A 10-page summary of everything you need for the OCR GSCE Business exam- everything in the course is covered in a simple yet detailed manner. Pros and cons of specific concepts are explained, graphs and diagrams are also included.
Types of Business Activity – primary, secondary and tertiary sectors
Type of Business Activity Definition Examples
primary sector produces or extracts raw materials for other businesses to use fishing, mining, farming
secondary sector manufactures (makes) products with raw materials car manufacturer
tertiary sector provides a service for its customers retail, banking, travel, entertainment, customer service, education, health
Interdependence = all businesses depend on other sectors - e.g. a farmer grows potatoes, Walkers make crisps, Tesco sell them! This is an example of a chain of production
where each businesses specialises in one kind of work (specialisation) and the secondary sector add value to the original raw material (e.g. Walkers add value to the potato
– this is called added value!)
Changes in the three sectors of business activity in the UK –what has changed and why?
Type of Business Activity Less or more important Reason for change
primary sector less raw materials used up (e.g. coal), machines have replaced jobs (e.g. farming)
foreign competition can produce cheaper raw materials (e.g. coal)
secondary sector Less (the decline of foreign competition means many goods made overseas (cheaper to produce – e.g. clothes in Primark!)
manufacturing is called machinery has replaced jobs (e.g. car plants)
de-industrialisation)
tertiary sector much more Increase in wealth so more money spent in shops, on travel, entertainment etc
Increase in leisure time
Customer service is more important so businesses can keep their customers
Business Objectives (aims) and private, public and voluntary (not for profit sectors)
Objectives (often found Explanation Conflict
in mission statements)
Profit Maximisation of profit – main aim of most businesses in the private sector *Profit v. growth – the desire to grow quickly
Growth Usually the best way to raise profit and the aim of most businesses in the private sector: could soak up profit (some shareholders will
Sales growth not like this!)
Increased market share (e.g. Ford having a greater percentage share of the UK car sales) *Profit v. survival – profit may have to be put
Eliminate competition on hold if a business is struggling to survive
Survival Very important for a new business or an established business facing problems *Profit or growth v. service – some might
Providing a service All businesses will want to provide a service but it is the most important aim for the public sector want to ‘get rich quick’ at expense of service
, Sector Definition Examples Objectives
Private sector businesses owned by private Tesco Usually profit and growth but with new or struggling
individuals businesses, main aim is survival
Public sector organisations controlled by NHS, education, police, fire and local councils + public Most important aim is service!
central and local government corporations like the BBC and the Post Office
Voluntary (not for Charities and social clubs. Oxfam Raise money, further a cause, provide a service for its
profit) sector Scout/guide groups members
Stakeholders = individuals or groups with an interest in a business
You should be able to think why some or all of the following could be stakeholders in a business and why they often have conflicting interests:
Workers
Managers
Owners
Customers
Suppliers
Government
Local community
Competitor
Interest and pressure groups
Type of Business Organisation in the Private Sector
Unincorporated Incorporated
Definition Sole proprietors and partnerships are easier to set up but have Incorporation is a legal process which Ltd and PLC businesses must go through. The Registrar of
no separate legal identity Companies issues a Certificate of Incorporation once companies have registered.
Sole proprietor Partnership Private Limited Company Public Limited Company (PLC)
(or trader) (Ltd)
Definition One person owns the A min of 2 and a max of 20 Shares are sold to private These companies sell their shares on the London Stock Exchange to the
business. partners own the business. A investors (managers, public – they must have an issued share capital of >£50000 and are
deed of partnership states how friends, family, wealthy usually the largest companies. Minority shareholders own a small
profit will be shared. backers). percentage of the shares and major shareholders, known as institutional
shareholders, like investment companies, own a large number of shares
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