Part two bs

• Concepts discussed within the business scope

  • Needs
  • Wants
  • Demand
  • Exchange
  • Transaction
  • Value
  • Satisfaction
  • Production
  • Product
  • Market
  • Profit
• Needs


  Food, shelter, education, etc.
• Wants


  Non-essential for human existence, unlimited, vary from person to person, can be created by business and social forces
• Methods to fulfil needs and wants

  • Self-production (ethical)
  • Coercion (Force) (unethical)
  • Begging (unethical)
  • Exchange (ethical)
  • Stealing (unethical)
• Needs


  Limited, common to everyone, essential for living and survival, cannot be created by business, social forces cannot change
• Wants


  Unlimited, vary according to the person, not essential, can be created by business, social forces can change
• Demand


  Consumer's desire and ability to purchase a good or service, the underlying force that drives economic growth and expansion
• Effective demand


  Willingness of people to purchase, purchasing power, access to purchase
• Exchange


  Transferring two or more products between two or more parties
• Factors for effective exchange

  • Two or more parties
  • Two or more values
  • Communication between parties
  • Agreement between parties
  • Freedom to accept and reject
• Transaction


  Exchanging two or more values for monetary payment, should be recorded for future reference and evaluation
• Value


  Estimation made by the consumer on a product based on its ability to fulfill needs and wants, benefits are decided by quality and service, cost is decided by price
• Satisfaction


  Pleasant feeling a person gets when they receive something they wanted or do something they wanted to do
• Production


  Process of producing goods, services and ideas to satisfy the expectations of people and customers
• Product


  Final outcome of the production process, has the capacity to satisfy needs and wants
• Market


  Any situation that connects buyers and sellers, total number of customers a particular business has
• Types of markets


  • Market space (where buyers and sellers meet electronically)
  • Market place (where buyers and sellers meet physically)
• What commerce can be equal to

  • Primary production
  • Secondary production
  • Tertiary production
  • Trading
  • Support services
• Common characteristics of Business

  • Involve sale or exchange
  • Every business should participate in some selling activities or exchanging activities under a monitory value
• Example of a business


  • If a mother makes food for the family, it's not a business. But if she makes lunch packets and sells them for Rs. 200, it is a business.
• Barter system was the first stage of business
• Goods and services


  Traded by businesses
• Businesses


  • Should deal with goods and services that satisfy human expectations
  • Can sell both goods and services
• Regular dealings


  • Businesses should participate in buying and selling transactions continuously
  • Businesses should introduce some identified products to the market again and again without taking a break
• Motives of businesses


  • Profit motive (monetary benefit)
  • Personal benefit (reputation or personal satisfaction)
• Business risks


  • High competition in the market
  • Changes in production methods & technologies
  • Incorrect management decisions
  • Lack of raw materials or power shortages
  • Problems from employees and their strikes
  • Natural disasters and theft
  • Unexpected changes in consumer taste
• Create wants


  Businesses generate wants in society by producing different types of products that have the capacity to increase the living standards of people
• Economic activity


  • Businesses participate in different economic activities and make value addition to resources and the economy
  • Businesses effectively utilize limited resources