Business Studies: Sectors and Production Factors
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Questions and Answers

What is the definition of a brand?

  • A unique design, sign, symbol, and/or words identifying a product (correct)
  • A method for conducting market research
  • A price strategy for products
  • A type of advertisement used to promote services

    • Which of the following is not a reason to sell high-quality products?

  • High levels of customer satisfaction
  • Higher customer loyalty
  • Increased brand recognition
  • Lower production costs (correct)

    • Which strategy makes adverts easier to avoid?

  • Free gifts
  • Use of technology (correct)
  • Public relations
  • Sponsorship

    • What is indicated by the term 'catch up TV'?

    <p>Television programming that is available to watch later</p> Signup and view all the answers

    What is the primary role of an entrepreneur in business?

    <p>To take on financial risks to create a profit</p> Signup and view all the answers

    Which of the following is a feature often associated with branded products?

    <p>Unique identification that differentiates from competitors</p> Signup and view all the answers

    Which of the following is NOT mentioned as a reason for starting a business?

    <p>Desire to avoid work</p> Signup and view all the answers

    Which factor is NOT one of the factors of production that an entrepreneur brings together?

    <p>Market demand</p> Signup and view all the answers

    What is a benefit of cinema promotions during specific programmes?

    <p>Encouraging attendance from a local/captive audience</p> Signup and view all the answers

    How does building a business contribute to personal and family goals?

    <p>By filling a gap in the market</p> Signup and view all the answers

    Which of the following is NOT a disadvantage of television advertising?

    <p>It is always effective for brand loyalty</p> Signup and view all the answers

    What aspect of entrepreneurship satisfies personal ambition?

    <p>Being one's own boss</p> Signup and view all the answers

    What type of events can cinemas hold to attract local audiences?

    <p>Food festivals and Christmas markets</p> Signup and view all the answers

    Which promotional strategy is designed to encourage attendance at cinemas?

    <p>Buy one get one free or multi-buy offers</p> Signup and view all the answers

    What is one reason that people may not prefer television ads?

    <p>They are accustomed to ignoring commercials</p> Signup and view all the answers

    What is a likely advantage of internal (organic) growth for a business?

    <p>Greater control over operational processes</p> Signup and view all the answers

    Which of the following is NOT a potential advantage of a takeover?

    <p>Guaranteed job security for all employees</p> Signup and view all the answers

    What is one risk associated with a merger or takeover?

    <p>The merger or takeover may not yield expected benefits</p> Signup and view all the answers

    How can a business gain a competitive advantage?

    <p>By reducing costs and increasing advertising</p> Signup and view all the answers

    What is a disadvantage for workers in the event of a takeover?

    <p>Redundancies if locations are closed</p> Signup and view all the answers

    What is NOT a characteristic of internal (organic) growth?

    <p>Dependence on external markets</p> Signup and view all the answers

    What does 'economies of scale' refer to in the context of company growth?

    <p>Reductions in per-unit costs as production scales up</p> Signup and view all the answers

    What is one way that a business can spread risk?

    <p>By selling a wide variety of goods/services</p> Signup and view all the answers

    What is one potential advantage of a merger or takeover for a business?

    <p>Allows the business to grow at a more sensible rate in the long run</p> Signup and view all the answers

    What is a disadvantage of a takeover related to the business workforce?

    <p>Creation of a bad feeling among the workforce</p> Signup and view all the answers

    How can takeovers potentially affect customers?

    <p>Customers may experience lower prices through economies of scale</p> Signup and view all the answers

    What does diversification in business allow?

    <p>The ability to enter a different market while maintaining current operations</p> Signup and view all the answers

    What is a common misconception about the growth achieved through mergers?

    <p>It may depend on the overall market growth</p> Signup and view all the answers

    Which of the following is NOT a concern for shareholders after a takeover?

    <p>Possibility of higher dividends</p> Signup and view all the answers

    What is a possible negative outcome of long-term mergers for companies?

    <p>Difficulties in agreeing on a new business culture</p> Signup and view all the answers

    What might shareholders prioritize over the potential for slower growth through mergers?

    <p>The possibility of more rapid revenue and profit growth</p> Signup and view all the answers

    What is one key advantage of having limited liability in a company?

    <p>Owners are only liable for the money they invested</p> Signup and view all the answers

    How does the divorce of ownership and control benefit a business?

