National 5 Business Management 1.1 Business Activity

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  • 1. 1.1 Business Activity N5 Business Management
  • 2. What is a Business?  A business is an organisation that exists to satisfy needs and wants.
  • 3. Some Key Terms Customer  Consumer  Supplier  Turnover  Costs  Profit 
  • 4. Needs and Wants  A Need is a basic thing humans have to have in order to survive. I.e. Food, water, shelter and clothes are all needs.  A Want is something extra we would like to have. They can be luxuries or time saving devices. Cars, mobile phones, computers and CDs are all wants
  • 5. Goods and Services     A Good is something you can touch and feel. Goods can be non-durable, durable or industrial A Service is provided by someone else. A service is non-physical. Hairdryer is a good. A Hairdresser is a service.
  • 6. Quick Quiz
  • 7. TASK  Question Bank  1-7
  • 8. Production Stages INPUTS PROCESS OUTPUT
  • 9. Factors of Production  Land – all natural resources used in production  Labour – all people used in production  Capital - all items used to make other things in production  Enterprise – the art of bringing together the other factors of production and being successful
  • 10. TASK  Question Bank  8-20
  • 11. ICT Task  Create a poster outlining Inputs, Process & Outputs of a product you like  Include suitable images & text
  • 12. Why do businesses exist?  To satisfy customer needs and wants  To satisfy consumption
  • 13. Balancing Costs and Benefits  A new airport is to be built near Blantyre. David Livingstone International Airport!  Do you think the people who live in Hamilton, Motherwell & East Kilbride would be happy?  Think of some good points and bad points about this development
  • 14. Key Terms  Social Costs – bad or negative effects businesses have on the community  Social Benefits - good or positive effects businesses have on the community  Economic Costs – the cost of the business alternative given up  Economic Benefits – the positive, long term changes to an area
  • 15. Social costs and benefits      Costs Air/noise/water pollution Traffic congestion Lifestyle change Local services unable to cope      Benefits Happier customers Creation of jobs by business Contribution to local community Creation of jobs within other local businesses
  • 16. Economic costs and benefits      Costs Hospital v leisure centre Shopping centre v Football stadium Pub v Fast Food restaurant Packet of crisps v chocolate bar      Benefits People employed Wages received Rise in standard of living Boost to local firms
  • 17. TASK  Question Bank  21-34
  • 18. The Business Cycle
  • 19. TASK  Question Bank  35-38
  • 20. Customer Satisfaction  Customers are vital for a business as they buy the goods and services.  Firms try to make customers happy by: Having a quality product  Effective employees  After sales service (including warranties) 
  • 21. Customer Satisfaction  Firms may also have: Customer Care Policy  Customer Complaints Process 
  • 22. TASK  Question Bank  39-43 Extension Task:  Create Organisation Charts for:  The School  A Local Business of Your Choice 
  • 23. Are all Businesses the same?  Organisations differ due to many characteristics. Business Size  Business Objectives  Type of Ownership  Product/Service 
  • 24. Mission Statements  An organisation usually outlines it vision or values in a mission statement.  For example, Manchester United – the world’s richest sports team, valued at £2 billion – has a simple one:  “To be the best football club in the world on and off the pitch.”
  • 25. TASK  Question Bank  44-45
  • 26. Business Size Small Business Medium-Sized Business Large Business Owned by sole trader or partnership Owned by a Owned by group of people shareholders; run by directors Sells goods locally Reaches locally and/or nationally Employees: <= 50 Employees: 50- Employees: 250 250 + Sells locally, nationally and internationally
  • 27. TASK  Question Bank  44-49
  • 28. Sectors of Economy  Private  Public  Third Sector Sector Sector
  • 29. Private Sector  Businesses driven by profit.  That profit only benefits the owners and investors.  Financed by private money from shareholders and bank loans
  • 30. Private Sector Examples  Sole Trader  Partnership  Private Limited Company Ltd & Plc
  • 31. TASK  Question Bank  50-58
  • 32. Public Sector  Provide goods and services for the benefit of the community  Run by the Government.  Public money from taxes
  • 33. Public Sector Examples  Devolved Services  Local Services
  • 34. TASK  Question Bank  59-89
  • 35. Third Sector  Not driven by profit but by need to help parts of the community  Money from donations and gifts  Can be a Social Enterprise
  • 36. Third Sector Examples Charity Social Enterprise Local Sports Club
  • 37. TASK  Question Bank  90-101
  • 38. ICT Task  Create a PowerPoint presentation comparing an organisation from each of the 3 different sectors of ownership:  Private (examples, advantages & disadvantages)    Public (examples, advantages & disadvantages) Third (Voluntary) (examples, advantages & disadvantages) Include suitable images & text
  • 39. Business Objectives Survival Profit Maximisation Growth Provide a Service Customer Service Sales Maximisation Social Responsibility
  • 40. TASK  Question Bank  102-109
  • 41. Sectors of Industry  Primary Sector  Secondary Sector  Tertiary Sector
  • 42. Primary Sector  This covers raw materials which are straight from land, sea and air  Mining Farming Fishing Oil and gas Forestry    
  • 43. Secondary Sector  This uses the raw materials and turns them into finished goods Car manufacturing  Engineering  Shipbuilding  Electronics 
  • 44. Tertiary Sector         This covers all services: Insurance Education Fire Service Health Service Leisure Industry Travel & Tourism Distribution
  • 45. Production Chain  Production is the transformation of raw materials into the finished product  IPO or Input – Process - Output INPUTS PROCESS OUTPUT
  • 46. Creating Wealth  Wealth is created by adding value to each stage of the production process  Selling Price = Cost of materials + Value
  • 47. TASK  Question Bank  110-115