Ib-Business Management SL-1 Unit 1.1

Paul Hoang Version

What is a business ?

An Organization that aims to meet consumer needs and wants

Four Factors of Production

Land

Labour

Capital

Enterprise

Human Resources (HR) Sector

Recruiting , Training , Providing compensation for work

Finance Sector

Manages the businesses money

Marketing Sector

Identifies target market and target customers. Conducts market research and decides what to sell and for what price

Operations Management / Production Sector

Deals with the manufacturing and sourcing of the goods and materials the company needs

Primary Sector

Extracts raw materials

examples include: farming , fishing

Remember that this has everything to do with Natural Resources !!!

Secondary Sector

Manufacture’s goods , This can be seen as the secound step fromt he primary sector as they usually take the raw materials gathered from the primary sector and produces final goods for the customers. These usually DO NOT get sold to other businesses but rather sold from the business that manufactored them.

Examples : Bakery

Tertiary Sector

These are the busniess that provide services

Examples : Movie theater , Hospitals , Nail Salon

Quaternary Sector

This sector focuses on knowledge creation, this is a fancy way of saying that they focus on information generation and researching

Example : Research Organizations/Institutions

What is a Entrepreneur ?

An individual with an idea that is willing to take financial risk to combine factors of production for profit

What are Goods

Physical products produced and sold to customers

What are Needs

Basic necessities a person must have to survive

What is Production

Production is the process of creating goods/ services and adding value in the process

What does “Adding value mean ?“

The practice of producing a good/service adds is worth more than the cost of the resources used in the production process

Consumer vs Customer ?

A consumer is an individual or organizations that actually USE the product

A customer is an individual or organization that BUYS the product