Business in the Real World - Flashcards

These flashcards summarize key concepts and definitions from the lecture notes on business principles, operations, and external influences affecting businesses.

What is the purpose and nature of every business?

The purpose and nature of every business is to produce goods or supply services that meet the needs and wants of customers.

What defines a good in a business context?

A good is a physical product that can be touched, such as a car.

What is a service?

A service is an intangible product that cannot be physically touched, such as financial advice or a yoga lesson.

What is the difference between a customer and a consumer?

A customer buys a product, while a consumer uses it.

What is a need in business terms?

A need is a basic human requirement, such as food and shelter.

What is a want?

A want is a desire for a specific product, such as wanting Coca-Cola.

Who are entrepreneurs?

Entrepreneurs are individuals who start their own businesses and are willing to take risks.

What is entrepreneurship?

Entrepreneurship is the ability and readiness to develop a business idea and take risks.

List some reasons for starting a business.

To be own boss, keep profits, job creation, pursue a hobby, prove capability, seek flexibility, and address unmet needs.

What are factors of production?

Resources used to produce goods and services: land, labor, capital, and enterprise.

What is opportunity cost?

The sacrifice of potential gain from other alternatives when one alternative is chosen.

Define 'resources' in a business context.

Inputs used by businesses to provide goods or services.

What defines a partnership?

A partnership is formed when two or more individuals come together to operate a business for profit.

What is a sole trader?

A business owned and managed by one individual who retains all profits and has unlimited liability.

What is limited liability?

A legal structure in which owners of a company are only liable for the amount they invested in the company, protecting personal assets.

What are the characteristics of entrepreneurs?

Innovative, risk-takers, hardworking, determined, and organized.

What are the main functions of a business?

Marketing, operations, finance, and human resources.

What is the primary sector?

The sector of the economy that involves the extraction of raw materials, such as farming or fishing.

What is the secondary sector?

The sector that involves the manufacturing and construction of goods.

What is the tertiary sector?

The sector that provides services rather than goods, such as retail or hospitality.

What is the purpose of setting business aims and objectives?

To provide focus and direction for the business in measuring success.

What is an aim?

A general goal of a business.

What is an objective?

A specific target that allows a business to measure its progress toward achieving its aims.

What are the impacts of economic change on businesses?

Economic changes can affect consumer spending, business operations, and overall profitability.

How does technology influence business operations?

Technology can improve efficiency, reduce costs, and enhance customer experience.

What are economies of scale?

Cost advantages reaped by companies when production becomes efficient, as the scale of production increases.

What is globalisation?

The process by which businesses develop international influence or start operating on an international scale.

What is the role of advertising in a business's strategy?

Advertising helps to promote products, build brand awareness, and persuade consumers.

Why is customer service important to a business?

Good customer service can lead to customer satisfaction, repeat business, and enhanced brand loyalty.

What is Total Quality Management (TQM)?

An approach to quality in which everyone is focused on preventing errors occurring and ensuring quality at each stage of the production process

What is the significance of employee motivation?

Motivated employees are more productive, leading to higher quality work and greater customer satisfaction.

What is a contract of employment?

A legal agreement that outlines the terms and conditions of employment between an employer and an employee.

Name two methods of recruitment.

Internal recruitment (promoting existing employees) and external recruitment (hiring from outside the business).

What are the benefits of effective recruitment and selection?

Improved employee retention, increased productivity, and better overall performance of the business.

What effects can poor customer service have on a business?

Dissatisfaction among customers, loss of revenue, poor brand reputation, and decreased market share.

How can businesses use data analysis?

To understand customer behavior, measure the effectiveness of marketing strategies, and improve decision-making.

Define 'procurement'.

The process of acquiring goods and services, often involving supplier selection and contract negotiation.

What is logistics in a business context?

The management of the flow of goods and services from point of origin to point of consumption.

Explain the importance of quality control in operations.

To ensure that products meet specified standards, leading to increased customer satisfaction and reduced costs associated with defects.

What is meant by a monopoly?

A market structure where a single seller controls the entire market supply of a product or service.

