Business

Factors of productions

Land- natural resources used in production

Labour- the workforce used

Capital- manmade resource used to produce product/service

Enterprise-idea entrepenuer had to create business

Wealth creation

Where value is added to the product at each stage of the production process.

The total value of a finished product is worth more than the raw materials used to produce it.

Sectors of industry

Primary-Exctraction of raw materials/resources from land

Secondary- Manuafacturing resource into product

Tertiary-providing a service

Sectors of ecomony

Private-private business owned by individuals

Public-Owned by gov funder through tax

Third- charity owned by trustees funded via donations

Sole Trader Advantages, Disadvantages

Owned by 1 person, financed by personal savings bank loans etc

+Gets to keep all profit

+Makes all decisions

-Unlimited Liability, belongings can be taken if in financial trouble

-Heavy Workload

Partnerships Advantages and Disadvantages

Owned by 2-20 people, financed by personal saving and bank loans

+More ideas/skills

+Shared workload

-Unlimited liability, personal belonging can be taken if in financial trouble

-Profit shared between partner

Private Limited Company Advantages and Disadvantages

Owned by shareholders,Controlled by board directions financed by selling shares, bank loans and profit

+Easier for business to raise money

+Owner can retain control

-High set up cost

-Hard to motivate/control workers

Objectives

Profit max-focus on making as much profit as possible

Growth-get bigger

Survival- keep long term operation

Customer satisfaction-ensure customers are well

Providing a service -give service to public

External Factors

P-political

E-economic

S-social

T-technological

E-enviromental

C-competitive

External Factors , Political

Ex-Taxation, Laws,Political Stability

Impact-Gov can lower/raise tax,National minimum wage can rise

External Factors , Economic

Ex-Economic growth,Interest rates,inflation

Impact,interest rates company will save more borrow less, inflation more money on supplies

External Factors, social

Ex-Tastes and trends

Impact,people may not want product anymore to old or just not in fashion

External Factors , Technological

Ex-ICT,E-commerce, automation

Impact,invest in newest software,online websites,better machinery

External Factors, enviromental

Ex-Physical Conditions-climate change and gree credentials-recyling, pollution

External Factors,Competitive

Ex, Imitators and price wars

Impactrival organisations can cause price loss due to copy , company lowers price and others have to match

Internal Factors

Human resources

Finance

Technology

Internal Factors, Human Resources

Mangers Influence,Decision making,Creating policy managing,Hiring and firing employees,Setting Budgets

Employees influence, Productivity ,satisfy customers,training industrial

Internal Factors, Financial

Reasons for finance,Developing new products,Upgrading new software, Wage rises,Hiring new staff, advertising

Impact,expand,grow to increase market share, without finance can be held nack and struggle to survive

Internal Factors, Technology

Ex-Video Conferencing , quality hardware, specialist software,use of social media, apps

Impact, remote meetings,used to spread aware about products,up to date tech to keep up with competitors

StakeHolders, Internal And External

Internal,Owner/Shareholders,Employees

External,Customers, Bank, Government, Suppliers, Local Community

Stakeholders, interst

owner-Make profit

employee-job security,good working conditions,higher pay

Bank-ensure loan payed back,

Customer-good product cheap price

Suppliers-regular orders,be paid quick

Local community-safe enviroment,bring jobs

Gov-pay corporation,firms to create jobs

Market Segmentation,segments

Age

Gender

Location

Ocupation

Religion

Lifestyle

Benefits of market segmentation

Allows business to establish target market

Products are made to suit certain segments

Allows correct price to be charged for different market segments

Place products are sold at will be appropriate for the group targetted

Promotion can be targeted st specific segments

Market research and methods

Field Research(primary)

Hall test,online survey,telephone survey,postal survey,focus group ,FTFI

Desk Research(secondary)

Sales figures,government publications,commercial publications, newspapers, websites

Field Research Advantages,Disadvantages

Advantage

Data is targeted to specific business needs

Only organisation has access to info

Up to date

Disadvantage

Can be time consuming

Expensive

Very narrow

Desk Research , advantages and disadvantages.

