AO2 : the role of business in combining human, physical, and financial resources to create goods and services
business : any organisation set up to provide goods and services
- aim to satisfy the needs and desires of their customers by selling a good or providing a service
factor of production
land : natural resources
labour : physical human effort and psychological intellect
capital : non-natural ( manufactured ) resources
enterprise : an individual with the necessary skills and ability to take risks in organising the other factors of production to generate output in a profitable way
value added : the process of creating a product that is worth more than the cost of the inputs used to product
- the process adds value to the final goods and services sold to customer
- business strive to add value to better meet the needs and wants of their customers
- value added is the measures as the different between the cost of input and the price of the final output
consumer : the people who use a good or service
customer: the buyer of a good or service
AO2: the main business functions and their roles
Human Resources : manage oversees staffs ( personnel ) within orgnization
Finance and accounts : to manage the organisation's money
marketing : responsible for identifying the needs and wants of its customers, and ensuring the organisation's good and services meet these demands in a profitable way
Operation: covers the process of making products from the available resources of the business
AO2: primary, secondary, tertiary and quaternary sectors and the nature of business activity in each sector and the impact of sectoral change on business activity
primary sector : refers to the business involvement in the extraction of natural resources and raw materials. value added is relatively low.
secondary sector: business engaged in manufacturing and construction to create finished usable products
tertiary sector : focus on providing a service to consumers and other business ( eg. hospital, banking )
quaternary sector : businesses engaged in the creation or sharing of knowledge or information ( eg: AI )
- sectoral change : shift the major output of primary sector to manufacturing then to tertiary and quaternary sector
AO3: the role of entrepreneurship and entrepreneurship in overall business activity
entrepreneurship: activity undertaken by individuals who can take calculated risks and initiative in the start-up of new business or commercial project
entrepreneur : someone who is willing to take financial risks by investing in a business idea. ( usually self-employed and develop products or service for their own benefits )
traits: time management, creativity, leadership, teamwork, business planning and risk management
intrapreneur: someone who develops new products or services within an organisation, usually a large one, for the benefit of the firm and its employers
have the same set skills as entrepreneur
their creative skills and innovative thinking can give the organisation a competitive edge over its rival
AO2: reasons for starting up a business or an enterprise
to be your own boss : for people who prefer freedom of decision making and meet their self-actualization needs on Maslow's hierarchy of needs
challenge: involve obstacles and opportunities that employees may not feel otherwise
interest and enjoyment : passion, for some the aim is not always profit
AO2: common steps in the process of starting up a business or an enterprise
have an idea
conduct relevant research
produce a business plan
determine a business structure
meet legal requirements
AO2: problems that new business or enterprise may face
poor market research: result in the product fails to meet the needs and wants of customers
financial problems : inability to raise sufficient start-up finance/ maintain liquidity. start up business often struggle to secure external source of finance of bank to fund their operation. --> cause limited budget for marketing
HR : struggle to recruit suitable and experienced employees
operation management: lack of relationship with supplier, which can cause delivery and distribution problems
AO2 : element of a business plan
business plan: a formal document that details how an organisation intend to meet its objectives. It adds substance to a business idea and help with strategic thinking and decision making
executive summary
business description : legal status and ownership, goals, objective, mission, vision
business environment: details of market/ industry which the firm operate ( SWOT, STEEPLE )
product description
marketing : projected sales figures and marketing opportunities
finance : balance sheet & income statement
operations : quality assurance, stock control, supply chain management, supplier networks
Human Resources: staffing and organisational chart
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