Introduction to Business
What is the main purpose of a business?
To meet customer needs by providing goods or services.Businesses satisfy needs or wants.
What is recruitment?
The process of finding and attracting suitable employees.Recruitment creates a pool of applicants.
What is marketing?
Identifying, anticipating and satisfying customer needs profitably.Marketing begins with customer needs.
What is finance?
The money needed to start, operate and grow a business.Businesses need funds for their activities.
What is a person who takes the risk of starting a business called?
An entrepreneur.Entrepreneurs organize resources and take risks.
What are the four factors of production?
Land, labour, capital and enterprise.These resources are used to produce goods and services.
What is training that takes place while an employee performs their normal job called?
On-the-job training.Employees learn while working.
What are the four Ps of the traditional marketing mix?
Product, price, promotion and place.Together, they form a marketing strategy.
Is buying a new factory an example of capital expenditure or revenue expenditure?
Capital expenditure.It purchases a long-term asset.
What is the name for money paid regularly to an employee for their work?
A wage or salary.It is a financial reward for work.
What is the difference between the private and public sectors?
Private-sector organizations are owned by individuals; public-sector organizations are owned or controlled by government.The key difference is ownership.
What is labour turnover?
The percentage of employees who leave a business during a period.High turnover means many workers are leaving.
What is market segmentation?
Dividing a market into groups with similar characteristics or needs.It helps businesses target customers more accurately.
Is retained profit an internal or external source of finance?
An internal source of finance.It comes from within the business.
What is the percentage of total market sales earned by one business called?
Market share.It shows the business’s position in the market.
What is the difference between a shareholder and a stakeholder?
A shareholder owns part of a company; a stakeholder is anyone affected by the business.All shareholders are stakeholders, but not all stakeholders are shareholders.
What is one important difference between financial and non-financial motivation?
Financial motivation uses monetary rewards; non-financial motivation uses rewards such as recognition or responsibility.Employees are not motivated only by money.
A company collects information by asking its own customers to complete a questionnaire. Is this primary or secondary market research?
Primary market research.The company collects new, first-hand information.
What is the difference between a fixed cost and a variable cost?
Fixed costs do not change with output; variable costs change as output changes.Rent is usually fixed; materials are usually variable.
Which source of finance allows a business to buy an asset and pay for it over time?
Hire purchase.Payments are spread over an agreed period.
A business wants higher profits, but employees want higher wages. What does this demonstrate?
Stakeholder conflict.Different stakeholder groups can have competing interests.
A manager asks employees for ideas before making the final decision. Which leadership style is being used?
Democratic leadership.Employees participate in decision-making.
A luxury watch business sells highly specialized products to a small, clearly defined customer group. Is this a mass or niche market?
A niche market.It targets a small and specific segment.
A business has sales revenue of $100,000 and cost of sales of $60,000. What is its gross profit?
$40,000.Gross profit = sales revenue − cost of sales.
A business lowers its prices to increase sales but then struggles to cover its costs. What trade-off does this show?
A trade-off between increasing sales and maintaining profit margins.Lower prices may raise demand but reduce profit per unit.