Business Activity Flashcards

Understand the nature of business activity and the reasons why businesses exist.
Understand the role played by different stakeholders.
Understand that businesses operate in a changing business environment.

Discuss and write down the meaning of the following terms:
- What is a business?
- What are goods?
- What is a service?

A business is an organisation that provides goods and services.
Main features of business activity:
- Business activity produces an output – good or service.
- Goods and services are consumed.
- Resources are used.

Functions carried out by a business:
- Production
- Marketing
- Human Resources
- Financial Control
External factors affect businesses – things the business has no control over.
Businesses aim is make a profit.
They need to survive.

Goods – physical products that you can hold.
Services – non-physical products that are provided to you.
Consumer goods and producer goods.
- Consumer goods are produced for the consumer.
- Producer goods are produced for other businesses.
Examples:
- Consumer Goods:
  - Goods: Smartphone, Magazine, Crisps, Handbag, Computer game
  - Services: Health care, Banking, Air travel, Education, Garden design
- Producer Goods:
  - Goods: Delivery van, Office furniture, Tools, Sugar cane, Tractor
  - Services: Market research, Insurance, Software design, Industrial cleaning

Needs – basic requirements for human survival.
Wants – people’s desires for goods and services.
Wants can be infinite – better house, holidays, bigger car, better education, cleaner environment – without limit in space or time.
Most people want more than they have – the resources available to businesses are finite – limited; these resources can be described as scarce – limited availability.

Each organisation provide goods and services for different purposes.
Private enterprise – private sector businesses – there to make money.
Social enterprise – private sector – non profit making – raise money for good causes, provide opportunities for people with common interests.
Public Enterprise - public sector – health care, education, policing, fire services – provide what private enterprise fail to provide adequately.

Stakeholder – an individual or group with an interest in the operation of a business.
Student activity – students have 1 minute to discuss who they believe are stakeholders for a business.

Businesses operate in a changing business environment.
They are affected by external factors that are likely to change over time.
These include – strength of competition, economic climate, government legislation, population trends, demand patterns, world affairs and social factors.
Businesses must produce goods and services to meet peoples wants and needs to survive – they must have clear objectives and be aware that the changing environment can bring new opportunities and impose new limitations.

Students are to read the case study on page 4 – and are to consider the questions.
Why do you think Tharanga opened a second-hand bicycle shop?
What are three resources used by Tharanga when setting up the business?

Which of these products is designed to satisfy a need?
- A) Potato crisps B) Cricket bat C) Bread D) Smartphone
Which of the following is a business stakeholder?
- A) Lawyer B) Tax collector C) Customer D) Police Officer
Which of the following business activities is a service?
- A) House construction B) Dental treatment C) Coconut farming D) Gold mining
An example of a producer good is:
- A) Tractor B) Newspaper C) Package holiday D) Meal at a restaurant

Understand the nature of business activity and the reasons why businesses exist.
Understand the role played by different stakeholders.
Understand the role played by different stakeholders