Understanding Business Activities and Models

Business Activity

Transformation of inputs into valuable outputs.

Factors of Production

Resources needed for production: labor, land, capital, enterprise.

Inputs

Resources used to create outputs in business.

Outputs

Goods, services, and waste produced by businesses.

Departments

Functional areas within a business: marketing, finance, etc.

Business Concepts

Interdisciplinary ideas: creativity, change, ethics, sustainability.

External Influences

Factors affecting business: social, cultural, economic, etc.

Circular Business Models

Models aimed at reducing waste and resource use.

Linear Models

Traditional models producing waste without recycling.

Circular Supply Models

Use renewable resources to reduce virgin resource demand.

Resource Recovery Models

Recycle waste into secondary raw materials.

Product Extension Models

Extend product life to reduce virgin resource need.

Sharing Models

Share underutilized resources to minimize new product demand.

Product Service System Models

Market services instead of products to promote sustainability.

Primary Sector

Extracts resources from the earth, e.g., farming.

Secondary Sector

Manufactures finished products, e.g., car production.

Tertiary Sector

Provides services, e.g., healthcare and supermarkets.

Quaternary Sector

Knowledge-based services, e.g., web design and research.

Start-up

A new business venture initiated by an entrepreneur.

Entrepreneur

Individual who risks starting a new business.

Business Plan

Document outlining objectives and strategies for a business.

Executive Summary

Concise overview of the business plan's main points.

Human Resources Plan

Details organizational structure and employee management.

Financial Plan

Projected financial figures for funding and operations.

Marketing Plan

Strategy to reach and attract potential customers.

Operational Plan

Details manufacturing processes and resource availability.

Reasons for Start-up Failure

Common causes include lack of planning and demand.

Private Organizations

Owned by individuals, focused on profit-making.

Public Organizations

Government-managed services funded by taxation.

Public-Private Partnerships

Collaboration between public and private sectors for services.

Sole Trader

An organization controlled and owned by one person.

Partnership

An organization with 2+ owners.

Privately Held Company

An organization which issues stock and has shareholders, but can only sell shares privately to friends, family, or associates.

Publicly Held Company

An organization which issues stock, has shareholders, and sells shares publicly on a stock exchange.

Limited Liability

No distinction between the business and the owner in the government's eyes, therefore the owner's personal assets are counted as part of the business.

Social Enterprises

Characterized by whether or not they aim to make a profit (can be for-profit or non-profit).

Traditional Charities

Receive profit from donations, allowances, or government grants.

For Profit Social Enterprise

A social enterprise which aims to make a profit but has a social purpose.

Non-Profit Social Enterprise

A social enterprise which aims to make enough money to achieve their goals, channeling all money generated towards achieving the social goal.

Non-Governmental Organization (NGO)

An organization which is independent of the government, often receiving funding and cooperating with the government, with a humanitarian or social purpose.

Charity

An organization which is a type of NGO with an aim specifically defined as charitable by the government.

Triple Bottom Line (TBL)

A framework some organizations use to evaluate their performance on a broader perspective, including People (social), Planet (environmental), and Profit (financial).

Sustainable Development Goals (SDGs)

A framework developed by the UN in 2015 designed to eradicate poverty, fight inequality, and tackle climate change by 2030.

Opportunity Employment

Organizations which employ people who have significant barriers to being employed in other areas of work.

Transformative Products or Services

Organizations which create a social or environmental impact through innovative products and services.

Donate Back

Organizations which contribute a portion of their profits to non-profits which address basic unmet needs.

Healthy Competition

Can produce innovation.

Mission Statement

Defines a company's purpose and values succinctly.

Vision Statement

Describes a company's long-term aspirations and goals.

Profit

Total revenue exceeding total costs for sustainability.

Growth

Increasing sales and size for market dominance.

Survival and Stability

Ability to withstand market changes and disruptions.

Protecting Shareholder Value

Maintaining stockholder satisfaction through profit sustainability.

Ethical Objectives

Goals providing social or environmental benefits.

Goods

Tangible items sold by businesses, e.g., cars.

Services

Intangible offerings provided, e.g., financial aid.

Products

Combination of goods and services sold by businesses.

Corporate Responsibility (CSR)

Policies promoting positive societal and environmental impact.

CSR Functions

Responsible sourcing, employee engagement, and environmental protection.

Benefits of CSR

Enhanced brand recognition and increased sales.

Risks of CSR

Short-term costs and potential stakeholder conflicts.

Stakeholder

Entity affecting or affected by a business.

Internal Stakeholders

Individuals within a business, e.g., employees.

External Stakeholders

Entities outside a business, e.g., customers.

Mutual Benefit

Common interests leading to shared stakeholder advantages.

Stakeholder Conflict

Disagreements arising from differing stakeholder objectives.

Dividends

Payments to shareholders from company profits.

Automation

Using technology to enhance productivity and reduce costs.

Ethical Suppliers

Suppliers adhering to ethical standards and practices.

Competitive Wages

Attractive pay leading to motivated and productive workforce.

Market Share

Percentage of total sales in a market held by a business.

Economies of Scale

Decrease in per unit cost as business grows

Stakeholder Engagement

Involving stakeholders in business decision-making processes.

Sustainable Economic Activity

Business practices that minimize environmental impact.

Production capacity

The volume of products that can be generated by a business enterprise in a given period of time using current resources.

Revenue streams

The different sources of income that a firm may have, often diversified to find sales growth in saturated markets or to offset risk.

Brand

The set of expectations, memories, stories, and relationships that account for a consumer's decision to choose one product or service over another.

Profit margins

The percentage of sales that an organization can turn into profits.

Circular business models

Can be related to sectors of business activity, social enterprise, vision/mission statements, and business objectives.

Business plan

Can be connected to public/private sectors, types of organization, vision/mission statements, and business objectives.

SWOT analysis

Provides a situational analysis of the current position of the business, addressing both internal and external factors.

STEEPLE analysis

Assesses the impact of external factors on the business.

Decision trees

Help businesses to consider various factors before deciding on a particular venture.

Ansoff matrix

A tool to assess the options for growth.

BCG matrix

A strategic tool for analyzing business units or product lines.

Descriptive statistics

Statistics that summarize or describe characteristics of a data set.

Strengths (SWOT)

Critical success factors that give you a competitive edge and can be leveraged.

Weaknesses (SWOT)

Factors that put you at a disadvantage and require candid analysis.

Opportunities (SWOT)

Pinpoint openings or gaps in the marketplace due to market fluctuations or trends.