Advantages

Savea time,relatively inexpensive,widely availabls,easy to collect

Disadvantages

Not gathered specifically for business needs,may be out of date,may contain bias

Product Development stages

Generate the idea

Analyse the ideas

Produce the prototype

Test the prototype

Alter the product

Produce the product

Product life cycle

Research and development

Introduction

Growth

Maturity

Decline

Branding advantages and disadvantages

Advantages

Easily recognised,easier to launch new products,brand loyalty,pay more for branded product,branded=high quality

Disadvantages

Time consuming and expensive to develop well know brand,one bad product can ruin rep,can be copied

Packaging advantages and disadvantages

Advantages

Provides customer appeal,provides protection,helps keep goods fresh,recogniseable

Advantages

Cost of producing packaging,enviromental impact, poor packaging, poot packaging bad for image

Factors to consider when setting a price

Competition-Charge price to matcg rival

Product Quality/Image-consider quality of product

Production cost- charge more than what it cost to produce

Selling location-more up-marker more expensive

Price customer will pay-only pay for what they think is a good price

Pricing Strategies

Cost plus pricing-calc cost + percent

Penetration- low price new marker and then gradually increase

Psychological - 0.99p

Promotional-price reduce short period

Market skimming-high price gradual reduce

Discrimination-Different price different time of year

Factors to consider when choosing a location

Type of business-near the right customers

Footfall-alot of people near

Finance-busy high street will cost more

Competitors-more customer if more rival

Exclusivity-only org in area

Infastructure-Locate area with good transport links,utilities etc

Advantages and Disadvantages of E-commerce

Advantages

can acces 24/7,allows access to in different region,shop from home,display wide range

Disadvantages-Time delay between order and delivery,unable to try product, credit card security issues,time consuming

Methods of distribution

Road

Rail

Air

Sea

Methods of distribution, Road, advantages and disadvantages

Advantages

Door to door , one of cheapest delivery

Disadvantages

Difficult to transport large quantities,

Slower than other methods,pollution

Methods of distribution, rail, advantages and disadvantages

Advantages

Large volume goods, good for heavy and bulky items ,faster than others

Disadvantages

Stations not always close to businesses,

Additional transport methosld required,pollution

Encouraging sales 2 main areas

Advertising

Sales promotion

Methods of advertising

Tv

Radio

Cinema

Billboards

Newspapers

Online

TV advertising Advantage,Disadvantage

Advantages

Can reach wide audience

Can show demonstration

Disadvantages

Very exspensive

May not targer specific audience

Radio advertising, Advantages , Disadvantages

Advantage

Can reach a wide audience

Cheaper than TV

Disadvantages

Listeners may tune out

Only sound no demonstration

Cinema Advertising Advantages, Disadvantages

Advantages

Shows to captive audience

Can be matched to target audience

Disadvantages

Limited audience

Billboard Advertsing Advantages,Disadvantages

Advantages

Usually in busy locations

Can be cheaper

Can promote in specifc areas

Disasvantages

Passers may ignore

Information is limited

Newspaper Advertising Advantages and disadvantages

Asdvantages

Can target market segments

Readers may read many times

Disadvantages

Can be expensive

No demonstration

Online advertsing, Advantages, Disadvantages

Advantages

Relatively cheap

Can reach a globle audience

Disadvantages

High competition

Potential technical issue

Sales promotion methods

Special offers

Loyalty schemes

Free samples

Free gifts

Celebrity endorsements

Sales promotion examples

Special offer

Loyalty cards

Free samples

Free gifts

Celebrity Endorsements examples

More attracted to be like a celebrity

Higher price

Differentiates conpany from others

More chance of success

Ethical Marketing

An organisation must ensure they do not use obscene or offensive language in their advertising.

Whatever it promises must be there in the product - it must 'do what it says on the tin’.

