IGCSE Business

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  • Created by: Emma Vos
  • Created on: 12-05-13 15:25

Business Activity

-Adding Value makes a product or service more desirable to the consumer (everything done to the raw material to turn it into the product the consumer buys is added value) 

-Purpose of business activity: Everyone has their own needs and wants. Needs are things that people cannot live without such as shelter, food and water supply. Wants are people’s desires that they can live without such as a car, jewellery and a television. Everyone has different wants but everyone’s needs are quite similar. The purpose of businesses is to satisfy these needs and wants.

-Objectives of different types of organisations:

Non-profit organisation: Raising as much money for their cause, projects, and completing these within a giving ammount of time.

Private enterprise/sector: Provide high quality, be the cost leader in the marker, have high profits.

Public enterprise/sector: Increase living standards, 

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Business Activity 2

-Classification of business activity:

Primary: Extracting raw materials

Secondary: The raw materials and resources from primary sector is processed into manufactured goods. 

Tertiary: Provides a service.

-In most of the developed countries you can clearly see that the tertiary industry is the largest. There is a small amount of secondary industry found in MEDCs and a tiny amount of Primary Industry companies. In China there is a larger Secondary Industry due to the cheap labor found there leading to many manufacturing companies to relocate them. In MEDCs a new sector called the quaternary sector has emerged. This includes high tech industries such as solar energy companies and micro technology companies.

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Business Activity 3

How to measure the size of a business: (this method can be misleading though)

  • Capital employed – how much money is invested in the business
  • Number of employees- How large is the workforce
  • Staff turnover – Percentage of how much the workforce needs to be replaced
  • Market Share- How much of the sales does the company account for in their product’s market
  • Profits- The amount of profit a company earns monthly/ annually
  • Sales Turnover- How much money is generated from sales
  • Value of Business- How much the business is worth if sold off 

Why business grow and expand:


  • Make more profit
  • Spreads the risk – businesses may spread into other markets and spreads the risk among them
  • Economies of Scale – get discounts when buying in bulk 
  • Sell more products as a large business is much more secure than a small business
  • Maximize sales and profits
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Business Activity 4

The problems connected with growth: 

-Employing a larger workforce would cost a lot of money  

-As you employ more capital on machinery there will be a problem with maximizing profit as a lot of money would be involved.

-There is always a risk as a business expands, especially to other locations or by introducing different products as they do not know whether it would be successful.

Business impacts on the environment: 

Noise pollution, air pollution, visual pollution, congestion and global warming. 

Sustainable development: is development that meets the needs of the present without affecting(compromising) the ability of future generations from being able to meet their own needs.

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