WHAT DO BUSINESSES DO?
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Transcript WHAT DO BUSINESSES DO?
AN INTRODUCTION TO
BUSINESS
UNIT 1
PPT 2
1
Businesses Exist ...
To develop a good idea
To make a profit
For charitable reasons
To provide a public service
2
TO DEVELOP A GOOD IDEA
Inventors create new products
An idea for a product/service that no-one
else has brought to market
3
TO MAKE A PROFIT ...
By selling something at a price which is
higher than it cost to provide
Profit is the return on investment made by
the owner or owners. If there is no profit,
they may sell up and invest elsewhere
4
FOR CHARITABLE REASONS ...
Volunteers work to support and help
others
Funds are raised in a number of ways coffee mornings, concerts ...
Red Nose Day for Comic Relief
Company Sponsorship
Collection tins
Setting up “Charity Shop” to sell items
Public Donations - wills, gifts etc
5
TO PROVIDE A PUBLIC SERVICE
Services provided by the Government and
paid for by our taxes
6
Public Services include ...
National Health Service/hospitals
Schools
Roads
Libraries
Education
Armed Services
Police/Fire Services
7
WHAT ARE THE AIMS OF
BUSINESSES?
Most profit-seeking
businesses aim to achieve
some of the following
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BUSINESS AIMS
Survival
Maximise Profit
Growth
Increase
Market Share
New Branches
Foreign Trade
more customers,
beating the competition
Quality
Product/Service
Excellent
Customer Service
Environmentally
Friendly
9
Not all businesses focus solely on
making profits.
Body Shop and The Co-op are
examples of organisations which
have much wider aims.
10
Improving conditions of:
The workforce
many firms provide a variety of “extras” or perks for their
employees eg
cheap food, social clubs/sports facilities,
hairdressing and manicures, flexible hours
The suppliers
especially those in Third World Countries who are often
very badly paid
People in the community
many businesses set aside money to give to charities,
especially local ones
11
A Charity might also have
different aims ...
Help more people
Collect as much money as possible
Recruit more people to help
Open more charity shops
12
Public Sector organisations might
also have different aims ...
Providing a quality service
Providing an efficient service - eg hospital
appointments within a certain time
Cutting costs
Raising revenue - persuading the
Government to allocate more funds
13
Who has an interest in the
business?
Many people can have an interest in
how a business is run and managed
and how it performs...
14
These people are called…
Stakeholders
15
Stakeholders of a large
company
Shareholders
Employees
Suppliers
Directors/
Managers
HM Revenue
and Customs
Customers
16
Stakeholders include …
Owners
owner/managers of small businesses
shareholders of larger companies
will share in profits if business does well
17
Directors/Managers
If the business doesn’t do well, they could
be out of a job!
If business does well could receive a
bonus
18
Employees
As with managers, if the business does
badly, they might lose their jobs
Want to have job security
May not be enough money to pay their
wages
May not receive pay increase if poor
performance
19
HM Revenue and Customs
They have to make sure they collect the
appropriate taxes
20
Government
Provides employment, saves paying
benefits
Creates wealth in the Economy
21
Suppliers
To feel secure that they have a customer
to sell to
Want to ensure they receive payment
22
Customers
want to buy good quality products at a
reasonable price
like variety of goods/choice
23
Local Community
Want to ensure work is carried out safely
Creates employment in the community
leading to increased wealth
24
Pressure Groups
Environmental groups want to ensure no
work is causing pollution/damage to
environment
Workers rights are maintained
25
Banks/Investors
Want business to be successful to ensure
any loans will be repaid
To receive return on their investment
26
Social Costs and Benefits
Social Costs
Traffic congestion
Traffic pollution – poor air
quality
Noise pollution
Health problems
These are negative
effects on a community
as a result of a new
business.
Social Benefits
Improved road
network
New housing
New schools
These are positive effects
on a community as a result
of a new business
27
Economic Costs and Benefits
Economic Costs
Money spent on premises, roads
for new business rather than
other things
Increase in council taxation, eg
Rates
Council tax
Water rates
These are negative money effects
on a community as a result of a
new business
Economic Benefits
jobs – more people
employed
More
More
money available to spend
in local shops
Business
growth
Improved
standard of living
These are positive money effects
on a community as a result of a
new business
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What is a Stakeholder?
Stakeholders are people or organisations that have an interest or
‘stake’ in the way a company is run.
For Example
If a new television programme was introduced and attracted 30
million viewers, who would benefit from it being a success?]
Advertising Companies eg Cadbury’s
The Costume Makers
The Set Designers
The Scriptwriters
These are all examples of Stakeholders as they have an interest in
the success of the programme
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