National 5 Business Management 1.1 Business Activity
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National 5 Business Management 1.1 Business Activity
- 1. 1.1 Business Activity N5 Business Management
- 2. What is a Business? A business is an organisation that exists to satisfy needs and wants.
- 3. Some Key Terms Customer Consumer Supplier Turnover Costs Profit
- 4. Needs and Wants A Need is a basic thing humans have to have in order to survive. I.e. Food, water, shelter and clothes are all needs. A Want is something extra we would like to have. They can be luxuries or time saving devices. Cars, mobile phones, computers and CDs are all wants
- 5. Goods and Services A Good is something you can touch and feel. Goods can be non-durable, durable or industrial A Service is provided by someone else. A service is non-physical. Hairdryer is a good. A Hairdresser is a service.
- 6. Quick Quiz
- 9. Factors of Production Land – all natural resources used in production Labour – all people used in production Capital - all items used to make other things in production Enterprise – the art of bringing together the other factors of production and being successful
- 11. ICT Task Create a poster outlining Inputs, Process & Outputs of a product you like Include suitable images & text
- 12. Why do businesses exist? To satisfy customer needs and wants To satisfy consumption
- 13. Balancing Costs and Benefits A new airport is to be built near Blantyre. David Livingstone International Airport! Do you think the people who live in Hamilton, Motherwell & East Kilbride would be happy? Think of some good points and bad points about this development
- 14. Key Terms Social Costs – bad or negative effects businesses have on the community Social Benefits - good or positive effects businesses have on the community Economic Costs – the cost of the business alternative given up Economic Benefits – the positive, long term changes to an area
- 15. Social costs and benefits Costs Air/noise/water pollution Traffic congestion Lifestyle change Local services unable to cope Benefits Happier customers Creation of jobs by business Contribution to local community Creation of jobs within other local businesses
- 16. Economic costs and benefits Costs Hospital v leisure centre Shopping centre v Football stadium Pub v Fast Food restaurant Packet of crisps v chocolate bar Benefits People employed Wages received Rise in standard of living Boost to local firms
- 20. Customer Satisfaction Customers are vital for a business as they buy the goods and services. Firms try to make customers happy by: Having a quality product Effective employees After sales service (including warranties)
- 21. Customer Satisfaction Firms may also have: Customer Care Policy Customer Complaints Process
- 23. TASK Question Bank 39-43 Extension Task: Create Organisation Charts for: The School A Local Business of Your Choice
- 24. Are all Businesses the same? Organisations differ due to many characteristics. Business Size Business Objectives Type of Ownership Product/Service
- 26. Mission Statements An organisation usually outlines it vision or values in a mission statement. For example, Manchester United – the world’s richest sports team, valued at £2 billion – has a simple one: “To be the best football club in the world on and off the pitch.”
- 28. Business Size Small Business Medium-Sized Business Large Business Owned by sole trader or partnership Owned by a Owned by group of people shareholders; run by directors Sells goods locally Reaches locally and/or nationally Employees: <= 50 Employees: 50- Employees: 250 250 + Sells locally, nationally and internationally
- 30. Sectors of Economy Private Public Third Sector Sector Sector
- 31. Private Sector Businesses driven by profit. That profit only benefits the owners and investors. Financed by private money from shareholders and bank loans
- 32. Private Sector Examples Sole Trader Partnership Private Limited Company Ltd & Plc
- 34. Public Sector Provide goods and services for the benefit of the community Run by the Government. Public money from taxes
- 35. Public Sector Examples Devolved Services Local Services
- 37. Third Sector Not driven by profit but by need to help parts of the community Money from donations and gifts Can be a Social Enterprise
- 38. Third Sector Examples Charity Social Enterprise Local Sports Club
- 40. ICT Task Create a PowerPoint presentation comparing an organisation from each of the 3 different sectors of ownership: Private (examples, advantages & disadvantages) Public (examples, advantages & disadvantages) Third (Voluntary) (examples, advantages & disadvantages) Include suitable images & text
- 41. Business Objectives Survival Profit Maximisation Growth Provide a Service Customer Service Sales Maximisation Social Responsibility
- 43. Sectors of Industry Primary Sector Secondary Sector Tertiary Sector
- 45. Primary Sector This covers raw materials which are straight from land, sea and air Mining Farming Fishing Oil and gas Forestry
- 46. Secondary Sector This uses the raw materials and turns them into finished goods Car manufacturing Engineering Shipbuilding Electronics
- 47. Tertiary Sector This covers all services: Insurance Education Fire Service Health Service Leisure Industry Travel & Tourism Distribution
- 48. Production Chain Production is the transformation of raw materials into the finished product IPO or Input – Process - Output INPUTS PROCESS OUTPUT
- 49. Creating Wealth Wealth is created by adding value to each stage of the production process Selling Price = Cost of materials + Value