Creado por Carmen Diaz
hace alrededor de 6 años
|
||
Pregunta | Respuesta |
What are the Factors of Production? | Land, labour, capital & enterprise. All of these 4 are the resources used to produce goods and services |
Definition of land | Natural resources on the planet e.x: broccoli/fish, cows, diamond, cool, trees/flowers, ground/area, hills, seas, air, water... |
Definition of labour | Is the human input (workers, managers...) Human capital: levels of skills, qualities & qualifications e.x: teachers, security, chefs, cleaner, bus driver |
Definition of capital | Man made physical goods used to produce other goods and services e.x: machines, computers, tools, roads, kitchen equipment, school bus, furniture... |
What are investments | Investments are increases in the level of capital |
Definition of enterprise | The entrepreneur provides the original idea: they risk their own resources: they organize the 3 factors of production e.x: Miss Tessa, Mr Ray |
What is the added value? | Is the difference between selling price of a product and the cost of bought in materials and components. |
Added value | Input: tissue, worker, machine. AV: branding, quality, style, decoration, customer service, shop decoration. Output: a jean There are many factors that can increase the added value of a jean |
Definition of opportunity cost | The next best alternative you have to give up is the opportunity cost |
What are the stages of economic activity? | Primary, secondary & tertiary |
Definition of primary | Extracting natural resources e.x: extracting coal, oil, iron, gas. FORESTRY |
Definition of secondary | Manufacturing e.x: aircraft, assembly, vehicles, white goods, dishwasher. TRAVEL AGENT |
Definition of text | Services e.x: health, educating, banking. BAKERY |
Qualities needed in an effective entrepreneur? | -imagination/ creativity -goals -hard-working -experience -patience -resiliance(=determination) -original ideas -money? -confidence -smart -taking calculated risks -ambition |
Definition of Specialization and Division of labour | Where the production process is split up into different tasks and each worker performs one of these tasks |
Advantages of Specialization and Division of labour | -quicker -no swapping of tools -staff become expert in one task -less skills needed -allows for more machinery |
Disadvantages of Specialization and Division of labour | -if someone is absent, production may stop -boredom for staff: repetitive -one person can hold up production |
What are the types of economy? | Planned & free market. |
Definition of planned | The government own and control businesses and organisations |
Definition of free market | Private individuals own and control businesses and organisations |
Examples of Private sector | -private schools -taxis -shops -banks -restaurants Most countries have mixed economies with a private an public sector |
Examples of public sector | -state hospitals -courts of law -buses/train -army -correos Most countries have mixed economies with a private an public sector |
Why do businesses want to grow? | -bigger market share -more profits -credibility (bigger, better known) -market power -expanding the brand -spread risks -economies of scale |
How do businesses grow? | Internal/Organic Growth & External Growth |
Definition of Internal/Organic Growth | When a business expands by increasing the size of its operations e.x: opening more outlets, shops, factories |
Definition of External Growth | When a business grows by joining with or buying another business (merger or takeover) |
What is Horizontal Integration? | When firms at the same stage of production process to join together e.x: brewery = brewery |
What are the types of Vertical Integration? | Vertical Backward Integration & Vertical Forward Integration |
Definition of Vertical Backward Integration | When a firm joins with another firm at an earlier stage of the production process e.x: hop farm = brewery |
Definition of Vertical Forward Integration | When a firm joins with another firm at an later stage of the production process e.x: brewery = PUB/Bar |
What is Conglomerate? | Joining with firms in a different industry. Diversification e.x: virgin mobile, virgin money, virgin airplane |
What is De-industralisation? | This happens when there is a decline in the importance of the secondary sector in a country |
Problems linked with growth? | -diversification could weaken the brand -too many costs/debts -loss of control -diseconomies of scale -poor communication -could be dashes = different cultures/ways of doing things in 2 joined businesses |
Why do some businesses prefer staying small? | -keep it personal, keep close contact with staff and costumers -more mangeable, less stressful -keep control -finance not available -less risk -niche market |
Ways of Comparing Business Size? | Labour Intensive & Capital Intensive |
Definition of Labour Intensive | Uses more workers relative to machinery in the production process |
Definition of Capital Intensive | Uses more machinery relative to worker in the production process |
Ways of Measuring Sizes of Businesses? | -Number of workers -Value of output -Value of capital employed -Level of sales |
what is meant by Number of workers? | How many people are employed -Some businesses are large, but capital intensive -means limitations |
What is meant by Value of output? | How much are the products worth -makes services businesses look small -higher value of output might not mean more output |
What is meant by Value of capital employed? | Money invested into the business in assets -Some businesses are large, but labour intensive |
What is meant by Level of sales? | Measures sales turnover/revenue -some firms sell more, but at lower prices |
Why do some businesses fail? | -poorly trained staff -don't meet customer's needs -faulty/poor quality products -over-expansion -poor service -bad location -financial difficulties -illegal activity -lack of market research -too much competition -lack of control -lack of experience running a business -not enough income -too expensive products/charge too much money |
Why do businesses have to draw a Business Plan? | -Because the business needs to be well planned/organized -To show it to the bank and/or investors |
