IB Business Unit 1

studied byStudied by 25 people
5.0(1)
Get a hint
Hint

Adding Value

1 / 57

58 Terms

1

Adding Value

The process of enhancing a product or service to increase its worth or appeal to customers, often through improvements in quality, features, or functionality.

New cards
2

Businesses

Entities that engage in commercial activities and aim to generate profit by providing goods or services to customers.

New cards
3

Consumers

The ones who actually use a product.

New cards
4

Customers

The ones who purchase the product, not necessarily using it.

New cards
5

Entrepreneurs

Individuals who start and manage their own businesses, taking on financial risks in order to pursue opportunities and create innovative solutions in the market. They are driven by a strong desire for independence, success, and the ability to make a positive impact on society.

New cards
6

Entrepreneurship

The collective knowledge and experiences of entrepreneurs, and the process of starting and running one’s own business.

New cards
7

Goods

Specific items that one can physically purchase/use.

New cards
8

Needs

The basic necessities that a person needs to survive.

New cards
9

Primary Sector

Business involved in the cultivation/extraction of natural resources.

New cards
10

Secondary Sector

Businesses that are involved with the production and manufacturing of certain products.

New cards
11

Tertiary Sector

Businesses involved with the provision of services.

New cards
12

Quaternary Sector

A sub-category of the Tertiary Sector that offers knowledge based services to the general public.

New cards
13

Services

Intangible products sold to costumers.

New cards
14

Production

The process of creating goods and/or services, adding value in the process.

New cards
15

Wants

specific things one would like to have.

New cards
16

Inputs

  • Capital

  • enterprise

  • land

  • labour

New cards
17

Processes

*add Value to item

  • H.R

  • Finance

  • marketing

  • Operations management

New cards
18

Outputs

  • the Good or Service

New cards
19

Functional Areas of Business

  • H.R, responsible for workforce

  • Finance, responsible for gaining capital/and staying in legal boundaries

  • marketing, responsible for finding what the costumers are looking for and how to sell it

  • operations management, responsible for overlooking workforce operations/practices

New cards
20

4 P’s + 3 P’s of Marketing (7 P’s)

  1. product

  2. price

  3. place

  4. promotion

  5. people

  6. processes

  7. physical evidence

New cards
21

Chain of Production

  1. extraction

  2. Manufacturing

  3. services

  4. consumers

New cards
22

Extraction

Primary Sector’s purpose, obtain raw materials

New cards
23

Manufacturing

Secondary Sector, convert raw materials into a product

New cards
24

Services

Tertiary, or Quaternary

New cards
25

Cooperatives

for-profit social enterprises that are run by their own members, employees, and/or customers of a certain status in the company that work towards the business goal.

New cards
26

Company/corporation

a limited liability business that is owned by shareholders

New cards
27

Incorporation

There is a difference between the owners of a business and the company itself

New cards
28

Initial Public Offering (IPO)

When a business sells its stocks for the first time on the stock exchange.

New cards
29

limited liability

a restriction on the amount of money that an owner can lose if the business claims bankruptcy.

New cards
30

non-governmental organizations (NGO’s)

private sector not for profit social enterprises that operate for the benefit of others.

New cards
31

partnerships

private sector businesses owned by an entity of 2 or more people

New cards
32

private sector

part of the economy run by private individuals and businesses rather than the government

New cards
33

privately held company

a business owned by shareholders, with limited liability but who shares can’t be bought by or sold to the general public. shareholders have to be approved by the business owners.

New cards
34

public sector

owned by the government

New cards
35

sole trader

self-employed person who runs a business on their own

New cards
36

unlimited liability

you can lose any/everything

New cards
37

deed of partnership

the legal documents that are signed claiming you are in a partnership with another

New cards
38

social enterprises

revenue generating companies with social objectives

  • make a surplus

  • use the surplus to benefit a part of society (TOMs)

New cards
39

Hierarchy of objectives

provide businesses w/ a targeted direction for the future

vision/mission/strategies/tactics

New cards
40

Strategic Objectives

  • market standing: how much presence the company has in the industry

  • image: consumer beliefs and conceptions of a firm

  • market share: firm’s revenue as a percentage of all that’s made in the industry.

