Flashcards in What is a business? Deck (15):
What is a business?
A business is any organisation that makes goods or provides services.
What are goods?
Goods are physical products such as burgers or cars.
What are services?
Services are non-physical items such as hairdressing.
What are customer needs?
Customer needs are the wants and desires of buyers.
Who are the suppliers?
Businesses buy the products they need from suppliers – firms selling products to other businesses - and sell to customers.
Who's the consumer?
The individual who uses the product is called a consumer. Sometimes the customer and consumer are different people - for example, parents buy a pen for their child to use at school.
Whats are markets?
A market is any place where buyers and sellers meet to trade products - this can be a high street shop or a website.
What is production?
Production is the business activity of using resources to make goods and services.
How do businesses add value?
A business adds value when the selling price of an item produced is higher than the cost of all the resources used to make it.
What are inputs?
In order to create goods and services, a business buys or hires inputs such as raw materials, equipment, buildings and staff. These inputs are transformed into outputs called products. These products are the goods and services used by consumers.
What do the three sectors do?
There are three main types of industry in which firms operate. These sectors form a chain of production which provides customers with finished goods or services.
this involves acquiring raw materials. For example, metals and coal have to be mined, oil drilled from the ground, rubber tapped from trees, foodstuffs farmed and fish trawled. This is sometimes known as extractive production.
this is the manufacturing and assembly process. It involves converting raw materials into components, for example, making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.
this refers to the commercial services that support the production and distribution process, eg insurance, transport, advertising, warehousing and other services such as teaching and health care.