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Businesses exist to provide goods or services.

Goods are physical products - such as burgers or cars.
Services are non-physical items - such as hairdressing.
A market is any place where buyers and sellers meet to trade
Primary production: this involves acquiring raw materials. For
example, metals and coal…

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An aim or objective is a statement of what a business is trying to
achieve over the next 12 months. For example, a business can set
itself any of these targets:
· survival
· increased profit
· growth
· increasing market share

Having an objective is useful because it helps…

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A sole trader describes any business that is owned and controlled by
one person - although they may employ workers. Individuals who
provide a specialist service like plumbers or hairdressers.

Sole traders do not have a separate legal existence from the business.
In the eyes of the law, the business…

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A limited company has special status in the eyes of the law. The
ownership of a limited company is divided up into equal parts called
shares. Whoever owns one or more of these is called a shareholder.
The shareholders have limited liability, which is the major advantage
of this type…

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Opening a franchise is usually less risky than setting up as an
independent retailer because the business is proven in selling a
well-known product in a new local branch.

Large firms also often enjoy economies of scale. This means that a
business has lower unit costs because of its large…

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manager scan be employed who should be more efficient.


Internal (organic) growth: the business grows by hiring more staff and
equipment or making more of it's existing products.
· External growth: where a business merges with or takes over
another organisation.

Organisation charts are diagrams that show the internal…

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The chain of command is the path of authority along which
instructions are passed, from the CEO downwards.

One method of reducing costs is to remove a layer of management in
a hierarchy while expecting staff to produce the same level of output.
This is called delayering.
Job production where…

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Introducing quality assurance requires Total Quality Management
(TQM), in which managers try to bring about a change in business
culture, convincing employees to care about how products are being
made and to do their part to ensure standards are met.

Stock is any item stored by a business for use…

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Maximum stock level: the largest amount of items to be stored on
site (500).
· Minimum stock level: the lowest amount of items to be stored
on site (100).
Reorder level: the amount at which new stock is ordered. 400 items
are ordered and it takes two weeks lead time…

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