Definitions

• Business Activity

  • Providing goods and services to satisfy customers needs and wants.
• Needs

  • Items essential for survival (e.g food, clothing, and shelter)
• Wants

  • Luxurious items that are not essential (e.g holidays, mobile phones, cars and etc)
• Goods

  • Tangible items that we get ownership of when we purchase them.
• Services 


  Intangible items that are done for us (e.g banking health, getting a haircut)
• Land

  • The land resources used to make a good or service (e.g oil, water, land)
• Labour

  • The human resource to produce the good or service.
• Capital

  • Man-made resources used to make the good or service that money has been invested into (e.g. machinery, tools and factories.)
• Organisation

  • Groups of people who combine their efforts and use their resource for a particular purpose.
• Business Organisations

  • Organisations who purpose is to satisfy consumer's wants by producing good and services.
• Share

  • One of the equal parts into which a business capital is divided, entitling the holder to a proportions to the profits.
• Stock exchange

  • A market where shares are bought and sold.
• Dividend

  • A share of business profits paid regularly to it's shareholders.
• Subsidiary

  • A branch of multi-national cooperation in a different country.
• Market share

  • A percentage of total shares in a market captured by the business.
• Economies of sales

  • Savings in costs gained by an increased level of production.
• Objective

  • Something an organisations sets up to a achieve.
• Maximising profits

  • To make as much profit as possible
  • Private sector aim
  • Keeps shareholders satisfied, ensuring future investment
  • Generates money for future growth
• Survival

  • Private and third sector aim
  • To avoid going out of business and having to cease trade
  • Allows a business to respond to changes in the market, such as recession
• Satisficing

  • To aim for a satisfactory result rather than for the best possible income
  • Short term objective set at times for uncertainty, such as economics changes, or when new legislation is introduced
• Providing a quality service

  • Public, private and third sector aim.
  • Encourages customers to return and gives the business a good reputation that will attract new customers (private)
  • Satisfies the needs of the communities and improves the standards of living in the areas (public)
  • Helps the organisation to better aid the individuals or the groups they aim to help (third)
• Increasing market share

  • To increase the percentage of total shares in a market a business has
  • Private sector aim
  • Allows the firm to weaken the competition
  • Takes a firm closer to becoming a market leader
• Managerial objectives

  • When managers pursue their own objectives to improve their status in the business
  • Motivates them, helping the business to operate more efficiently
  • Examples include to expand into new markets or to develop to new technologies
• Sales maximisation

  • To make as many sales as possible
  • Private sector aim
  • Allows the business to increase their market share
  • Also helps them get rid of unwanted stock
  • Could be achieved by dropping product prices
• Corporate social responsibility (CSR)

  • When an organisation aims to act in an ethical or in an responsible way
  • Can be achieved through philanthropy and by being ethically and being environmentally responsible
  • Gives business a good reputation
  • Allows them to win customers from less ethical competitors
  • Can help attract high quality staff who believe in their mission.