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To produce goods and services to satisfy the needs and wants of their customers.
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To make profit.
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To survive.
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To increase market share.
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To be the market leader.
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For socially responsibility.
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Capital
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Amount of money needed to run a business
Man-made goods like machines, buildings, vehicles, and equipment needed for business to operate Investment – increasing spending on capital |
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Land
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Space where a business operates
Raw materials and natural resources that are used in making a product |
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Labour
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Physical & mental efforts of people to produce products/services
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Enterprise
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Management, organization, and planning of other three factors of production
Actions of entrepreneur who shows initiative and takes risks to set up, invest, and run a business |
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Human Resources
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Manages the workforce and laborers of the company
Deals with recruitment, wages, communication, and motivation of employees |
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Finance and Accounts
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In charge of managing the organization’s money and assets
Ensures accurate recording and reporting of financial documentation (to comply with legal requirements) |
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Marketing
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Ensure that a company’s products sell
Concerned with identifying and satisfying consumers’ needs/wants In charge of promotions, advertisements, etc. |
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Operations
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In charge of business functions and processes that produce the actual goods
Concerned with research & development, delivery, stock management, etc. |
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Primary
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Involves the harvesting of naturally available resources
e.g. mining, agriculture, livestock, drilling, and logging Regulated and protected by the government |
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Secondary
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Involves manufacturing of raw products to finished or component goods
Finished goods – exported or sold to domestic consumers Component goods – sold to companies in the tertiary sector |
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Tertiary
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Involved with service and retail
Delivering final goods to customer Includes retail sales, transportation, entertainment, restaurants, media, healthcare, banking, etc. |
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Quaternary
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Involved with knowledge and the movement of information.
Includes government, education, libraries, scientific research, information technology, etc. |
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Change in economic structure (primary to secondary, secondary to tertiary, etc.)
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Industrialization
↳ When a country moves towards the manufacturing sector as its principal output and employment (primary to secondary) ↳Products become more refined and have more export potential ↳Raises the standard of education ↳Opens better job opportunities Developed nation ↳Exploits the tertiary sector as the national output of employment ↳ Further raises the standard of education |
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Examples of effects of shifting to the tertiary sector
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For a labor intensive manufacturer of aluminum cans
↳ Quality of products improve ↳ More Distributors ↳ Less employees and higher wages for employees ↳ Can consider turning to robots and machines, as well as outsourcing |
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Entrepreneurship
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The process of starting a business, company, or organization
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The Entrepreneur
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The founder, and usually owner
Big risk, big reward Organizes inputs of production into goods and services (outputs) Obtains money, buys the inputs needed and makes decisions. Takes risks and provides the vision for the business idea Assumes large financial risk Provides sufficient resources |
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Intrapreneurship
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Similar to entrepreneurship but is done in an existing organization
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The Intrapreneur
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Is an employee of the organization
Uses resources of company to undertake projects and therefore risks very little Rewarded in the form of a paycheck Does not act autonomously like an entrepreneur as he is dependent on other employees or the organization he works for |
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New business idea
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Passion to make change
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Market need
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Earning a living
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Greater financial reward
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Control
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Work-life balance
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Autonomy/Own boss
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Businesses often start up by looking for market opportunities (market gaps or niches)
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Niche markets are where small businesses can easily compete
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Factors to consider: What questions would businessmen ask about the factors?
↳ Business idea ↳ 4 Factors of Production (capital, land, labor, and enterprise) ↳ Four departments/functional areas |
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Internal
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Lack of working capital
Poor management skills Unskilled employees |
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External
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Economic, environmental or political shocks
Market too small / no market Strong competition |
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Report detailing aims and objectives of a business
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Planning tool that serves as a blueprint to address the issues of a startup business
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Meant for investors/banks to help them decide on whether to invest/approve loans
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Business
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Name of the business, type of the business, statement of aims and objectives, details of the owner
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Product
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Details of goods/services, operations and equipment needed, suppliers, price
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Market
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Who you’re selling to, market profile, competition (strengths and weaknesses)
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Finance
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Money, start-up costs
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Personnel
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Employees and workforce, skills
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Marketing
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Marketing mix employed by business
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Cheatography n. The art of mapping complex subjects into clear, instantly navigable reference guides.
