Foundation Apprenticeship in Business Skills Understanding Business Role

Foundation Apprenticeship in Business Skills Understanding Business – Role of Business in Contemporary Society

Foundation Apprenticeship Progression Award – 6 units • Understanding Business • Management of People and Finance • Word Processing • Spreadsheets • Contemporary Business Issues • Work Placement

Today we will… • Discuss what a business is and why they exist • Describe needs, wants, goods and services • Explain the role of BUSINESS IN SOCIETY

What is a Business? A business organises people and resources to produce a good or provide a service to satisfy demand

Why do Businesses Exist? • To provide a good or a service • To make a profit • To develop an idea • To fill a gap in the market

Business Start Up Starting up in Business is challenging, but rewarding. There a number of decisions you have to make: • What to sell • Where to sell • Who to sell to • Produce a good or provide a service • Satisfy a need or a want

Goods and Services Decision #1: To produce a good or provide a service? GOODS SERVICE A good is something you can see and touch A service is something you cannot touch This means goods are tangible This means services are intangible

Needs and Wants Needs are very basic items, such as water and food Wants are things you do not need, like computers and phones Question for business: how do we convince people to part with their hard earned money for things they don’t really need?

Business Cycle Customers have money to spend from their wages Produces good and services to satisfy needs and wants Wealth is created for businesses and employees Customers purchase to satisfy needs and wants

Factors of Production ENTERPRISE – Business LABOUR – Employees LAND – Natural Resources CAPITAL – Assets of the business

Sectors of Industry There are four Sectors of Industry Primary Secondary Sectors of industry Tertiary Quaternary

Sectors of Industry The Primary sector of industry involves businesses which extract natural goods from the earth. • • • Fishermen, fish, shellfish Farmers, wheat, meat, fruit Oil drilling, oil, gas Coal miners, coal Foresters, wood Primary

Sectors of Industry These types of businesses are involved with making things (manufacture) • Shipbuilding, ships • Construction, houses • Factories, clothes Main focus – profit generation, sales maximisation, increased market share NB. UK is now more of a service economy rather than a manufacturing economy Secondary

Sectors of Industry These types of businesses do not produce goods but provide services • • • Shops Hotels Window Cleaners Hairdressers Banks Post Office Main focus – generation of profit Tertiary

Sectors of Industry This can also be described as the support sector. It is knowledge based. Quaternary • • • IT consultants, Computing Accountants Media bodies Education Research and Development These are valuable resources for business and industry.

Sectors of Industry UK Industry has seen a vast amount of changes in the past 10 years. Why is this?

Sectors of Industry Decline in manufacturing, steel factories and shipbuilding Global threats, increased competition from abroad Tertiary Sector has grown considerably More disposable income for services, such as beauty

Creation of Wealth is created by a business by adding value to a product as it goes through the production process. Think about a pair of jeans…

Creation of Wealth Cotton is cleaned thoroughly Indigo is used to turn the cotton blue Cotton weaved into denim Parts are cut using templates Workers sew the parts together Jeans are stonewashed to look worn The jeans are pressed

Creation of Wealth – Pros and Cons

Independent Study Activities Log on to Collins Connect using the username and password detailed above – National 5 Business Management Course Notes. Read Chapter 1 Introduction which provides an overview of the assessment standards which have to be achieved to gain a pass for the unit. Read Chapter 2 – The Business Environment – Introduction and Role of Business Sections. You do not need to complete the activities contained within the sections however they may be used for revision purposes. Upload the Industry Sectors activity to i. