business chapter 2
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business chapter 2 - Leaderboard
business chapter 2 - Details
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| 🇬🇧 | 🇬🇧 |
| Define secondary bussiness | Using materials which have already been extracted by the primary stage |
| Secondary bussiness are divided into | Manufacturing industries construction industries |
| Define manufacturing industries | Are engaged in producing goods through processing of raw materials |
| Manufacturing industries are divided into four | Analytical industry assembling industry synthetical industry processing industry |
| Analytical industry | Analyses and separates different elements from the same materials oil refinery separates crude oil into kerosene |
| Synthetical inustry | These industries put together two or more materials to form a new product plastic, gypsum, concrete and coals mixed to produce cement |
| Processing industry | Different stages for manufacturing finished products sugar industry |
| Assembling industry | Assembles different components parts to make a new product television |
| Construction industry | Construction of building , dams , bridges and roads , tunnels . engineering and architectural skills are needed for this work. |
| Service industry (tertiary sector) | Providing support services to the primary and secondary industry banking retailing tourism hotel advertising education |
| Private sector | Business that are owned by private individuals that are in private sector supermarket and beauty salons |
| Public sector | Business that are owned by the government that are in private sector electricity , water , health , education |
| Nationalization | Occurs when the government takes ownership of a business from the private sector into the public sector |
| Privatization | Occurs when the government takers ownership of a business from the public sector into the private sector |
| Merit goods | Goods and services provided for free for the benefit of the entire society by a government public parks |
| Business organization and its legal structures (private sector) | Sole trade partnership companies co-operatives franchise joint ventures |
| Sole trader | Where a person is solely responsible for providing capital bearing the risk and management of the business. |
| Advantages of sole traders | Setting up business is easy direct contact with market make quick decisions and respond rapidly to changes in market |
| Disadvantages of sole trade | Limited sources of finance unlimited liability may work long hours and limited holidays rely heavily on your own ability to make decisions |
| Unlimited liability | When an individual or group of individuals are personally responsible for all the actions of their business. |
| Partnership | If you set up a business together with other people |
| Partnership deed | Document which terms and conditions regarding the conduct of partnership business |
| Advantages of partnership | Can share resources ideas and skills , workload more sources of finance than sole trade can manage if someone is ill or on holiday |
| Disadvantages of partnership | Have to share profits have many disagreements or conflicts over decision unlimited liabilty |
| Company | Is a business organization which has its own legal identity and limited liability |
| Ownership | Company owned by shareholders each share represents part of the company more share someone owns the more the company belongs to them |
| Legal identity or status | Company is separated from its owners. company can own any property equipment and other goods in its own rights and responsible for its debts . business must have its accounts checked annually by auditors account must be made public |
| Limited liability | If company fails shareholders can lose the money they have invented into the business but their personnel possessions are safe |
| Incorporation | Is the process to set up a company and the owners have to complete various documents and register the business at companies house . |
| Memorandum of association | States the name of the company address of the head office through which it can be contacted maximum share capital which the company seeks authorization and declared aims of business |
| Articles of association | A document that covers the internal workings and control of the business |
| Dividends | Money that is paid out to shareholders /reward to the owner of the business |
| Company is divided into two | Private limited company public limited company |
| Private limited company features | Have "LTD" after their names minimum of 2 and maximum of 50 mem more easy to form private company than public |
| Public limited company | "plc" after their names minimum of 7 no limit on maximum owned by shareholders shareholder in plc can sell their share through stock exchange |
| Co-operatives | Working together for a common purpose has limited liability |
| Different form of co-operatives | Employee co-operative community co-operative retail co-operative |
| Employee co-operative | When the business is owned equally by all the employee working there |
| Community co-operative | Owned by the members of a community to provide local services such as postal , bus service |
| Retail co-operative | Occurs when independent retailers join together and operate under one brand name food , hardware |
| Franchise | Continuing relationship in which the franchisor provides a licened privillage to the franchisee to do business and offer assistence in organizing training merchandising in return of monetery consideration dominos ,subway |
| Elements of franchise agreement | Franchisor sells the right o the product in return for the initial fee and percentage of franchisee turnover sales the franchisee receives the right to use the name logo and system used by the franchisor |
| Payment for franchisee | Franchise free + percentage of turnover profit |
| Advantages of buying a franchise | Have support and experience from the franchisor helps choose suppliers reduce the risk of setting up on your own |
| Disadvantages of franchise | Reduces profit we make initial license fee can be expensive no choice of suppliers |
| Benefits of franchisor | Benefit from the income generated by the franchisee leads to more motivated managers bec they r running their own store |
| Drawbacks of franchisor | Loss of ownership loss of flexibility loss of confidentiality |
| Joint ventures | When two business agree to join together for a common purpose and mutual benefits |
| Benefits of joint ventures | Can share skills and experience resources and expertise less difficult to manage less expensive bec not merging fully |
| Difficulties of joint ventures | Decision making disagreements over contribution of each business |