Enterprise Nature and Business Types
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Questions and Answers

Which external factor may cause businesses to switch production locations?

  • Social media influence
  • Changes in consumer preferences
  • New marketing strategies
  • Increased labor costs (correct)

    • What may result from new laws affecting certain products?

  • Increased market competition
  • Inability to produce certain products (correct)
  • Lower demand for alternative products
  • Changes in production techniques

    • Which of the following is a potential effect of government trade treaties?

  • Increased sales to partner countries (correct)
  • Decreased employment in local industries
  • Enhanced competition within the country
  • Higher production costs domestically

    • During the COVID-19 pandemic lockdowns, what was a common consumer behavior observed?

    <p>Panic-buying of essential goods (A)</p> Signup and view all the answers

    What aspect of the business environment requires continuous monitoring?

    <p>External technological advancements (D)</p> Signup and view all the answers

    What may affect demand for products in a business's market?

    <p>All of the above (D)</p> Signup and view all the answers

    What critical change could technology bring to the transformation process in businesses?

    <p>Improvements in production efficiency (A)</p> Signup and view all the answers

    Which area may significantly impact businesses in the health sector?

    <p>Demographic changes (C)</p> Signup and view all the answers

    What is the primary purpose of business objectives?

    <p>To set measurable targets within a timeframe (B)</p> Signup and view all the answers

    Which factor of production is most affected by the quality of a location?

    <p>Land (A)</p> Signup and view all the answers

    How can the choice of inputs impact a business?

    <p>It can determine both costs and quality of the final product. (B)</p> Signup and view all the answers

    Why is access to resources critical for some businesses?

    <p>It is vital for operations such as oil drilling and mining. (B)</p> Signup and view all the answers

    What is the primary focus of the publication from Berkeley Earth as stated in the content?

    <p>Environmental changes over time (A)</p> Signup and view all the answers

    What recent trend has influenced customer interest in production processes?

    <p>An increasing concern for resource sourcing and sustainability. (C)</p> Signup and view all the answers

    Which organization released an environmental report in 2019 according to the sources listed?

    <p>Toshiba Corporation (C)</p> Signup and view all the answers

    Which statement reflects the significance of land in the primary sector?

    <p>Changes to land quality can directly affect farming outcomes. (B)</p> Signup and view all the answers

    What aspect of business does the McKinsey & Company document primarily address?

    <p>Africa’s business revolution (C)</p> Signup and view all the answers

    What aspect of land is included beyond geographical location?

    <p>Premises used for business operations. (C)</p> Signup and view all the answers

    What is Hachette UK’s environmental policy regarding the paper used in publishing?

    <p>Use renewable and recyclable products from well-managed forests (D)</p> Signup and view all the answers

    Which of the following is NOT a factor of production?

    <p>Technology (D)</p> Signup and view all the answers

    In which year was the first edition of the publication by Malcolm Surridge and Andrew Gillespie released?

    <p>2014 (D)</p> Signup and view all the answers

    Which company is linked with the 'Energy with Purpose' initiative as per the sources provided?

    <p>BP p.l.c. (C)</p> Signup and view all the answers

    What does the ISBN number 978 1 3983 0811 4 signify?

    <p>A unique identifier for the publication (D)</p> Signup and view all the answers

    Which method can be used to find a relocated web page according to the content?

    <p>Search using the website's home page address (A)</p> Signup and view all the answers

    What distinguishes a multinational from an international business?

    <p>Multinationals have production bases in other countries. (C)</p> Signup and view all the answers

    What is a primary reason IKEA uses flat-pack furniture design?

    <p>To lower transport costs and maximize storage efficiency (D)</p> Signup and view all the answers

    What advantage do multinationals gain by being closer to their markets?

    <p>They can better understand consumer preferences. (D)</p> Signup and view all the answers

    How does being a multinational help in overcoming product restrictions in a host country?

    <p>They establish manufacturing within the host country. (C)</p> Signup and view all the answers

    How does IKEA's approach to customer participation contribute to its value chain?

    <p>It facilitates the production of affordable furniture at scale (C)</p> Signup and view all the answers

    What is one of the benefits of spreading risk as a multinational?

    <p>It allows for production to continue in other locations during disruptions. (B)</p> Signup and view all the answers

    In what way does IKEA aim to add value to customers' everyday lives?

    <p>By producing high-quality furniture that is easy to assemble (A)</p> Signup and view all the answers

    What percentage of new businesses would be expected to survive after five years if 400,000 start up, given the failure rates stated?

