What is a business?

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What is a business?
A business is any organisation that makes goods or provides services.
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Why do businesses exist?
Businesses exist to provide goods or services.
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What are goods?
Goods are physical products such as burgers or cars.
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What are services?
Services are non-physical items such as hairdressing.
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What are costumer needs?
Customer needs are the wants and desires of buyers.
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What is a business start up?
A business start up is a new firm operating in a market for the first time
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Where do the vast majority of business operate?
The vast majority of businesses are very small and operate in the service sector.
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Where do businesses buy the products they need?
From suppliers
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What are suppliers?
Firms selling products to other businesses
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What is a consumer?
The individual who uses the product
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Why are the consumer and costumer sometimes different people?
Parents (costumers) buy a pen for their child to use at school (consumer)
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Where do businesses sell to costumers?
In markets
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Whta is a market?
A market is any place where buyers and sellers meet to trade products.
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Give examples of a market
High street shop or a website.
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Who are businesses likely to be in competition with?
With other firms offering similar products.
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Give examples of inputs
Raw materials, equipment, buildings and staff
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What are inputs transformed into?
Outputs called products
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What is production?
The business activity of using resources to make goods and services.
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How does a business adds value?
When the selling price of an item produced is higher than the cost of all the resources used to make it.
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Give an example of adding value?
A pair of sunglasses which sell for £100. The cost of the materials, employees, marketing and all other inputs used in making one set of sunglasses is just £20, then £80 worth of value has been added by the firm during production
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What are 3 main types of industry in which firms operate?
Primary, secondary and tertiary sectors
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What happens in Primary production?
This involves acquiring raw materials.
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Give an example of primary production
Metals and coal have to be mined, oil drilled from the ground, rubber tapped from trees, foodstuffs farmed and fish trawled. (AKA extractive production.)
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What happens in secondary production?
this is the manufacturing and assembly process. It involves converting raw materials into components
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Give an example of secondary production
making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.
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What happens in Tertiary production?
this refers to the commercial services that support the production and distribution process
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Give examples of Tertiary production
eg insurance, transport, advertising, warehousing and other services such as teaching and health care
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What does the chain of production show?
interdependence
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What does interdependence mean?
firms rely on other businesses in different sectors for raw materials, components or distribution.
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What might be a supllier for a professional DJ?
A record store
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Other cards in this set

Card 2

Front

Why do businesses exist?

Back

Businesses exist to provide goods or services.

Card 3

Front

What are goods?

Back

Preview of the front of card 3

Card 4

Front

What are services?

Back

Preview of the front of card 4

Card 5

Front

What are costumer needs?

Back

Preview of the front of card 5
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