Higher Business

What is a good?

Things we can see an touch

What are durable goods?

Goods that can be used again and again

What are non-durable goods?

Things we can normally only use once

What is a service?

Things that’s are done for us and can be described as a non-tangible product

What are the 4 factors of production?

• Capital

• Enterprise

• Labour

• Land

What is the Capital factor of production?

There are man made resources. we can use it as an economic term to describe things such as factories, machines, Lorries and tools. They have all been created or produced from natural resources that are needed to produce goods and services.

What is the Enterprise factor of production?

This capsule be described as the most important factor of production as without it production it would not take place. The entrepreneur is the person who brig together all the other resources and takes the risks to produce the goods or services.

What is the Labour factor of production?

It is the people required to make the organisation work. All businesses need people to work for them. Some will only need a few while local governments who’ll need thousands. It includes all their physical and mental effort.

What is the Land factor of production?

This is Al the natural resources such as oil, water and the land itself. It included everything that canne extracted from the land or in the sea. It can also include sunshine which is used with solar panels to create electricity.

What are the 4 sectors of industry?

• Primary

• Secondary

• Tertiary

• Quartanery

Describe and give one example of the secondary sector of insustry

• The secondary sector focuses on the manufacturing side of the raw materials taken form the primary sector.

• Example: Manufacturing industry

Describe and give one example of the secondary sector of insustry

• The secondary sector focuses on the manufacturing side of the raw materials taken form the primary sector.

• Example: Manufacturing industry

Describe and give one example of the Tertiary sector of industry

• The tertiary sector is the service sector.

• Example: hairdressers

Describe and give one example of the Quartanery sector of industry

• The Quartanery sector is the AI / technology / research sector.

• Example: Scientist

What is a growth method / why would businesses want to use them?

A method used to make a business become larger, take advantage of economies, have power, make profit and become more efficient through having lower costs.

What are the TWO diffrent types of growth methods?

Internal & External

What some INTERNAL methods of growth? (6)

• Organic

• Diversification

• Increasing advertising

• Increasing staffing

• Opening new branches

• Becoming a multinational company

What are some ADVANTAGES of ALL internal growth methods? (5)

• No loss of con of businesses as no outsiders are involved

• Hiring new staff encourages new ideas

• Investing in new equipment increases production capability

• Opening new branches means entering a new market

• Less risk is involved due to lack of outsiders

What are some DISADVANTAGES of ALL internal grown methods? (3)

• Lengthy process due to organisation’s involved

• Limited by the size of the market

• Restricted by the amount of finance available

What are some EXTERNAL methods of growth? (6)

• Horizontal integration

• Vertical integration (forwards & backwards)

• Lateral integration

• Conglomerate

• Out sourcing

• Franchising

What is Diversification?

Diversification is when firms move into new markets that are different from their core business.

What are some ADVANTAGES of diversification? (2)

• Spreads risk across different markets which reduces risk of failure

• Targets new markets which increase the customer base

What are some DISADVANTAGES of diversification? (3)

• Entering new markets may affect core activities (what they already do)

• May not have the knowledge required to successfully run the new business

• Costly to research and advertise in new markets