understanding business Flashcards
What are the Factors of Production, and what do they refer to?
Land — natural resources a business uses
Labour — the workforce of a business
Capital — man-made resources a business uses to produce/provide their goods and services, e.g. machinery
Enterprise — When an entrepreneur develops an idea into a business
What are the Sectors of Industry, and what do they refer to?
Primary Sector — the extraction or exploiting of natural resources, e.g. farming
Secondary Sector — manufacturing and construction, e.g. manufacturing cars, or building bridges.
Tertiary Sector — provides services to customers, e.g. retail, banking, education.
What are the Sectors of the Economy, and what do they refer to?
Private — profit-making businesses — this includes individuals working by themselves, and large companies, e.g. tesco, childminder. They can be Sole Traders, Private Limited Companies or Partnerships.
Public — Organisations created by the government to provide a service to the public, e.g. NHS, police, fire services.
Third — Made up of charities, voluntary groups, clubs — they exist to provide a service that neither the private or public would provide, e.g. Samaritans, or the local tennis club.
How can a business maximise Customer Service?
- Creating a culture of customer service, so that all employees understand the job they have to do.
- Making sure their products are of good quality.
- Providing good after-sale service.
- Having enough fully-trained staff to help customers.
How can a business measure Customer Care?
- Tracking the number of customer complaints.
- Checking for issues on social media.
- Survey customers through feedback forms.
- Mystery shoppers.
Why is Customer Service so important for business success?
Satisfied customers will:
- give the business repeat sales
- recommend it to others
- pay a higher price
- increase the businesses reputation
- generate more sales growth
- generate more profits
Unhappy customers will:
- complain
- look for refunds
- want repairs carried out/replacements
- give the business a poor reputation
What are the Business Objectives of each Sector of Economy?
Private: Provides a service that generally requires an immediate payment by the customer, e.g. retail, hospitality.
Objectives: To maximise profit, survival, provide customer satisfaction.
Public: Organisations that are owned, operated or funded by the government, e.g. police force, fire department, schools.
Objectives: to provide a service, stick to a budget, use taxes wisely.
Third: Delivers essential services, helps to improve people’s wellbeing and contributes to economic growth.
Objectives: to help their cause, increase donations.
What are the main Business Objectives?
- Profit
- Provision of a service
- Social Responsibility (e.g. being environmentally friendly)
- Survival
- Customer Satisfaction
- Market Share
- Enterprise/Innovation
What is a Stakeholder?
- Parties who have an interest or influence in a business.
- They have needs which the business must meet, or else there could be negatives consequences for the business.
What are the types of business organisations?
- sole trader
- partnership
- private limited company
- non-profit-making
- social enterprises
- local government
How is each type of business organisation financed?
Sole Trader
- invests own money
- bank loan
- borrow from family or friends
Partnership
- invests own money
- bank loan
Private Limited Company
- selling shares
- bank loan
- government grant
Non-Profit-Making
- membership fees
- donations
- bank loan
- government grant
Social Enterprise
- selling shares
- bank loan
- government grant
Local Government
- council tax
- national government funding
What are the External Factors effecting a business?
- political
- economic
- social
- technological
- environmental
- competition
What are the Internal Factors affecting a business?
- finance
- human resources
- current technology