Compant must ensure their complying with discrimination laws

Technology in marketing

Create an online shop, along with advertising

Desktop apps to produce high quality posters

Social media for reviews and psot marketing materials

Email for employees and customers

QR code acces goods quickly

Factors to consider when choosing a supplier

Price

Location

Lead time time, taken to deliver

Credit terms, longer to pay

Quality

Quantity

Reliability

Reputation

3 stages of inventory

Raw materials

Work in progress

Finished goods

Overstocking costs and benfits

Costs

Capital could be tied up

Inventory could go out of date

More difficult to to know whats where

Benefits

Allows unexpected orders

Allows buffer if supply chain issue occur

Understocking costs and benefits

Cost

Lack of materials to make product

Decline in sales

Customers not recieving orders on time

Will build rep for being unreliable

Benefits

Have more money to invest in other area

Reduces risk of inventory going spoiled

Computerused inventory control uses

Barcode Scanners-get info on product

Radio frequency identification (RFID)-use waves to track inventory

GPS-track parcels

Inventory management software-handle products and produce reports

Electronic Point-of-sale-record transactions

Advantages of Computerised inventory control

Eliminate manual errors, ensuring accurate inventory tracking and management.

Up-to-date inventory levels can be determined instantly.

Avoids over-stocking and under-stocking as inventory levels will be known at all times.

Reduces the need for inventory-taking, which might involve shutting down production.

Inventory can be re-ordered automatically when the re- order level is reached.

Can help to identify best sellers/non-movers.

3 Methods of production

Job

Batch

Flow

Job Production Advantages,Disadvantages

Advantage

High quality product

Can customise orders

Workers involved in entire production process

Disadvantages

Production costs likely to be high

Production time may be longer

Investment in machinery higher

Batch production Advantages,Disadvantages

Advantages

Cost-efficiency

Flexibility

Streamlined production

Quality

Disadvantages

Higher costs

Production time mag be longer

Less customisation

Flow Production Advantages,Disadvantages

Advantages

Lower unit costs

Consistent product quality

High efficiency

Quick production turnarounds

Disadvantages

Standardised product produced

Higher setup costs

Repetitive and boring for workers

Dependency on equipment

Factors that influence production choice

The type of product and quantity made

The level of customisation required

The level of skills required by workers

Benefits of ensuring quality

Customer satisfaction

Brand reputation

Competitive advantage

Cost saving

3 ways of ensuring quality

Quality materials

Quality control

Quality assurance

Quality materials Advantages,Disadvantages

Advantage

Good quality raw materials offer best opportunity of a good quality final product.

Using reputable suppliers can be used as a marketing tool

Disadvantages

may be more expensive.

Supplier has to be reliable.

Quality control Advantage,Disadvantage

Advantage

Reduces chance of poor quality

products reaching end users.

Only some employees need to be trained as inspectors to look for faults.

Disadvantage

Faults only found at the end of production.

High wastage costs.

Reworking faulty products costs time and money.

Quality assurance Advantage,Disadvantage

Advantage

Reduces waste, which saves money.

Results in zero defections.

Disadvantage

Can be costly due to regular checks.

Can slow down production, which means lower productivity.