What does a Business Plan include? | -name of the business & owners -the idea (which products will be sold) -price of the products -who is it aimed at -market research -location of the business -resources needed to start it: equipment, human resources.... -finance (where the money will come from at the start) -cash flow forecast and projected profit & loss accounts |
What are the Private Corporations? | Sole traders, partnerships, franchises, LTDs & PLCs |
Define Sole Trader? | Owned and operates by 1 person |
Advantages of Sole Trader? | -easy to set up -needs little money to set up -the owner makes all the decisions -accounts can be kept private -all the money earned is for the owner (because he is the only staff) |
Disadvantages of Sole Trader? | -Unlimited liability -money difficult to obtain -holidays difficult to take -owners may have to work long hours illness may close the shop |
Define partnership? | Owned by 2 to 20 people |
Advantages of partnership? | -partners will invest -responsibilities and decisions can be shared -more skills available |
Disadvantages of partnership? | -unlimited liability -legal costs if a deed of partnership is required -possible arguments |
What is a Private Limited Company? (LTD) | A company owned by at least 2 shareholders and shares are sold privately to friends and family |
Advantages of LTD? | -can get money by selling shares -death and illness won't affect the running of the company -limited liability |
Disadvantages of LTD? | -shares can be sold on the stock market -more expensive to set up -have to share profits, by paying dividends |
What is a Public Limited Company? (PLC) | Private business which shares are sold to the public on a Stock Exchange. |
Advantages of PLC? | -shareholders have limited liability -can get a lot of money by selling shares to the public, making the firm bigger -shares can be given to workers to motivate them |
Disadvantages of PLC? | -firm can be taken over (if you buy 51% of the shares) -accounts are not private -more expensive to set up |
Limited liability | -owners/shareholders are separate from the business itself -business entirely separate legal identity = shareholders not personally responsible for debts = liability limited to the amount of money they put into the company -Public and Private Limited companies |
Unlimited liability | -business isn't a separate legal identity from the owner -business in trouble = owner personally responsible for debts = so owner can be forced to sell their own possessions -Sole Traders & Partnerships |
What's a franchise? | A franchise is the right to offer the concept and sell the product of an existing business |
What's a franchisor? | The franchisor is the owner of the original business that sells the franchise |
What's the franchisee? | The franchisee buys and operates the franchise, they have to continue to pay a set fee or a % of the profit |
Advantages of franchisors? | -franchisee buys a licence from him to use the brand's name -expansion of the business much faster than if the franchisor had to finance all new outlets -Management of the outlets is the Franchisee's responsibility -All product obtained must be from the franchisor |
Disadvantages of franchisors? | -franchisee keeps profits from the outlet -poor management of one outlet might end to a bad reputation for the whole business |
Advantages of franchisee? | -chances of business failure reduced because a well-known product is being sold -franchisor pays for advertising -all supplies are obtained from a central source = the franchisor -fewer decisions to take than with an independent business: prices, store layout and range of products will have been decided by the franchisor -training for staff and management is provided by the franchisor -banks are often willing to lend to franchises due to low risks |
Disadvantages of franchisee? | -less independence than with a non-franchised business -may not be able to make decisions that would suit the local area -licence fee must be paid to the franchisor and possibly a percentage of the annual turnover |
What are joint ventures? | Joint ventures occurs when two businesses combine resources for a specific goal for a period of time. A separate business is created with two parent businesses (like: google & NASA developing Google Earth |
Advantages of joint ventures? | -sharing of costs (very important for expensive projects) -local knowledge when joint venture company is already based in the country -risks are shared |
Disadvantages of joint ventures? | -if the new project is successful, then the profits have to be shared with joint venture partner -disagreements over important decisions might occur -the two joint venture partners might have different ways of running a business |
What's a stakeholder? | Anyone who has an interest in a business |
Advantages of setting businesses? | -help motivate the workers (they have something to aim for) -help managers make decisions -SMART objectives unite the business |
What are the business objectives? | -survival (for new businesses or the open of a big competitor) -profit (everyone) -returns to shareholders (dividends and increased share price = concern companies) -growth of the business (to increase status and salaries, spread risks...) -market share (publicity, increase influence over suppliers and customers -service to the community (has social objectives - help people/environment) |
What are Public Corporations? | They are large businesses owned by the government |
Who manages the PC? | The government sets objectives, but they appoint a board of directors to manage it |
Advantages of PC? | -if its a monopoly, they keep prices low (or free) for customers -government can nationalize a failing business, therefore keep it open (provide essential services) and secure jobs |
Disadvantages of PC? | -profit motive not as powerful as in a private sector business -often no close competitor = so lack of will to increase choices and efficiency -could be used for political gain (win as election) |
Why businesses objectives changes over time? | -big competitor opens = changes to survival -new laws -already met previous objectives -change in customer's needs -change of owner/manager |
Objectives of Public Sector businesses? | -provide a service & improve quality -make profits to reinvest in the organisation or other public sector businesses -provide jobs |
¿Quieres crear tus propias Fichas gratiscon GoConqr? Más información.