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Business 1.1 - Purpose and nature of business activity - Coggle Diagram
Business 1.1 - Purpose and nature of business activity
Needs
You could not live without it.
Essential item
Wants
You don’t really need, but you like it.
Nnon-essential item.
Non-essential item
Scarcity
Shortage of the resource.
Makes products more expensive .
Because of the demand, produced by limited supply.
4 factors of production
Land
Physical place, where is located.
Labour
People who work in it.
Capital
Cash or goods, to generate income and to function
Enterprise
Skills to run the business.
Opportunity costs
A lot of options
Whichever decision is an opportunity missed.
Doing opportunity costs
Specialisation
Different skills
Different jobs
Division of Labour
Employees
Region
Country
Business
Purpose of business activity
Satisfy needs and wants of the customers.
Aim make a profit
Put profits earn into:
Charitable programs
Initiatives
How the business is organised
Shapes the purpose and activity of it.
Adding value
Key: produce a product that is more profitable than the cost of development.
Customers are persuaded to spend more than the total.
Allowing the business to make a profit.
How to add value
Design
Product unique and different to the competition
Quality and efficiency
“Better the quality, higher the price”.
Marketing
Makes you want to buy the product, doing to pay more.
Because of the brand.
Convenience
Customers are forced to pay higher prices.
Due to the lack of alternative products.
Or by its location