Business Studies - Prelim Study Notes

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Key Terms:

* Analyse: identify components and the relationship between them; draw out and relate implications. * Appreciate: make a judgement about the value of.
* Assess: make a judgement of value, quality, outcomes, results or size. * Define: state meaning and indentify essential qualities. * Describe: provide characteristics and features.
* Determine: make a decision or work out an answer after appropriate thought and investigation. * Discuss: identify issues and provide points for and/or against * Distinguish: recognise or note/indicate as being distinct or different from; to note differences between. * Evaluate: make a judgement based on criteria; determine the value of. * Examine: inquire into.

* Explain: relate cause and effect, make the relationships between things evident; provide why and/or how. * Extrapolate: infer from what is known.
* Identify: recognise and name.
* Outline: sketch in general terms; indicate the main features of. * Predict: suggest what may happen based on available information. * Synthesise: put together various elements to make a whole.

NATURE OF BUSINESS:

A business is an organised effort of individuals to provide and sell, for a profit, products that satisfy individual’s needs and wants.

A product is a good or service that can be bought or sold.

Services are intangible and are done for you by others.

Business Size:

Business size can be measured using number of employees, number of owners, market share. The number of employees is the easiest quantitative measure. Small businesses have less than 20 employees, medium businesses have between 20 and 199 employees and large business’ have in excess of 200 employees.

* Micro businesses:

-employ fewer than 5 people
-employ 3% of all people in the private sector
-54% have no employees

* Geographical spread:

-local: tend to be small/medium in size, service a surrounding area -national: operate within one country, examples include: Coles, Rivers, Telstra, Harvey Norman. -global/transnational corporations: large businesses that have a home base on one country and operate partially owned or wholly owned businesses in other countries, national borders do not represent barriers to trade, examples include: McDonalds, Starbucks and Woolworths.

Businesses may to choose to expand to increase sales, increase profits, increase market share.

Classification by industry sector:

An industry consists of businesses involved in similar types of production.

Primary Industry: those businesses in which production is directly associated with natural resources. Secondary Industry: industry involved in taking a raw material and making it into a finished or semi-finished product. Tertiary Industry: industry involved in a service for other people. Quaternary Industry: industry involved in services that involve the transfer and processing of information and knowledge. Quinary Industry: industry involved in al services that have traditionally been performed in the home.

Legal Structure:

* Unincorporated: unlimited liability. Owners are responsible for all debts of the business.

Sole Trader: a business that is owned and operated by only one person.

Partnership: a legal business structure that is owned and operated by between 2 and 20 people with the aim of making a profit.

* Incorporated: limited liability. Business operates independently of it’s owners.

Private Company: a business with usually between 2 and 50 private shareholders.

Public Company: a business in which the general public may buy and sell shares in.

Business Environment:

External Environment: factors over which the business has little control. Internal Environment: factors over which the business has some degree of control.

External:
* Competitive: competing for market share. Can provide consumers with choice, range in quality and a variety of prices. *...
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