What are external factors that influence business operations?

Economic trends, competition, legal regulations, and technological advancements.

Identify a method to improve customer satisfaction. (e.g., training staff).

Providing staff with comprehensive training to enhance their knowledge and service capabilities.

What are the implications of having a flat organizational structure?

Fewer levels of hierarchy can lead to faster decision-making and improved employee empowerment, but may also lead to communication challenges.

How might legislation affect business operations?

By imposing requirements that can increase costs, change operational practices, and affect hiring and product standards.

What is the impact of consumer rights legislation?

It helps protect consumers from unfair practices while obligating businesses to meet certain standards of quality and safety.

Describe how interest rates can affect consumer borrowing.

Higher interest rates make borrowing more expensive, leading to reduced consumer spending on big-ticket items.

What is the difference between external growth and internal growth?

External growth involves mergers and takeovers, whereas internal growth focuses on expanding existing operations.

Explain what is meant by corporate social responsibility (CSR).

A self-regulation mechanism where businesses monitor their adherence to ethical standards and ensure their operations positively benefit society.

What factors might influence a business's choice of suppliers?

Cost, quality, reliability, reputation, payment terms, and flexibility.

How does outsourcing benefit a business?

It allows businesses to focus on core activities while leveraging the expertise and efficiency of third-party providers.

What is meant by lean production?

An approach to production that aims to minimize waste and enhance efficiency.

How can a business demonstrate environmental responsibility?

By adopting sustainable practices, such as reducing waste, recycling materials, and ensuring energy-efficient operations.

What impact does globalisation have on small businesses?

Increased competition from international firms and potential new market opportunities.

What is the relevance of market share to businesses?

It measures a company's sales relative to the total sales in a particular market, indicating competitiveness.

Discuss the importance of motivation in the workplace.

A motivated workforce is critical for boosting productivity, reducing turnover, and enhancing job satisfaction.

Identify a common challenge faced by newly created businesses.

Finding sufficient funding and navigating the competitive market landscape.

Explain why companies invest in training their employees.

To improve skills, enhance productivity, and motivate staff which can lead to increased job satisfaction.

What is the significance of a business's reputation?

It influences customer trust, brand loyalty, and competitive advantage in the marketplace.

How do economic downturns typically affect businesses?

They lead to reduced consumer spending, lower sales, and potential layoffs.

What role does marketing play in a business's success?

Marketing engages customers, builds brand awareness, and drives sales through effective communication and promotion.

Explain how a company might improve its supply chain management.

By carefully selecting suppliers, ensuring timely deliveries, and maintaining strong relationships for better efficiency.

What is the effect of cultural differences in international business?

Cultural differences can affect communication, management styles, and consumer behavior, impacting business success.

How might a business adapt to consumer trends?

By modifying products to meet changing consumer preferences or by introducing new offerings that align with trends.

Define 'demand' in a business context.

The quantity of a product or service that consumers are willing and able to purchase at various prices.

How can public perception influence a business's operations?

Negative public perception can lead to boycotts, loss of sales, and pressure to change business practices.

What types of strategies do businesses use to attract customers?

Competitive pricing, targeted advertising, quality improvements, and enhancing customer service.

How does increased competition affect pricing strategies?

It may lead to lower prices as businesses compete for customers, or the introduction of value-added features to justify higher prices.

What is an effective way to manage employee performance?

Regular performance reviews and feedback sessions combined with appropriate training and development opportunities.

Explain the importance of having a professional network for a business.

It helps in building relationships, gaining referrals, accessing resources, and receiving industry insights.

What does the term 'sustainability' mean in a business context?

Practices that meet current needs without compromising the ability of future generations to meet their own needs.

How does technological advancement facilitate business operations?

By streamlining processes, enabling data analysis, and improving communication with stakeholders.

Discuss how legislation impacts consumer behavior.

It shapes consumer expectations and rights, influencing their purchasing decisions based on trust and compliance.

Identify a challenge of operating in a global market.

Navigating different legal regulations and cultural norms can complicate international operations.