Revision for A-level Business studies 1.1

Purpose of business activity

The purpose of business activity is to identify and satisfy the needs and wants of the people with the overall aim of earning profit

 

Concept of adding value

To add extra features to a product

The customer is willing to pay more after the value has been added

 

Nature of economic activity

The nature of economic activity is that there are limited resources to satisfy unlimited wants

Due to the limited resources everyone has to make choices (individuals, businesses, governments)

 

Business environment is dynamic

Everything is changing

• Consumers’ expectations
• Production techniques
• Competition’s behavior
• Employees’ demands

 

What a business needs to succeed

Factors of production

• Land, labour, capital and enterprise

Finance

Planning

Contacts

Customers

Suppliers

 

Why business fail early on

Lack of planning

Lack of funds

Lack of expertise

 

Qualities needed by entrepreneur

Ability to take risk

Good planner

Organise the other 3 factors of production

Motivate the workforce

 

Role of business enterprises in the development of a country

Business enterprises provide employment

They pay taxes

They increase the GDP of the country

They satisfy the needs and wants of the people

They bring foreign currency if the products are sold outside the country

 

Range and aims of social enterprises

They operate for the well being of the society

Making profit is not the main aim

Main aim is to solve social problems faced by people

Profit is kept to provide more services

They normally provide education and health

 

Triple bottom line

Triple bottom line is used to measure the performance of a business:

Economically

Socially

Environmentally