares.
-The shares are often offered at a discounted price to encourage existing shareholders to take the company upon their offer.
-If not wanted, they will sell using the stock market.

54
Q

What is the Private Sector?

A

-These are business enterprises
-There are over 4 million in the UK
-They produce most of the goods and services we use everyday
-Most are very small (eg village shop) but some are enormous (eg tesco)
-Private sector businesses are set up by entrepreneurs.
They come in different forms:
-Sole traders
-Partnerships
-Plc’s
-Ltd’s

55
Q

What is the Public Sector?

A

-Many goods and services are not suitable to be produced by private businesses
-The government often organises provision of these
-Goods and services produced by government owned organisations are known as the public sector
-This may happen for 2 reasons:
-Private business may not be anle to make a profit from them (eg street lights - how do you get users to pay)
-Or else they are too important to just allow priavte firms to run (eg police, army healthcare, education and roads)

56
Q

What is the Voluntary Sector?

A

-Voluntary includes charities and socities that exist to help people (eg oxfam; cancer research ect)
-In the UK this sector is less than 1% of the economy
-The private sector (approx 80%) and public sector (approx 19%) are more important

57
Q

What is Privatisation?

A

Moving from the public to private sector - the government sells off some of what it owns to private investors.
eg, up to 2013 Royal Mail was in the public sector; it was a public corporation, owned by the state, but now it is in the private sector - its a Plc acting to maximise profits.

58
Q

What might be Objectives in the Public Sector?

A

Breakeven, help the communitym survival, efficient, help the countries finances.

59
Q

What might be Objectives in the Private Sector?

A

Expand, profit maximisation, growth, survival, sales maximisation, reputation, market share, satisficing ( just making do - small businesses, just to be able to survive to make money).

60
Q

What might be Objectives in the Voluntary Sector?

A

Help the community by raising money, breakeven.

61
Q

What is PESTLE?

A

An effective way to analyse key features of the external environment is to use the PESTLE. These factors influence the costs faced by the business and the demand for their products in the environment/market they are looking to move into.

62
Q

What is the P in PESTLE?

A

Political
-Political stability (Brexit), could send UK into recession.
-Demand in the economy is low -> taxes could be cut therefore people have more to spend.
-Change of government -> new laws and regulations could be put in place.

63
Q

What is the first E in PESTLE?

A

Economic
-Interest rates going up means people may save their money more so business may struggle.
-Unemployment rates being high means people may have less disposable income but they can employ more.

64
Q

What is the S in PESTLE?

A

Social
-Population age means you can target more specific to the age to make more money.
-Lifestyle attitudes, extend your range to suit more choice e.g. more vegans now.

65
Q

What is the T in PESTLE?

A

Technological
-Technological change, more machinery means more people lose their jobs, so more are unemployed.
-Internet availability/speed, can sell to more people and makes it more convenient to trade.

66
Q

What is the L in PESTLE?

A

Legal
-Discrimination laws means more diversity in the workforce, better reputations and perspectives.
-Health and safety, have to take precautions, means more people will want to join the business.

67
Q

What is the second E in PESTLE

A

-Weather, may need to adapt to the season to fit customer needs.
-Sustainability, allows businesses to have a better reputation and so gain a competitive advantage . Can draw in new customers e.g. environmentally friendly customers.

68
Q

What is a Business Environment?

A

Incorporates all of the internal and external factors that affect how the company functions including employees, customers, management, supply and demand and business regulations.

69
Q

What can a Happy and Safe Environment achieve?

A

-Willingness.
-Productivity.
-Motivation.
-Good reputation.
-Personality growth.
-Confidence.

70
Q

What is Consumer Confidence?

A

How confidently they are spending their money

71
Q

What is Business Confidence?

A

How confident they are that people are spending.

72
Q

How does the External Environment impact Demand and Costs?

A

-Market conditions (political, labour supply, income/economic, seasonal demand) -> If the market is doing well the demand for luxury goods increases and own brand decreases.
-Competition -> Less competition leads to more demand which means their costs can go down as they can advertise more.
-Interest rates -> Low interest rates means people will spend and not save so may spend more on luxury items.
-Environmental factors -> An increase in demand for ethical products make costs increase because it’s more expensive to be ethical and environmentally friendly.
-Tech advances -> Can increase short term costs for a business as tech is expensive, can increase demand as products are more consistent.

73
Q

What are Ethics?

A

Moral principles or standards that guide the behaviour of a person or business. A business which behaves ethically will act in a way which is seen as morally correct.

74
Q

What makes a business Ethical?

A

-No child labour.
-Environmentally friendly.
-Fair trade labels.
-Reducing packaging.

75
Q

What are the Advantages of Behaving Ethically?

A

-Can offer products at a higher price.
-Good reputation/Better brand image.
-Can attract ethically conscious customers.
-More loyalty.
-Employees don’t feel guilty.

76
Q

What are the Disadvantages of Behaving Ethically?

A

-Costly -> higher prices.
-Customers may not care.
-Customers may go to competitors if expensive.

AQA A-Level Business (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions