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What is a business?
A business is an organization that is involved in using inputs to produce goods and/or
services.

Factors of Production
Land
Labor
Capital
Entrepreneurship

What is the difference between goods and services?

When you sell good, you focus on the features but whent there is a service you want to
focus on the customer service

Entrepreneurs
A person who plans, and manages a business, taking on risks of doing so

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 Everything in a business is interconnected, and all are used to effectively run a business

The chain of production

It links all the production sectors of a product,by tracking the stages of the item being
produced, all the way until it reaches the customer or consumer.
As the product goes up the chain of production, the more value is added.

Define the Term adding value

Adding value is when a products total value increases going through the production
stages. It can be adding extre features, or making the quality of the good or service
better.

Explain how a McDonals combines factors of production to create

goods (Big Mac and Fries) and services?
Mcdonalds uses land to have a place to make the burger and there is a building where
people can come and sit to eat the food, they use labour to ensure that people are there
to make the burgers and fries, the capital are the machines that the labour uses to make

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 the burger and the enterprise ensures that the employees are working properly and
efficiently.

Human Resources
1. Dismissals

2. Redudancies

3. Appraisal

4. Salaries

5. Training

Finance and Accounts

1. Manages the money

2. Cash Flow

3. Financial Documents for legal requirements and to inform stakeholders

Marketing
1. Product

2. Price

3. Place

4. Promotion

5. Meeting the needs of the customers

Operations Management
1. Actually does the stuff, makes the food, builds the stuff

2. Converting the raw materials to products

3. Does the services for the customer

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 Business Sectors
They can be classifies depending on what stage of production they are in
Primary

Secondary

Tertiary
Quaternary

Primary
Extracting raw materials, harvesting and all that

Fishing

Farmers

Mining

Oil

Secondary
People who make stuff

Car Manafacturers

Tailors

Tertiary Sector
Businesses that provide services to the customers or consumers

Massage

Public Transport

Retailers

Schools

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 Quaternary
Businesses that are knowledge based activities, and are intellectual. They generate
and share information

Scientists

Programers

Researchers

If your in the PHD, your probs in this sector

Sectoral Changes and Business Acitivity

Economic development happens when a business moves their activity to a sector that is
further on the chain of production. Like if a primary sector business intergrates a
secondary sector business.

GETCASH
G = Growth
Capital growth is when the business becomes more valuable over time.

E = Earnings
Making profits

T = Transferance and Inheritance

When you die your kids and family get something

C = Challenge
People like the challenge

A = Autonomy
People dont like working for other people

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 S = Security
Being self employed can have a low chance of being fired

H = Hobbies
People have Passion

Problems that businesses might face

Operations management
Production Problems

Poor Locations

Human Resources
People mangement problems

External Environment
External Influences

Legalities

Marketing
Marketing Problems

Un - Established customer base

Finance
Lack of Finance capital

High Production Costs

Cash Flow Problems

External Influences
Effects all businesses

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 COVID 19

Oil Prices

Interest Rates

Natural Disasters

Explain why the desicion to open 500 new petrol stations in China
will involve effective cooperation between all four business
functions
The operations team needs labour, so it cooperates with HR to get labour which also
needs to be trained. The finance team will help them by giving them enough money to
hire labour and then effectively train them.

Textbook

Inputs Processes Outputs

Human
Capital → → Goods
Resources

Enterprise → Finance → Services

Land → Marketing →

Operations
Labour → →
Management

Goods Services

Goods are tangible, Services are not;

Meaning we can touch and feel goods cannot touch and feel services

Goods are returnable services are not

Can be stored and used later Cannot be stored

Inputs Process Output

Raw Materials Baking Bread

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 Baker Kneading Cakes
Equipment (Oven, Mixer,
Mixing Pastries
Fridge)

Owner

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