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AS Business
Transforming resources into goods
and services
Starter
Objectives
• To understand the
terms “Adding value”
and “added value”
• Explain how a business
can add value to
resources
...
Spot the difference…
£8,750 £99
What is added value?
• Added value is the increased worth
that a business creates for itself
For example:
If it costs Cadb...
Added value formula
• Added value = Price of finished
product –cost of resources
Objectives
• To understand the
terms “Adding value”
and “added value”
• Explain how a business
can add value to
resources
...
How can you add value to your resources?
Product
Quality
Design
Formula
Customer
Service
Convenience
Branding
USP
The benefits of adding value
• Differentiation from the competition
• Charging a higher price
• Higher profit margins
• Ta...
So back to your ideas
• How will it cost to buy the
resources?
• What will the selling price for
your finished product be?...
Objectives
• To understand the
terms “Adding value”
and “added value”
• Explain how a business
can add value to
resources
...
Key Terms
At its simplest, a business is a process
whereby inputs are processed to
produce outputs.
• Input –something tha...
Different Business Sectors
Primary Sector
• Primary Sector – extract raw
materials from land or sea, e.g.
Mining, Farming, Fishing, Oil, Gas,
Forestr...
Secondary Sector
• Secondary Sector – use raw materials
to make finished goods, e.g. Cars,
Ships, Furniture, Roads, Buildi...
Tertiary Sector
• Tertiary Sector – provides a service to
industry/consumers, e.g. Retail /
plumbers/ electricians / educa...
Quaternary Sector
• Quaternary Sector – businesses that
transform information e.g Google /
facebook / ICT
P, S or T?
• Cadburys chocolate
• Sainsbury’s
• Pick your own strawberry farm
• Ryanair
• Twitter
• Innocent
• Big Kenny’s...
Objectives
• To understand the
terms “Adding value”
and “added value”
• Explain how a business
can add value to
resources
...
Questions
• List up to three ways in which a hotel
could improve its added value
• Identify three benefits of a business t...
Risk
• Identify the main risk from each of the
following:
• Doubling the advertising budget when a
firms sales haven’t inc...
Quick Quiz!
• http://www.tutor2u.net/business/qui
z/buss1/addedvalue/quiz.html
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As business transforming resources

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Transcript of "As business transforming resources"

  1. 1. AS Business Transforming resources into goods and services
  2. 2. Starter
  3. 3. Objectives • To understand the terms “Adding value” and “added value” • Explain how a business can add value to resources • Be able to apply the classification of business activity by sector
  4. 4. Spot the difference… £8,750 £99
  5. 5. What is added value? • Added value is the increased worth that a business creates for itself For example: If it costs Cadbury’s £0.25p to make this And they sell it for £0.75p. How much added value do they make?
  6. 6. Added value formula • Added value = Price of finished product –cost of resources
  7. 7. Objectives • To understand the terms “Adding value” and “added value” • Explain how a business can add value to resources • Be able to apply the classification of business activity by sector
  8. 8. How can you add value to your resources? Product Quality Design Formula Customer Service Convenience Branding USP
  9. 9. The benefits of adding value • Differentiation from the competition • Charging a higher price • Higher profit margins • Targeting product or service at a different market segment
  10. 10. So back to your ideas • How will it cost to buy the resources? • What will the selling price for your finished product be? • How much value have you added?
  11. 11. Objectives • To understand the terms “Adding value” and “added value” • Explain how a business can add value to resources • Be able to apply the classification of business activity by sector
  12. 12. Key Terms At its simplest, a business is a process whereby inputs are processed to produce outputs. • Input –something that contributes to the production of a product or service • Output –something that occurs as a result of the transformation of business inputs
  13. 13. Different Business Sectors
  14. 14. Primary Sector • Primary Sector – extract raw materials from land or sea, e.g. Mining, Farming, Fishing, Oil, Gas, Forestry.
  15. 15. Secondary Sector • Secondary Sector – use raw materials to make finished goods, e.g. Cars, Ships, Furniture, Roads, Buildings, Bridges
  16. 16. Tertiary Sector • Tertiary Sector – provides a service to industry/consumers, e.g. Retail / plumbers/ electricians / education / health..
  17. 17. Quaternary Sector • Quaternary Sector – businesses that transform information e.g Google / facebook / ICT
  18. 18. P, S or T? • Cadburys chocolate • Sainsbury’s • Pick your own strawberry farm • Ryanair • Twitter • Innocent • Big Kenny’s Kebab Kave
  19. 19. Objectives • To understand the terms “Adding value” and “added value” • Explain how a business can add value to resources • Be able to apply the classification of business activity by sector
  20. 20. Questions • List up to three ways in which a hotel could improve its added value • Identify three benefits of a business that successfully manages to add value in the production process • Explain why added value is not the same as the profit earned by a business
  21. 21. Risk • Identify the main risk from each of the following: • Doubling the advertising budget when a firms sales haven’t increased compared with last year • A bakery switching to a new supplier of flour • A entrepreneur borrowing £80,000 secured against his house.
  22. 22. Quick Quiz! • http://www.tutor2u.net/business/qui z/buss1/addedvalue/quiz.html
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