Understanding Business

Nota:

• Businesses identify customers' needs and wants by conducting market research.

1. Needs

   Nota:

   • Needs are essential for us to be able to live and include food, water, clothing, and shelter.
2. Wants

   Nota:

   • Wants are things that we would like to have, but can live without. Examples: a mobile phone, TV, ipod, holidays.

Nota:

• Businesses produce goods and services to help us satisfy our needs and wants.
• We satisfy our needs and wants by consuming (using up) the different goods and services that businesses produce.

1. Types of Products
   1. Goods

      Nota:

      • Goods are tangible - things we can see, touch and pick up. Examples: DVDs, chocolate bar, clothes, and newspaper
      1. Durable

         Nota:

         • Durable goods are goods that can be used more than once. Example: washing machine, TV, mobile phone.
      2. Non-durable

         Nota:

         • Non-durable goods are goods that can NOT be used more than once. Example: toilet paper, plaster, food
   2. Services

      Nota:

      • Services are intangible - things we can NOT see, touch, or pick up. Examples: getting a haircut, getting a mechanic to fix car.
2. Factors of Production
   1. Capital

      Nota:

      • The man-made resources that are needed to make a product. Examples: machines, tools, and money.
   2. Enterprise

      Nota:

      • Enterprise is combining all factors of production by the entrepreneur.
      1. Entrepreneur

         Nota:

         • Entrepreneur is the person who combines the factors of production together and who is willing to take the risk to see whether or not his or her idea will work.
         • Some skills and qualities of Entrepreneurs: have confidence, problem-solving skills, motivation, people skills, and determination.
   3. Land

      Nota:

      • Land - the natural resources of the world. Example: water, air, and plants
   4. Labour

      Nota:

      • Labour - The people employed by a business (the workforce) to make the product.
3. Wealth Creation

   Nota:

   • Wealth is created by a business by adding value to a product as it goes through the production process.

Nota:

• Businesses belong to different sectors of industry.

1. Primary

   Nota:

   • Businesses in this sector take raw materials from the ground. Example: agriculture and farming, fishing, mining
2. Secondary

   Nota:

   • Businesses in this sector use raw materials and make something with them. Examples: a car manufacturer, a builder, a cake baker.
3. Tertiary

   Nota:

   • Businesses in this sector provide a service. Examples: A fitness instructor, a hotel, a supermarket.

1. Private
   1. Sole traders
   2. Partnerships
   3. Private Limited Companies
2. Public
   1. National Government
   2. Local government organisations
3. Third
   1. Non-profit making organisations
   2. Social Enterprises

1. High quality good/service
2. Train employees
3. Customer care strategy
4. Complaints procedure
5. After-sale service

1. customer loyalty
2. good reputation
3. maximise sales/profit
4. increase market share

1. UK Parliament
2. Scottish Government
3. Local government orgs

1. Levels of Employment
2. Recession
3. Interest Rates

1. Opinions
2. values / beliefs
3. tastes / trends

1. Tablet computers
2. Wireless technology
3. Web 2.0
4. Cloud computing

1. Weather / climate
2. Environmentally friendly

1. more choice
2. cheaper price
3. more special offers
4. higher quality