New cards
41

Corporate social responsibility (CSR)

the conscientious consideration of ethical and environmental practice related to business activity.

New cards
42

Stakeholders

anyone who has a direct interest in your company!

internal and external

New cards
43

internal stakeholders

members of the firm. employees, managers/directors, shareholders (those with stocks)

New cards
44

external stakeholders

anyone has an interest in a company’s succession, good or bad! Customers, Suppliers, financiers (banks), pressure groups, competitors

New cards
45

Economies of scale

when the avg. cost of production decreases as the organization increases the size of its operations

New cards
46

Diseconomies of scale

when a company becomes to large it has production inefficiencies and avg. costs increase.

New cards
47

internal economies of scale

inside the firm/within the firms control

  1. technical, machinery and mass production

  2. financial, borrow large sums from banks with lower interests

  3. managerial, experienced managers

  4. specialization, specialized labour

  5. marketing, sell items in bulk, advertising

  6. purchasing, buy resources in bulk, some discounts

  7. risk-bearing, some risks are covered by other areas of benefit

New cards
48

external economies of scale

the entire industry

  1. technological progress, innovation

  2. improved transportation networks, better infrastructure=better for economy

  3. abundance of skill, training facilities and education

  4. regional specialization, certain countries are known for certain specialites

New cards
49

external diseconomies of scale

  1. high rent

  2. local market conditions

  3. traffic

  4. context specific problems

New cards
50

Internal growth

a business grows by using its own capabilities and resources

New cards
51

external growth

growth through dealing with the outside organizations

New cards
52

WHY Grow?

economies of scale, lower prices, brand recognition, customer loyalty

New cards
53

WHY stay small?

cost control, more control, financial relief, government aid, flexibility

New cards
54

external growth methods

  • mergers and acquisitions (m & a’s)\

    merger= 2 firms combine

    acquisitions= 1 company buys another with agreement of board

  • Takeovers (hostile takeovers)= company buys another without the agreement of the boards

  • Joint Ventures (JV’s)= 2 companies split costs and risks, for a specific amount of time

  • Strategic alliances (SA’s)= 2 or more firms cooperate in a business venture for mutual benefit

  • Franchising= person/business gets a license to trade using another firm’s name

    Franchisor, sells

    Franchisee, buys

New cards
55

Multinational company (MNC)

an organization operating in 2 or more countries

New cards
56

Host country

the countries that let a multinational company work there

New cards
57

Gross domestic product (GDP)

the value of a country’s annual output or national income

New cards
58

protectionist policies

measures imposed by a country to reduce the competitiveness of imports (tariffs)

New cards

Explore top notes

note Note
studied byStudied by 7 people
... ago
5.0(1)
note Note
studied byStudied by 74 people
... ago
5.0(1)
note Note
studied byStudied by 32 people
... ago
4.5(4)
note Note
studied byStudied by 75 people
... ago
5.0(1)
note Note
studied byStudied by 13 people
... ago
4.0(1)
note Note
studied byStudied by 54 people
... ago
5.0(2)
note Note
studied byStudied by 13 people
... ago
5.0(2)
note Note
studied byStudied by 132 people
... ago
5.0(1)

Explore top flashcards

flashcards Flashcard (65)
studied byStudied by 16 people
... ago
5.0(2)
flashcards Flashcard (90)
studied byStudied by 46 people
... ago
5.0(1)
flashcards Flashcard (106)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (31)
studied byStudied by 56 people
... ago
5.0(2)
flashcards Flashcard (44)
studied byStudied by 10 people
... ago
5.0(1)
flashcards Flashcard (54)
studied byStudied by 2 people
... ago
5.0(1)
flashcards Flashcard (52)
studied byStudied by 2 people
... ago
5.0(1)
flashcards Flashcard (35)
studied byStudied by 15 people
... ago
5.0(1)
robot