National 5 Business Management 1.1 Business Activity
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Transcript of National 5 Business Management 1.1 Business Activity
1.1 Business ActivityN5 Business Management
What is a Business?
A business is an organisation that exists to satisfy needs and wants.
Some Key Terms
CustomerConsumerSupplierTurnoverCostsProfit
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
Goods and ServicesA 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.
Quic
k Q
uiz
TASK
Question Bank
1-7
Production Stages
INPUTS PROCESS OUTPUT
Factors of ProductionLand – 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
TASK
Question Bank
8-20
ICT Task
Create a poster outlining Inputs, Process & Outputs of a product you like
Include suitable images & text
Why do businesses exist?
To satisfy customer needs and wants
To satisfy consumption
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
Key TermsSocial 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
Social costs and benefitsCostsAir/noise/water pollutionTraffic congestionLifestyle changeLocal services unable to cope
BenefitsHappier customersCreation of jobs by businessContribution to local communityCreation of jobs within other local
businesses
Economic costs and benefitsCostsHospital v leisure centreShopping centre v Football
stadiumPub v Fast Food restaurantPacket of crisps v chocolate bar
BenefitsPeople employedWages receivedRise in standard of livingBoost to local firms
TASK
Question Bank
21-34
The Business Cycle
TASK
Question Bank
35-38
Customer SatisfactionCustomers are vital for a
business as they buy the goods and services.
Firms try to make customers happy by:
Having a quality productEffective employeesAfter sales service (including
warranties)
Customer SatisfactionFirms may also have:
Customer Care PolicyCustomer Complaints Process
TASK
Question Bank
39-43
Extension Task:Create Organisation Charts for:The SchoolA Local Business of Your Choice
Are all Businesses the same?Organisations differ due to many
characteristics.
Business SizeBusiness ObjectivesType of OwnershipProduct/Service
Mission StatementsAn 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.”
TASK
Question Bank
44-45
Business SizeSmall Business Medium-Sized
BusinessLarge Business
Owned by sole trader or partnership
Owned by a group of people
Owned by shareholders; run by directors
Sells goods locally
Reaches locally and/or nationally
Sells locally, nationally and internationally
Employees: <= 50
Employees: 50-250
Employees: 250 +
TASK
Question Bank
44-49
Sectors of Economy
Private Sector
Public Sector
Third Sector
Private SectorBusinesses driven by profit.
That profit only benefits the owners and investors.
Financed by private money from shareholders and bank loans
Private Sector Examples
Sole TraderPartnershipPrivate Limited
Company
Ltd & Plc
TASK
Question Bank
50-58
Public Sector
Provide goods and services for the benefit of the community
Run by the Government.
Public money from taxes
Public Sector Examples
Devolved Services Local Services
TASK
Question Bank
59-89
Third SectorNot driven by profit but by need
to help parts of the community
Money from donations and gifts
Can be a Social Enterprise
Third Sector Examples
CharitySocial Enterprise Local Sports Club
TASK
Question Bank
90-101
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
Business Objectives
SurvivalProfit MaximisationGrowthProvide a ServiceCustomer ServiceSales MaximisationSocial Responsibility
TASK
Question Bank
102-109
Sectors of Industry
Primary Sector
Secondary Sector
Tertiary Sector
Primary Sector
This covers raw materials which are straight from land, sea and air
MiningFarming FishingOil and gasForestry
Secondary Sector
This uses the raw materials and turns them into finished goods
Car manufacturingEngineeringShipbuildingElectronics
Tertiary Sector
This covers all services:
InsuranceEducationFire ServiceHealth ServiceLeisure IndustryTravel & TourismDistribution
Production ChainProduction is the transformation
of raw materials into the finished product
IPO or Input – Process - Output
INPUTS PROCESS OUTPUT
Creating WealthWealth is created by adding
value to each stage of the production process
Selling Price = Cost of materials + Value
TASK
Question Bank
110-115