Ib Business Hl Topic 1
Topic 1- Exam Style Notes 1.1 Nature of Business Activity
What is a business? * Business- decision making organisation using inputs to produce goods and services which satisfy the needs and wants of a customer * Factors of production- “CELL” 1. Capital- used to produce goods (non natural, eg machinery) 2. Enterprise- management/planning of factors of production 3. Land- natural resources; renewable and non renewable 4. Labour- physical and mental efforts of people
Business functions * “Funky HOM” 1. Finance- managing and organising money 2. Human Resources- managing personnel eg training, motivation 3. Operations- process of turning inputs to outputs 4. Marketing- identifying & satisfying wants through 4 P’s. Product, price, promotion, place
Primary, Secondary & Tertiary Sectors * Primary- conversion of land as a factor of products. Not much value added eg agriculture * Secondary- Using raw materials and capital to manufacture goods eg toys * Tertiary- service sector eg accounting, education * Developed country- more tertiary business- more focus on relations with customer and more reliance customers on support services * Developing country- more primary & secondary 1.2 Types of Organisation
Private & Public Sector * Private- run and owned by private individuals or businesses (not owned by govt); main aim is profit * Public sector- run & controlled by govt. Main aim is providing goods and services to public, no profit
Starting a business
Reasons for setting up a business * “GET CASH” 1. Growth 2. Earnings 3. Transferance (inheritance) 4. Challenge 5. Authority 6. Security (job security) 7. Hobbies
Identifying a market Opportunity * “I can make dough” 1. Identify a need 2. Create an idea 3. Market research 4. Develop entrepreneurial skills
Problems to business start ups * “HELP PUMP CL” 1. High costs of production
What is a business? * Business- decision making organisation using inputs to produce goods and services which satisfy the needs and wants of a customer * Factors of production- “CELL” 1. Capital- used to produce goods (non natural, eg machinery) 2. Enterprise- management/planning of factors of production 3. Land- natural resources; renewable and non renewable 4. Labour- physical and mental efforts of people
Business functions * “Funky HOM” 1. Finance- managing and organising money 2. Human Resources- managing personnel eg training, motivation 3. Operations- process of turning inputs to outputs 4. Marketing- identifying & satisfying wants through 4 P’s. Product, price, promotion, place
Primary, Secondary & Tertiary Sectors * Primary- conversion of land as a factor of products. Not much value added eg agriculture * Secondary- Using raw materials and capital to manufacture goods eg toys * Tertiary- service sector eg accounting, education * Developed country- more tertiary business- more focus on relations with customer and more reliance customers on support services * Developing country- more primary & secondary 1.2 Types of Organisation
Private & Public Sector * Private- run and owned by private individuals or businesses (not owned by govt); main aim is profit * Public sector- run & controlled by govt. Main aim is providing goods and services to public, no profit
Starting a business
Reasons for setting up a business * “GET CASH” 1. Growth 2. Earnings 3. Transferance (inheritance) 4. Challenge 5. Authority 6. Security (job security) 7. Hobbies
Identifying a market Opportunity * “I can make dough” 1. Identify a need 2. Create an idea 3. Market research 4. Develop entrepreneurial skills
Problems to business start ups * “HELP PUMP CL” 1. High costs of production