Business and its Environment Flashcards
Revision
What are the four factors of production?
Land, Labour, Capital and Enterprise
How is land an economic problem?
Businesses need a supply of raw materials for manufacturing but there is a limited supply resulting in scarcity.
How is labour an economic problem?
Businesses will need skilled workers to carry out specific tasks but there aren’t enough for every business.
How is capital an economic problem?
Businesses need capital to startup but often don’t have the amount of money it needs.
How is enterprise an economic problem?
A business needs an entrepreneur in order to make the business successful but such people are scarce.
What is an opportunity cost?
The next alternative that would have been chosen.
What is the primary sector?
Businesses producing raw materials for other businesses.
Give three examples of businesses in the primary sector.
Fishing, Mining and Farming
What is the secondary sector?
Businesses that use raw materials to manufacture products.
What is the tertiary sector?
Businesses that provide a service to customers.
Give three examples of tertiary sector businesses.
Retail, Banking and Insurance
Define specialisation.
When a business focuses one particular activity.
What is the chain of production?
The process of a product from raw materials, manufactured and then sold.
Give one advantage of specialisation.
The business can reduce costs, producing cheaper goods.
Define added value.
When a business increases the value of a product.
Give three factors that have lead to the decline of the primary sector in Britain.
- Raw materials have been fully depleted.
- Machinery has replaced workers.
- Foreign competition.
What is the decline of the secondary sector?
De-industrialisation
Give two factors that have lead to the decline of the secondary sector in Britain.
- Cheaper foreign competition.
- The use of machinery in the place of workers.
How has the importance of the tertiary sector changed in Britain?
The importance has increased.
Give four factors that have lead to the change of importance for the tertiary sector.
- Jobs are connected to a growing population.
- The increase in wealth.
- The increase in leisure time spent.
- The increase of customer service.
What are the four main business objectives?
- Profit
- Growth
- Survival
- Providing a service.
How might a business achieve sales growth?
Opening more outlets.
Give three different forms of growth.
- Sales growth
- Increased market share
- Elimination of competition
What is a business’ market share?
The amount of the market that a business controls generally in sales pc.
What is elimination of competition?
A business takes over / buys its competitor resulting in instant growth.
When might a business see survival as a vital objective?
During a time of recession when people don’t have much income.
what is the acronym S.M.A.R.T stand for?
S- specific M- measurable A- achievable R- realistic & relavent T- time specific
what is a mission statement?
a statement of the businesses core aims, phrased in a way to motivate employee’s and to stimulate interest by outside groups e.g of mission statements: Google; “to organise the worlds information and make it universally accessible and useful”
what are corporate aims
these are the very long-term goals which a business hopes to achieve. The core of a businesses activity is expressed in its corporate aims and plans.
what are the benefits of having corporate aims?
- become a starting point for which successful management would take place.
- help develop a sense of purpose and direction for the whole organisation if they are clearly communicated to the workforce
- They allow future assessment to be made, at later date of how successful the business has been attaining its goals?
- they provide the framework within which the strategies or plans of the business can be drawn up. A business without a long term corporate plan or aim will often stray from event to event without a clear purpose.
arguments used to in favour of a mission statement
- they quickly inform groups outside the business what the central aim and vision are. 2. they prove motivating to employees, as well as to the community if mission statement is positive to the environment or to the public. 3. they help guide and direct employee’s 4. helps a business tell outsider ‘what the business is about’
mission statements are of the criticized
- they can be to vague and general 2. virtually impossible to analyse or disagree with 3. it can be common for 2 rather opposite businesses having similar mission statements