Business In The Real World Flashcards
(22 cards)
what is the difference between a good and a service
a good is a tangible product e.g. a chocolate bar whereas a service is an intangible product e.g. uber
what is the difference between needs and wants
needs are essential for survival whereas wants are products we would like to have
what is a social enterprise
business that helps society rather than making profit e.g. hospital
what is meant by opportunity cost
the next best opportunity forgone
what are the 4 factors of production (CELL)
Capital, Enterprise, Labour, Land
explain the 3 types of businesses
primary sector - the first stage of production use for raw materials e.g. farm
secondary sector - second stage of production, converts primary resources into products e.g. manufacturers
tertiary sector - final stage organisations that provide services e.g. fast food stores
what are 4 characteristics of an entrepreneur
innovate, hardworking, risktakers, organised
what are 4 objectives of an entrepreneur
own boss, profit keeping, hobby/interest, flexibility
what is the dynamic nature of business (TELE)
technological, economic, legal, environmental expectations
state the 8 main business aims
survival, earning profits, shareholder value, customer satisfaction, market share, growth, being ethical, and environmental and sustainability targets
what are 2 purposes of setting objectives
helps with decision making and establishing priorities, and it can motivate everyone in the business because they know their goal
what is a stakeholder
an individual that is affected/ affects activities of an organisation
give examples of the main types of stakeholders
customers, employees, shareholders, local community, government, suppliers
what factors influence the location of a business
costs, proximity to the market, type of business, technology, transport links, availability of resources
what is a business plan
document that sets out what a business does and what it hopes to achieve
what are the benefits and drawbacks of business planning
there’s a variety of different outcomes and it sets out how the objective is going to be achieved but its uncertain and lack of experience
what are 4 methods of internal expansion
franchising, opening new stores, e-commerce, outsourcing
what is merger
when two or more businesses join together
what is takeover
when a business buys control of another one
how do stakeholders influence a business
negotiation, direct action, refusal to co-operate, voting
what are economies of scale
occurs when an increase in the sale of output results in a lower cost per unit
what are diseconomies of scale
the increase in average costs of production as a result of output increasing beyond it’s optimum level
