Business Activity Notes

Specialization

• Specialisation: workers focusing on specific roles/tasks to gain skill.

• Division of labor: separating work into tasks completed by different people/groups.

• Results in higher output per worker, increasing productivity.

The Purpose of Business Activity

• Meeting customer needs builds loyalty and increases brand awareness and generates revenue.

The Process of Adding Value

• Adding value: transforming raw materials into an end product worth more than the raw material costs.

• Added value: difference between the price charged and the cost of inputs.

• Greater added value leads to more successful businesses and higher profits.

Methods of Adding Value:

• Branding: Creating a superior brand through quality materials, design and marketing.

• Convenience: Offering more convenient options.

• Quality: Using beautiful packaging to create an exciting customer experience.

• Unique selling points (USPs): Customization to gain a competitive advantage.

• Design: Using robust tools and amazing screen to gain a competitive advantage.

Examiner Tips and Tricks

• Adding value raises costs, but is worthwhile if the increase in selling price outweighs the costs.

• Profitability = Selling Price - Costs