IGCSE Business Studies Chapters 1.1 - 1.4 Review

Flashcards testing concepts, definitions, quantitative facts, and exam scenarios from IGCSE Business Studies Chapters 1.1 to 1.4.

What is the primary sector of business activity and what activities does it include?

The extraction of natural resources from the land. Activities include farming, mining, fishing, woodcutting, and coffee picking.

What defines the secondary sector of business and what are some examples?

The manufacturing of goods using resources taken from the primary sector. Examples include car manufacturing, steel refining, cloth production, and coffee roasting.

What is the main characteristic of the tertiary sector and what examples are given?

Providing non-physical services or experiences rather than touchable products. Examples include banking services, investment services, hotel services, travel agencies, and hair salons.

What are the main objectives of private sector businesses, and what are three named examples?

To make profit, expand, and increase market share. Examples include Apple, Adidas, and Tesla.

What are the primary aims and examples of public sector organisations?

To meet government macroeconomic targets, provide public services, provide free and affordable services, and benefit society. Examples include Indian railways, public libraries, schools, and hospitals.

What are the key characteristics required of a successful entrepreneur?

Being a risk taker, creative and innovative, optimistic and self-confident, independent, an effective communicator, and hard working.

What key information is contained within a Business Plan?

A business objective, details about operations, finance, and owners, as well as identified assets and estimated short- to medium-term costs.

What can governments do to offer support to business startups?

Offering lower rent, access to cheap loans (lower interest rates), grants (free money), government-provided training, and tax breaks.

How do horizontal, forward vertical, backward vertical, and conglomerate integrations differ?

Horizontal: merging with a firm at the same production stage in the same industry. Forward vertical: merging with a firm at a stage ahead in the same industry. Backward vertical: merging with a firm at a stage behind in the same industry. Conglomerate: merging with a firm in a completely different industry.

What is the relationship between a franchisor and a franchisee?

The franchisor is the owner of the main business who grants a license; the franchisee is the business or person buying the license to use the business idea, paying fees and a share of profits.

What is the distinction between a Private Limited Company (Ltd) and a Public Limited Company (PLC) regarding share sales?

A Private Limited Company can only sell shares to friends and family, whereas a Public Limited Company can sell shares to the general public on the stock market.

What is the difference between an unincorporated business and an incorporated business?

An unincorporated business has no separate legal identity and owners have unlimited liability. An incorporated business has a separate legal identity and limited liability.

What advantage and disadvantage of becoming a private limited company were identified?

Advantage: limited liability, which protects personal assets from the restaurant. Disadvantage: investors expect dividends to be paid as a return on their investment.

what are the pros and cons of being a sole trader?

Pros: Full control, low setup cost, simple paperwork

Cons: Unlimited liability, all the work falls on you, harder to get funding, high risk

what are the pros and cons of being a partnership?

Pros: Shared workload, better decision-making, simple and low set-up costs

Cons: Unlimited liability, potential for conflict, shared profits

What is unlimited liability?

the business and the owner are treated as one entity

What is limited liability?

the business and the owner are treated as two seperate entities

what are the pros and cons of being a PLC (public limited company)?

Pros: Limited liability, high credibility, business continuity

Cons: vurnerable to hostile takeovers, no financial privacy, high set-up requirements

what are the pros and cons of being a LTD (private limited company)?

Pros: Limited liability, high coorperate credibility, tax-efficiency

Cons: high set-up requirements, strict legal responsibilities