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The Purpose Of Business Activity by Mind Map: The Purpose Of Business Activity
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The Purpose Of Business Activity

Business Objective

This is an aim or a target to work towards

·to make profit, Profit are needed to pay a return to the owners of the business, Without any profit at all, the owners are likely to close the business

·to increase added value

·growth, ·to make jobs more secure if the business is larger, ·to expand the business, ·to open up new possibilities and help to spread the risks of the business, ·to obtain economies of scale from business expansion

·to achieve business survival

·to provide a service to the community

Business Shakeholders & Their main objectives

A SHAKEHOLDER is any person or group with a direct interest in the performance and activities of a business

Owners: Profits, return on capital

Managers: Salaries, status ,control

Workers: Income, job secuities, satisfying works

Community: Jobs, clean environment, safe products

Customers: Goods and services qualities, good values

Government: Employment ,taxes, increasing national, output

The economic problem: Needs and Wants

your needs—those things you think necessary for living



your wants—things you would like to have, but which is not essential for living(Unlimited)



ECNOMIC PROBLEM results from there being unlimited wants but limited resources to produce the goods and survices to satisfy those wants →Unlimited wants + Limited resources = SCARCITY

Factors of production—the resources needed to produce goods or services

·Land —It is used to cover all of the nature resources.(fields,forest,metals,mineral resouces)

·Labour—This is the efforts of people needed to make products

·Capital—This is th finance, machinery and equipment needed for maufactures of goods

·Enterprise—The skill and risk-taking ability of a person who brings resources and other factors of production together properly to produce a good or service.People like this are called enterprise

Business Activity

Why needed?

·Unlimited wants

·The four factors of production are in limited supply

·Need to make choices through business activity

·, ·Specialisation improve the efficiency

One thing in commom

They combine factors of production to make products which satisfy people's want, Products, goods and services which are needed to satisfy the needs & wants, Employ people and pay them to allow them to consume products made by other people

Limited resources : the need to choose

Opportunity cost—opportunity cost is the next best alterntive given up by choosing another item

Everybody makes choices,in which we need to consider carefully the opportunity cost to make sure it is not worth more to us than the item we are buying

Making the best use of limited resources:SPECIALIZATION

Division of labou(specialization)—it is when the production process is split up into different tasks an each worker performs one of these tasks, Advantages:, ·Workers are trained in one task and specializa in this, efficiency and output can be increase, ·It can waste some time to move one workbench to another, Disadvantages, ·Workers will be boring if they just do one job, efficiency may fall, ·This is a chain of production. Productions might be stopped if a worker is absent and nobody can do instead

Value added

The diiference between the selling price of a product or servive and the cost of bought in materials and componnents

Higher value added mean that the value of the firm's output rises

HOW can business increase value add, ·Provide better service, ·Well-know brand, ·More and better promotions, ·Better quality, ·Upgrade of products, ·Improve the surrounding of storefront