Fichas
Business activity
Fichas del conjunto (79)
- 1What are the Factors of Production?Land, labour, capital & enterprise. All of these 4 are the resources used to produce goods and services
- 2Definition of landNatural resources on the planet e.x: broccoli/fish, cows, diamond, cool, trees/flowers, ground/area, hills, seas, air, water...
- 3Definition of labourIs the human input (workers, managers...) Human capital: levels of skills, qualities & qualifications e.x: teachers, security, chefs, cleaner, bus driver
- 4Definition of capitalMan made physical goods used to produce other goods and services e.x: machines, computers, tools, roads, kitchen equipment, school bus, furniture...
- 5What are investmentsInvestments are increases in the level of capital
- 6Definition of enterpriseThe entrepreneur provides the original idea: they risk their own resources: they organize the 3 factors of production e.x: Miss Tessa, Mr Ray
- 7What is the added value?Is the difference between selling price of a product and the cost of bought in materials and components.
- 8Added valueInput: 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 - 9Definition of opportunity costThe next best alternative you have to give up is the opportunity cost
- 10What are the stages of economic activity?Primary, secondary & tertiary
- 11Definition of primaryExtracting natural resources e.x: extracting coal, oil, iron, gas.
FORESTRY - 12Definition of secondaryManufacturing e.x: aircraft, assembly, vehicles, white goods, dishwasher.
TRAVEL AGENT - 13Definition of textServices e.x: health, educating, banking.
BAKERY - 14Qualities needed in an effective entrepreneur?-imagination/ creativity
-goals
-hard-working
-experience
-patience
-resiliance(=determination)
-original ideas
-money?
-confidence
-smart
-taking calculated risks
-ambition - 15Definition of Specialization and Division of labourWhere the production process is split up into different tasks and each worker performs one of these tasks
- 16Advantages of Specialization and Division of labour-quicker
-no swapping of tools
-staff become expert in one task
-less skills needed
-allows for more machinery - 17Disadvantages of Specialization and Division of labour-if someone is absent, production may stop
-boredom for staff: repetitive
-one person can hold up production - 18What are the types of economy?Planned & free market.
- 19Definition of plannedThe government own and control businesses and organisations
- 20Definition of free marketPrivate individuals own and control businesses and organisations
- 21Examples of Private sector-private schools
-taxis
-shops
-banks
-restaurants
Most countries have mixed economies with a private an public sector - 22Examples of public sector-state hospitals
-courts of law
-buses/train
-army
-correos
Most countries have mixed economies with a private an public sector - 23Why do businesses want to grow?-bigger market share
-more profits
-credibility (bigger, better known)
-market power
-expanding the brand
-spread risks
-economies of scale - 24How do businesses grow?Internal/Organic Growth & External Growth
- 25Definition of Internal/Organic GrowthWhen a business expands by increasing the size of its operations e.x: opening more outlets, shops, factories
- 26Definition of External GrowthWhen a business grows by joining with or buying another business (merger or takeover)
- 27What is Horizontal Integration?When firms at the same stage of production process to join together e.x: brewery = brewery
- 28What are the types of Vertical Integration?Vertical Backward Integration & Vertical Forward Integration
- 29Definition of Vertical Backward IntegrationWhen a firm joins with another firm at an earlier stage of the production process
e.x: hop farm = brewery - 30Definition of Vertical Forward IntegrationWhen a firm joins with another firm at an later stage of the production process
e.x: brewery = PUB/Bar - 31What is Conglomerate?Joining with firms in a different industry. Diversification e.x: virgin mobile, virgin money, virgin airplane
- 32What is De-industralisation?This happens when there is a decline in the importance of the secondary sector in a country
- 33Problems 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 - 34Why 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 - 35Ways of Comparing Business Size?Labour Intensive & Capital Intensive
- 36Definition of Labour IntensiveUses more workers relative to machinery in the production process
- 37Definition of Capital IntensiveUses more machinery relative to worker in the production process
- 38Ways of Measuring Sizes of Businesses?-Number of workers
-Value of output
-Value of capital employed
-Level of sales - 39what is meant by Number of workers?How many people are employed
-Some businesses are large, but capital intensive
-means limitations - 40What 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 - 41What is meant by Value of capital employed?Money invested into the business in assets
-Some businesses are large, but labour intensive - 42What is meant by Level of sales?Measures sales turnover/revenue
-some firms sell more, but at lower prices - 43Why 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 - 44Why 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 - 45What 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 - 46What are the Private Corporations?Sole traders, partnerships, franchises, LTDs & PLCs
- 47Define Sole Trader?Owned and operates by 1 person
- 48Advantages 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) - 49Disadvantages 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 - 50Define partnership?Owned by 2 to 20 people
- 51Advantages of partnership?-partners will invest
-responsibilities and decisions can be shared
-more skills available - 52Disadvantages of partnership?-unlimited liability
-legal costs if a deed of partnership is required
-possible arguments - 53What is a Private Limited Company? (LTD)A company owned by at least 2 shareholders and shares are sold privately to friends and family
- 54Advantages of LTD?-can get money by selling shares
-death and illness won't affect the running of the company
-limited liability - 55Disadvantages of LTD?-shares can be sold on the stock market
-more expensive to set up
-have to share profits, by paying dividends - 56What is a Public Limited Company? (PLC)Private business which shares are sold to the public on a Stock Exchange.
- 57Advantages 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 - 58Disadvantages of PLC?-firm can be taken over (if you buy 51% of the shares)
-accounts are not private
-more expensive to set up - 59Limited 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 - 60Unlimited 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 - 61What's a franchise?A franchise is the right to offer the concept and sell the product of an existing business
- 62What's a franchisor?The franchisor is the owner of the original business that sells the franchise
- 63What's the franchisee?The franchisee buys and operates the franchise, they have to continue to pay a set fee or a % of the profit
- 64Advantages 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 - 65Disadvantages of franchisors?-franchisee keeps profits from the outlet
-poor management of one outlet might end to a bad reputation for the whole business - 66Advantages 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 - 67Disadvantages 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 - 68What 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 - 69Advantages 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 - 70Disadvantages 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 - 71What's a stakeholder?Anyone who has an interest in a business
- 72Advantages of setting businesses?-help motivate the workers (they have something to aim for)
-help managers make decisions
-SMART objectives unite the business - 73What 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) - 74What are Public Corporations?They are large businesses owned by the government
- 75Who manages the PC?The government sets objectives, but they appoint a board of directors to manage it
- 76Advantages 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 - 77Disadvantages 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) - 78Why 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 - 79Objectives of Public Sector businesses?-provide a service & improve quality
-make profits to reinvest in the organisation or other public sector businesses
-provide jobs
Información
- Descripción
- 3º de ESO (Topic 1: Understanding business activity) Business Fichas sobre Business activity, creado por Carmen Diaz el 26/04/2018.
- Creado por
- Carmen Diaz
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