business chapter 1
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business chapter 1 - Leaderboard
business chapter 1 - Details
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| 🇬🇧 | 🇬🇧 |
| Internal trade | Domestic or home trade concerned with buying and selling of goods and services within the boundary of the country |
| Types of internal trade | 1)whole trade 2)retail trade |
| Whole trade | Purchased goods sold in bulk |
| Retail trade | Purchased goods sold in smaller quantity for final consumption |
| External trade | Exchange of goods and services between persons operating in 2or more countries. |
| Types of external trade | 1)import trade 2)export trade 3)entrepot trade |
| Import trade | Goods purchased from another country |
| Export trade | Sold to other countries |
| Entrepot trade | When goods are imported for export to other countries |
| Auxiliaries to trade | 1)transport communication 2)banking and finance |
| Auxiliaries to trade | -insurance -ware housing |
| Auxiliaries to trade | -advertising -education |
| Purpose of business | -acquire resources -Prouductivity |
| Purpose of bussiness | -Market standing -co-ordinating and motivating workers |
| Purpose of business | -Profit earning -responsible to society |
| Transformation process | An activity that takes input transforms them and produces outputs for customers |
| Transformation process includes | 1)input 2)output 3)transformation process |
| Input includes | -land -labor -intellctual capital -capital |
| Land | Location of the bussiness |
| Labor | The amount of physical and mental efforts put in the creation of goods and services |
| Capital | Money invested in the business |
| Intellectual capital | Intelligence of the workforce |
| Transformation process | -Changing the characteristics of materials, information and customers. -Changing the location of materials, information and customers. -changing ownership of material |
| Changing the characteristics of materials, information and customers. | Material: converting raw materials into finished products information:accountants take receipts and vouchers and making sets of accounts customers: beauty salon and cosmetic surgeons changing peoples appearance |
| Changing the location of materials and information | Ships and air transports peoples goods from 1 place to another google helps to change location and information |
| Change ownership of materials | Whole sellers buy in bulk from number of producers selling it to retailers |
| Output | Form of goods and services or combination of both |
| Good | All the tangible items made to be sold and can be produced in advance and store them |
| Service | All the action and facilites given to consumers |
| Creating value | Value is created when outputs produced are worth more than inputs |
| Adding value | Increasing its created value |
| How can a manufacturing business add value? | 1) ensuring best price for raw materials 2)increasing benefit of the product in the eye of the customer 2) reducing mistake and wages |
| Factors effecting business enviroment | -internal factor -external factor |
| Internal factors | -Production: production process, equipment used -Personnel: staff pattern,customers |
| Internal factors | -Finance: source -marketing: promotion, pricing |
| External factors effecting business | -Political and legal factors: political parties can influence the business and new laws by the government. -Economic factor: the amount of income in an economy can change the demand of a prooduct. |
| External factors affecting business | -social factors: attitiude and culture of people (education influences the business) -Technological factors: the advancement of technology will affect the business |
| How business make up an important part of the economy? | -Provide goods and services -Provides job oppurtunites -Improves standard -genertaes more income to the nationeconomy if doing well |
| Why do business fail | -Lack of experience -Poor dealing with customers -Poor finance managment |
| Entrepreneur | Is someone who is willing to take a risk to start a new project or a new business. |
| Enterpice | Skill needed to make a new idea or work |
| Serial entrepreneur | A Person who has an idea for new business and sets up many business |
| Social entrepreneur | Those entrepreneuer who do not have profit as there main objective |
| Qualities of entrepreneur | - very hard working -willing to take risk -very quick thinking |
| Why become an entrepreneur | -will be your own boss -will control the business |
| Why become an entrepreneur | - can keep the profit - experience good feelings |
| Why government likes entrepreneur | - creating jobs for unemployed people -increasing earnings of country -pay taxes to the government |
| How can the government help entrepreneur | -giving legal protection to new ideas - giving advice and useful information |
| Entrepreneurial culture | -entrepreneurs that are highly valued and respected in that country -environment encourages and helps them set new business |
| Opportunity cost | When you decide one course of action you are sacrificing something else or another course of action. |
| Resource scarcity | Limited number or resources |
| Choice | Substitutes (choose best choice) |
| Tripple bottom line ( business performance should be measured in 3 positions) | -Profit: reward of business -planet: impact on planet -People: treatment of people |
| Business | An economic activity involving purchase, production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs in society. |
| Nature of business | 1.Business is an economic activity. 2. It includes production or procurement of goods and services. 3. It includes sale or exchange of goods and services with value. |
| Nature of business | Dealings in goods and services on a regular basis. Profit earning. Uncertainty of return. Element of risk. |
| Economic activities may be divided into three major categories | -Business -Profession -Employment |
| Profession | It includes those activities which require special knowledge and skill in their occupation |
| Examples of profession | -doctors -lawyers |
| Employment | It refers to the occupation in which people work for others and get remunerated in return. |
| Business classification | -industry -commerce |
| Industry | Economic activities connected with conversion of raw-material into finished products. |
| Commerce | Trade and aids to trade. |
| Trade | Buying and selling goods |
| Aids to trade | Support services of trade |
| Types of industries | Primary secondary tertiary |
| Classification of trade | Internal trade external trade |