Why businesses exist Flashcards
Why do businesses exist?
To provide goods and services for the market.
What are some different reasons why businesses exist?
To make a profit
To create employment
To create new products and services
To enhance a country’s reputation
What is the transformation process?
When a business converts inputs to outputs adding value to satisfy customers.
What is added value?
Increasing the worth of resources by modifying them.
What is the formula for added value?
Selling price - cost of bought inn materials.
What is a USP?
A feature of a product or service that allows it to be differentiated from other products.
What is B2C and B2B?
B2C - when goods and services are sold directly to customers.
B2B - when goods and services are sold to other businesses.
What are the 3 sectors in business?
Primary
Secondary
Tertiary
What does the primary sector involve?
The extraction of raw materials.
E.g. farming, fishing, mining.
What does the secondary sector do?
It transforms or refines the raw materials.
E.g. manufacturing, construction.
What is the tertiary sector?
The service industry.
E.g. retail, restaurants, hotels.
