Notes covering all 6 units that come up in the AS-Level Business exam:
-Unit 1- What is business?
-Unit 2- Management and leadership
-Unit 3- Marketing
-Unit 4- Operations
-Unit 5- Finance
-Unit 6- HR
Willingness to undertake new ventures, initiative
Creativity to come up with new ideas and ways of doing things
Evaluate whether something is worth doing even with risks involved
To take advantages of new changes – methods, processes, demands in thing people want.
Willing to try and to learn from the mistakes
Braveness, daring, committed and motivated
The Nature of Business activity
Purpose of Business Activity
- A business is any organization that uses resources to meet the needs of customers by
providing a product of service that they demand
- Business activity at all stages involves adding value to resources, such as raw materials
and semi-finished goods, making them more desirable – to – the final purchaser of them
- Without business, we would still be entirely dependent on the goods that we could
make or grow ourselves
- They do this by sourcing scare resources such as raw materials [ inputs ] and turning
them into finished goods or services [outputs]
The Concept of Adding Value
A business adds value to the raw materials it uses to produce the good or service it sells. Added
value is one of the key objectives of any business. If a customer is prepared to pay a price that is
much greater than the cost of materials used in making or providing a good or service, then the
business has been successful in ‘adding value’ .
Key Definition
Added valye the difference between the cost of purchasing raw materials and th price the
finished goods are sold for
The concept of valued added can be illustrated by an example taken from the building industry.
, The Nature of economic activity and the problem of choice
- We live in a world of great wealth and great scarcity (shortage)
- We have limited resources but unlimited wants, needs
- Poor people are unable to find the basic requirement for life yet rich people may not be
satisfy all of their wants for luxury goods and services
[Inequalities – rich and poor]
- It is the purpose of economic activity to provide for as many of our wants as possible ,
however with the shortage of products and limited resources it lead us all having to make
choices
Opportunity cost
- In deciding to purchase one item, we must give another. This cost of giving up one
thing for another is referred to as “opportunity cost”
- The benefit of the next most desired option which is given up
Business environment is dynamic
- Business and the environment are inter-connected
- Risk of new change can make the original business idea much less successful such as
:
New competitors
Legal changes [outlawing the product ]
Economic changes leave customers with much less money to spend
Technological changes
Businesses
experience a
slow down
Customers
If the
leave with
much less
economy People have
no confidence
money to buy
spend
is not
strong
People don't
invest as
much
, What a business need to succeed
Factors of production
The difference in purchasing cost and
selling price is called “value added”
Inputs Outputs
Enterprise
Finished goods
Land
Services
Capital
Production Process
Component for
Labor other firms
Aim is to add value and sell for a profit.
Value Added DOES NOT equal profit.
Why many business fail early on
• Construct a cash flow
•Record delivery dates forecast
•Payment dates • Inject sufficent amount
•Recieved payments of funds to last couple
amount of mothns
•Tax calculations
• Good relationship with
Lack of banks
Lack of record • Effective credit control
working
keeping
capital
Poor Changes in
management business
•Leadership skills skills environment
•Cash management •New competitors
and coordinating •Legal changes
•Communication skills •Economic changes
•Marketing, promotion • Techcological changes
, The Role of the entrepreneur
Qualities an entrepreneur is likely to need for success
Innovation and creativity Leadership skills
Multi-skilled Ability to manage finance
Self-motivated Decision-making
Ability to bounce back from Vision
the worst situation Commitment
Passion Consistency
Confidence Courage
Independence Stability
Risk-taking Charismatic
The role of business enterprise in the development of a business and a
country
Impact Explanation
Setting up new business will create job for themselves
(entrepreneur) and others member in their family or friends.
Employment Creation In creating such employment, the national level of
unemployment will fall; release stress to the economy
Any increase in output of goods or service increase GDP (gross
domestic product) of the country. Increasing the living
standard for the population; increased output and
Economic Growth
consumption will also lead to increase tax revenues for the
government
A high portion of new firm fail, some survive and a few expand
largely. These firm employ large numbers of workers;
Firms Survival and growth
economically growth.
New business acquires innovation, creativity and this adds the
new dynamism to an economy. This business will grow due to
less competition and make the nation’s business sector more
Innovation and technological
competitive. The increased use of IT by firms can help the
change
nation become more advanced in new application,
technology.
Business start-up by offer goods and services that meet the
needs of local or regional market. However, some will expand
their operations to the export market, noticing that other
Exports market may not have the same advantage in capital goods
therefore they could improve their value of nationals export
and international competiveness.
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