1. nature of business- role of busines Flashcards
what is a good
Tangibles are physical products that can be handled and stored before they are sold to the consumer, such as bread, clothing, canned foods or a car.
what are services
Services are intangible, which means that they cannot be touched (not physical)
Product differentiation for goods
Goods can be differentiated in a number of different ways. Two basic ways is by colour or variation of features of a product.
Differentiation for services
Like goods, services can be differentiate in a number of different ways. For example, the amount of time spent, level of expertise/knowledge, level of qualifications and level of demand.
what are the key roles of business?
(P I E, W I C, Q)
- profit
- employment
- income
- choice
- innovation
- wealth creation
- quality of life
what is profit
Profit is what remains after all business expenses have been deducted from sales revenue.
Profit is essential if a business is to meet day-to-day expenses (such as production costs, wages, insurance, electricity and rent) and provide a return on the owners’ financial investment.
what is employment
It is the state of having paid work (an agreement between an employer and an employee that the employee will provide certain services on the job, to facilitate the accomplishment of the business goals, in return for compensation (income).
This allows the workforce to spend part of its income on satisfying its needs and wants, and consumer goods and services.
what is income
Income is money received by a person for providing labour, or a business from a return on its investments
It is important as it generates a source of finance for the business and shows an indication of how successful the business is.
what is choice
Choice is the act of selecting among alternatives
- A function of business is to produce goods and services for consumers to satisfy their needs and wants.
- Consumers have freedom of choice and the opportunity to purchase a variety of products at competitive prices
- Most businesses usually offer a range of products as this will increase profits on the long-run
what is innovation
The development of new products, or improvements to existing products
what is wealth creation?
what is quality of life?
Quality of life refers to the overall well-being of an individual, and is a combination of both material and non-material benefits