Methods of ethical operations

Fair play

Dont use sweatshops

Improve working condition

No animal testing

Ethical operations Advantages,Disadvantages

Advantage

Improves brand image

Competitive advantage

More likely to attract high quality staff

Disadvantages

May have more expensive higher

Product may seem inferior

May have to pay staff more

Methods of enviromentally friendly operations

Investing in reneweable energy

Change packaging to eviroment friendly

Recycle wastage

Use timers on lights

Reduce transport

Enviromentally friendly operations Advantages,Disadvantages

Advantage

Make money from recycled turn into product

Improves brand image

Take less energy to recycle

Disadvantage

Takes time to sort

More expensicve

Recycled packaging can be poorer quality

Technology used in operations

computer aided design

computer aided manufacture

Robotics

Barcodes

Internet

Email

Stages of recruitment

Identify job vacancies

Carry out job analysis

Prepare job description

Prepare person specification

Advertise the job

Send out the application forms

Internal methods of recruitment

Organisation website or internet

Staff notice boards

Email/newsletters

External methods of recruitment

Online job board

Social media platforms

Profesional net works

Job centres

Recruitment agencies

Methods of selection

Application forms

CV

Refrences

Interviews

Testing

Assesment centres

Methods of selection Testing Advantage,Disadvantage

Advantage

See how candidate preforms

Get to know them better

Disadvantage

Be time consuming

Expensivw

Methods of selection Interviews Advantages,Disadvantage

Advantages

Personality and appereance can be seen

Content of application form can

Disadvantages

Time consuming

Interviewer bias can exist

Training Advantages Disadvantages

Advantage

Motivational for employees

Improves employees skill level

Fewer accidents

Attracts more candidates

Disadvantage

Time consuming

Costs money

Staff may want higher wages

Induction training Advantage,Disadvantage

Advantage

Familiarises with employees

Settle in quickly

Made aware of health and safety

Disadvantages

Takes time

Types of On-The-Job-Training

Coaching

Role play

Job rotation

Shadowing

Demonstration

On-The-Job-Training Advantages,Disadvantages

Advantages

Allows employees to learn from real world context

Helps build relationships with organisations

Disadvantage

Time consuming

Risk of passing on bad habits

Off-The-Job-Training Advantages,Disadvantages

Advantage

Quality of training is higher

Trainees are able to focus better

Disadvantage

Can be expensive

May have to higher others to cover absence

Benefits Of Motivated Staff

Increased pride in work

Better quality products/Service

Lower absenteism

Better company rep

Financial methods of motivation

Time Rate

Price rate

Profit sharing

Comission

Preformance related pay

Bonus

salary

Non-financial Motivation methods

Flexible working

Working enviroment

Fringe Benefits

Job rotation

Training

Promotions

Flexible working practices

Felxi-Time

Job Share

Hot desking

Home working

Condensed Hours

Part time hours

Benifits of flexible working working practices

Improved employee retention due to higher job satisfaction

Increased productivity

Enhanced recruitment

Increased loyalty and commitment

Benefits of a trade union

Gives employees a voice

Collective strengt

Protection and support

Training and Education

Types of industrial action

Sit in

Overtime ban

Work to rule

Go slow

Strike

Industrial action impacts Employer

Production stopped

No overtime=deadlines not being met

Less production =delay

Could get poor image

Reduction on staff moral

Industrial Action impact on employee

May recieve no income

Increase in salaries

Reduction in morale

May have to seek a new job

What are the charectoristics if the equality act

Age

Gender

Race

Religion

Pregnancy

Sexual oreintation

Health and safety at work act Employer

Provide health and safety to employees

Provide equipment

Make sure facilities reach safety requirements

Make sure hazardous materials are dealt with

Machinery should be adequately serviced

Health and safety at work act Employees

Take care of themselves and colleagues

Cooperate with health and safety procedures

Report illnesses

Report accidents or hazards

Technology In HR

Teams

Internet

Powepoint

Email

Spreadsheets

Word

Sources Of Finance

Personal Saving

Mortgage

Bank Loan

Overdraft

Grant

Hire Purchase

Personal Saving Advantage,Disadvantage

Advantage

Doesnt need paid back

Full control of the business is maintain

Disadvantage

May be lost

Bank Loan Advantages,Disadvantages

Advantage

Can be arranged quickly

Can be repaid over a long time

Disadvantage

Interest to be paid in addition

Mortgage Advantage ,Disadvatage

Advantage

Given for long period of time

Large amount of finance raised quick

Disadvantages

Interest paid on top

Property can be lost if payments missed

Grant Advantages,Disadvantages

Advantage

does not to need paid back

Disadvantage

Business needs to meet certain criteria

Time consuming to apply