    <p>96,000 (C)</p> Signup and view all the answers

    What aspect of IKEA's furniture contributes to keeping prices low for customers?

    <p>Encouraging self-assembly to cut costs (A)</p> Signup and view all the answers

    Which term best describes the forces that influence IKEA's pricing strategy?

    <p>Market forces of supply and demand (B)</p> Signup and view all the answers

    What primary risk do multinationals mitigate by diversifying their production bases?

    <p>Production disruption due to localized events. (D)</p> Signup and view all the answers

    What might a government provide to incentivize a multinational to open a production facility in their country?

    <p>Subsidies and tax breaks. (D)</p> Signup and view all the answers

    What role does collaboration play in IKEA’s operational strategy?

    <p>It streamlines the production process and reduces costs (C)</p> Signup and view all the answers

    What is a potential downside for a multinational when expanding internationally?

    <p>Complexity in managing varying regulations. (A)</p> Signup and view all the answers

    How does IKEA distinguish itself in the market according to its brand strategy?

    <p>By creating recognizable and relatable brand design elements (B)</p> Signup and view all the answers

    What is the primary purpose of business activity?

    <p>To transform inputs into outputs that satisfy consumer needs. (A)</p> Signup and view all the answers

    What is one potential drawback of IKEA’s flat-pack furniture model?

    <p>Decreased quality perception among customers (B)</p> Signup and view all the answers

    Which characteristic distinctly differentiates multinational businesses from national businesses?

    <p>They manage operations in multiple countries and have a global reach. (C)</p> Signup and view all the answers

    What role does an entrepreneur primarily play in the economy?

    <p>Creating new business ventures and driving innovation. (D)</p> Signup and view all the answers

    What is one common barrier to entrepreneurship?

    <p>Limited access to capital and financial resources. (D)</p> Signup and view all the answers

    Which of the following best describes the transformation process in business?

    <p>Taking inputs and creatively changing them to meet market demands. (B)</p> Signup and view all the answers

    What is a key limitation of business plans?

    <p>They can become outdated quickly due to changing market conditions. (A)</p> Signup and view all the answers

    Which statement accurately reflects the relationship between business risks and uncertainty?

    <p>Uncertainty can lead to both increased opportunities and risks for businesses. (A)</p> Signup and view all the answers

    Why is the concept of adding value crucial for businesses?

    <p>It ensures products meet consumer demands and enhance business profitability. (C)</p> Signup and view all the answers

    Study Notes

    1.1 Enterprise

    • Nature of Business Activity: Businesses transform inputs (factors of production: land, labor, capital, and enterprise) into outputs. This process adds value. Businesses aim to fulfill objectives (e.g., sales, profits) within a timeframe.

    • Types of Businesses: Businesses can be local, national, international, or multinational. Multinational companies have production or office locations in multiple countries.

    • Entrepreneur/Intrapreneur: Entrepreneurs start new businesses. Intrapreneurs innovate within existing organizations. Entrepreneurs are crucial to the economy. Barriers to entrepreneurship exist.

    • Business Risk & Uncertainty: Businesses face risk (potential for loss) and uncertainty (difficulty predicting future events).

    • Business Plans: Business plans outline business strategies, key elements, and limitations.

    • IKEA Value Chain: IKEA adds value through flat-packing furniture to reduce transport costs and lower prices. Collaboration with customers and partners is essential.

    • Factors of Production (Land): Land encompasses location (e.g., retail shops), land quality (e.g., farming), and resource accessibility (e.g., oil drilling). Primary sector businesses are heavily reliant on land.

    External Influences

    • Market Forces: Supply and demand influence business decisions, including costs and availability of inputs.

    • Government Involvement: Governments often control essential services or sectors. External factors affect product demand, input costs, and transformation processes. Businesses must monitor external changes, especially industry-specific factors.

    Case Study: Lockdown

    • COVID-19 Impact: The 2020 pandemic forced business closures and operational adjustments, leading to supply chain disruptions. Panic buying occurred, and there was concern about economic recovery.

    Business Failure Rates

    • Business Failure Statics: High failure rates are common for new businesses within the first few years. A significant portion of new businesses experience failure.

    Business Definitions

    • Multinational vs. International: Multinational companies have production bases in multiple countries, diversifying risks. International businesses trade or buy from other locations.

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    Description

    This quiz covers the fundamentals of enterprise, exploring the nature of business activities and the various types of businesses, including local, national, and multinational firms. It also delves into the roles of entrepreneurs and intrapreneurs, as well as the importance of business planning and value creation, using IKEA as a case study. Test your understanding of business objectives, risks, and strategies.

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