Lecture notes

CIE/ CAIE A level business notes- Enterprise ( Chap 1)

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Module
A levels

Institution
INTI International College Penang

Book
Cambridge International AS and A Level Business Coursebook with CD-ROM

Class notes A levels Cambridge International AS and A Level Business Coursebook with CD-ROM, ISBN: 7364. I've made these notes in a very detailed manner so it is perfect for those who don't want to go through their textbooks! You will safe a lot of time by using this!

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Uploaded on August 16, 2021
Number of pages 11
Written in 2021/2022
Type Lecture notes
Professor(s) Ms audrey
Contains All classes

business
a level
chapter 1
as level
enterprise
cie
caie
notes

Book Title:Cambridge International AS and A Level Business Coursebook with CD-ROM

Author(s):Peter Stimpson, Alistair Farquharson

Edition:2014-10-16
ISBN:9781107677364
Edition:1

Summary
A2 Section 2: Human Resource Management
Summary
A2 Section 1: Business and Its Environment
Summary
AS Section 5: Finance and Accounting

Institution
INTI International College Penang
Module
A levels

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Chapter 1 – Enterprise

Learning Outcomes
 Understand what business activity involves
 Analyse the meaning and importance of creating value
 Understand the problem of choice
 Identify the role of the entrepreneur and recognise the key characteristics of successful
entrepreneurs
 Assess the importance of enterprise and entrepreneurs to a country’s economy
 Understand the meaning of social enterprise and the difference between this and other
businesses

Introduction
 Business activity does not take place in isolation from what is going on around it
 The success of a business activity is greatly impacted by the structure and health of the
economy

Purpose of business activity
 Businesses uses resources to meet the need of customers by providing product (goods &
services)
 Business activity involves creating and adding value to resources (i.e. raw material & semi-
finished goods)
o making them more desirable to and thus value by the final purchaser (customers)
 Business activity uses the scarce resources (limited resources) of our planet to produce
goods and services…
o allow us all to enjoy a such higher standard of living than would be possible if we
remained entirely self sufficient
 So, what do businesses do?
o Businesses identify needs (consumers / other firms)
o Purchase resources (factors of production)

, o Produce goods & services – satisfy needs
o Market profit (make profit)

What do businesses need to produce goods and services?
 Factors of production - Resources needed by business to produce goods or services
o Land
 General term – not only land itself but all of the renewable and non-
renewable resources of nature i.e. coal, crude oil, timber
o Labour
 Manual & skilled labour make up the workforce of the business
o Capital
 Not just the finance needed at to set up a business & pay for its continuing
operation
 Also all of the man-made resources used in production i.e. capital goods –
computers, machines, factories, offices & vehicles
o Enterprise
 The driving force – provided by risk-taking individuals, combine other factors
of production into a unit capable of producing goods and services
 Provides a managing, decision-making and coordinating role

The concept of creating or adding value (added value)
 Business aim to create value- selling goods and services for a higher price than the cost of
bought in materials
 A business adds value to the raw materials it uses to produce the goods and services it sells
 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 / service…
 Added value = selling price – cost
 Value created  profit
o Business can create value to its product to increase profit

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Lecture notes

CIE/ CAIE A level business notes- Enterprise ( Chap 1)

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