    <p>It allows owners to manage the business while focusing on different interests</p> Signup and view all the answers

    What could be considered a disadvantage of inviting shareholders into a company?

    <p>Decision-making may need to be shared with others</p> Signup and view all the answers

    What is a potential drawback of needing to publish accounts?

    <p>It can be costly to produce the required documents</p> Signup and view all the answers

    Why might a company experience limited capital when inviting shareholders?

    <p>Companies may fail to attract sufficient investors</p> Signup and view all the answers

    What advantage does selling shares provide a company?

    <p>It increases available capital for expansion projects</p> Signup and view all the answers

    What is a consequence of needing to share profits with shareholders?

    <p>It may limit funds available for reinvestment into the business</p> Signup and view all the answers

    Which of the following is a disadvantage related to control after inviting multiple shareholders?

    <p>Majority shareholders may dominate decision-making processes</p> Signup and view all the answers

    What advantage does specialized management provide in a company?

    <p>Different managers can handle their specific areas of expertise</p> Signup and view all the answers

    What is the significance of continuity in a business structure?

    <p>It ensures the business remains operational regardless of changes in ownership</p> Signup and view all the answers

    Study Notes

    Business Activity

    • Businesses are involved in the production of goods and services.
    • The activities of a business provide jobs and create wealth.

    Sectors of Industry

    • Primary sector: Raw materials are produced. Examples: Farming, mining, forestry.
    • Secondary sector: Raw materials are manufactured into goods. Examples: Factories, manufacturing.
    • Tertiary sector: Businesses in this sector provide a service. Examples: Retailers, hotels, schools.
    • Chain of production: This links the primary, secondary, and tertiary sectors, showing how a product or service is made.

    Factors of Production

    • Land: Natural resources needed.
    • Labour: Physical and mental effort needed for production.
    • Capital: Money (working capital) and fixed capital (machinery).
    • Enterprise: The organizing of the other factors, having ideas for the business.

    Consumers

    • Definition: Final users of goods and services, at the end of the distribution channel.
    • Needs: Essential items for survival. Examples: Food, water, shelter.
    • Wants: Enhance quality of life; not essential for survival. Examples: TV, mobile phone, holidays.

    Goods

    • Definition: Tangible items; physically touchable.
    • Consumer Goods: For final consumers. Examples: Cars, food, clothes.
    • Producer Goods (capital goods): For other businesses to produce goods and services. Examples: Vehicles, computers, robots.
    • Durable goods: Not used up quickly; last long. Examples: TV, mobile phone, machinery.
    • Non-durable goods: Used up immediately or have a lifespan of less than three years. Examples: Food, clothes.

    Services

    • Definition: Intangible items, can't be touched. Examples: Hairdressing, taxi service.
    • Personal services: For individuals. Examples: Grooming, house maintenance, car repair.
    • Commercial services: For businesses. Examples: Transport, warehousing, insurance, banking.

    Markets

    • Definition: Where buyers and sellers exchange goods and services, often for money.

    Retailers

    • Definition: Businesses that sell goods to consumers.
    • Small retailers buy from wholesalers; large retailers directly from manufacturers.
    • Functions: Display goods; promote goods; advise customers.
    • Deal with complaints; Sell goods and services; distribute goods; and provide credit.

    Business Planning

    • Definition: A plan outlining a business' aims, strategies, and requirements to succeed.
    • It helps businesses in decision-making, convincing banks.
    • Includes: Aims, cash flow forecast, owner's credentials, type of ownership, marketing strategies, location, financial information (balance sheets, profit and loss account).

    Revenues and Costs

    • Turnover (revenue): Income from sales of goods or services.
    • Fixed costs: Remain the same regardless of output. Examples: Rent, business rates, loan repayments.
    • Variable costs: Change with the number of goods produced. Examples: Raw materials, electricity.
    • Total costs: Sum of fixed and variable costs.
    • Profit: Difference between total revenue and total costs (when revenue is higher).

    Business Ownership

    • Public Sector: Government-owned organisations (NHS, police etc). Objectives: Service, accessibility, resources.
    • Private Sector: Private individuals own these businesses. (Sole traders, partnerships, limited companies).
    • Unlimited liability: Owners are fully responsible for business debts.
    • Limited liability: Owners are only liable for the amount they invested.
    • Sole trader: One owner.
    • Partnership: Two or more owners.
    • Private Limited Company (LTD): Owners have limited liability; shares are not available to the public.
    • Public Limited Company (PLC): Owners have limited liability; shares are available to the public.
    • Social Enterprises: Businesses that operate for the benefit of the community or its workers, or as a charity.
    • Charities: Organisations set up to raise money to help the disadvantaged.

