Understanding Business Flashcards
What does the primary sector do
extracts raw materials or natural resources from the land
Secondary sector
manufactures goods, using raw materials and converts them into new products like clothes
What does the tertiary sector do
Provide a service
What does the Quaternary sector do
consists of those industries providing information/ research services
What are strategic decisions
They are long term goals set by senior managers
What are tactical decisions
They are medium term decisions made by middle managers
What are operational decisions
They are day to day decisions which ensures smooth running of the business
How is the effectiveness of a decision determined
Customer Surveys
Compare profits/sales
Staff feedback
What are some benefits of growth
Bigger businesses benefit from economies of scale which lowers unit costs
Larger businesses have more influence of market price
How can a business achieve organic growth
Hiring more staff and equipment to increase its output.
Developing new products
Advertising
What is horizontal integration
Horizonal integration – often referred to as a Merger - is where two or more businesses agree to join together to become one larger firm.
How is forward vertical integration implemented
When a business takes over a company at a later stage in the production process.
How is backward vertical integration implemented
when the business takes over a company at an earlier stage in the production process
What is conglomerate integration
It is where a business moves into an entirely different market
What is lateral integration
It is when a business moves into a different market within the same industry.