    Partnerships

    • At least two people own and run an unincorporated business.
    • Advantages: More capital, extra skills, shared responsibilities, flexibility.
    • Disadvantages: Disagreements, shared profits, reduced independence & loss of control.
    • Deed of partnership: A legal document outlining rules of partnership, costs, and profit sharing.

    Business Location

    • Definition: Geographical area where a business operates.
    • Site: Specific place within this area.
    • Factors to consider: Availability of space, customers, cost of rent, infrastructure, access, passing trade, parking.
    • Footfall: Number of people passing by a business.
    • Is closeness to competitors always bad?

    Business Growth

    • Internal Growth: Increasing sales, revenue, profits and workforce through internal methods.
    • External Growth: Acquires or merges with another business.
    • Merger: Two or more businesses join together to form a new one.
    • Takeover/Acquisition: One business gains control of another.
    • Diversification: Entering a new market alongside the current market.

    Types of Integration

    • Conglomerate integration: Joining businesses in entirely different industries. Examples: Electronics and coffee.
    • Vertical forward integration: Taking over a business in the later stage of the production process.
    • Vertical backwards integration: Taking over a previous stage of the production process.
    • Horizontal integration: Taking over businesses that produce a similar product.

    Marketing Mix

    • Product: What do customers want
    • Price: How much will customers pay
    • Place: Where will customers buy from you
    • Promotion: How will you advertise your product to customers

    Marketing

    • Above the line: Paid promotion, examples include TV adverts, radio, newspapers.
    • Below the line: Direct communication with customers, examples include loyalty cards, competitions, posters.

    E-commerce and M-commerce

    • E-commerce: Buying or selling online.
    • M-commerce: Buying or selling through mobile devices.
    • Benefits: Wider appeal and lower costs, can include data analytics → customer profiles.
    • Disadvantages: Goods can't be examined, risk of fraud or misleading information, and technical difficulties.

    Product Life Cycle

    • The stages a product goes through from development to no longer being available on the market.

    External influences

    • Economic factors: Employment rates, economic climate, exchange rates, inflation, consumer spending, unemployment rate.
    • International trade & globalisation: Advantages: Access to wider markets, larger pool of workers, and lower costs. Disadvantages: Competition from other businesses operating internationally, language barriers, and exchange rate fluctuations.
    • European Union: Advantages: Free movement of goods & people, increase competition within and outside businesses. Disadvantages: Different regulations and rules applying throughout the trade area, could have an impact on the competitiveness of businesses.
    • Employment law: Regulations cover working conditions (health and safety, working hours, pay), and employment contract terms.
    • Government regulations: Taxes (VAT and income tax); health and safety legislation for workers and the business; and environmental regulations.
    • Ethical considerations: Consumer and employee wellbeing are important factors affecting business decisions; environmental considerations affecting activities; animal rights issues.
    • Quality standards: Enforce product quality standards and meet customer expectations to maintain standards.
    • Environmental issues: Impact of a business' activities on the environment, such as pollution, energy consumption.
    • Consumer legislation: Laws to protect consumers from unfair business practices.

    Finance

    • Costs & expenses: Fixed and variable costs.
    • Revenues & income: Turnover (sales revenue)
    • Profit & Profit margin: Calculation of profit, and gross/net profit margins.
    • Internal and External sources of finance: Business plan and different sources of finance that businesses can use (e.g., Personal savings, bank loans).
    • Cash flow forecast - Setting out a business' inflows and outflows of cash over a period of time, to show potential cash problems and help when applying for a loan.
    • Break-even analysis
    • Stakeholder considerations for a business.

    Business Operations

    • Production methods: Job, batch, and flow production.
    • Stock control methods: Buffer stock and Just-in-Time
    • Supply chain management: Procurement, logistics, warehousing.
    • Technology: Use of information and communications technology, computer-aided design (CAD), computer-aided manufacturing (CAM), 3D-printing.
    • Customer service, loyalty building.

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    GCSE Business PDF

    Description

    Explore the fundamental concepts of business activities, including the different sectors of industry and the essential factors of production. Understand the roles of land, labour, capital, and enterprise, as well as the importance of consumers. This quiz will enhance your knowledge of how businesses function within the economy.

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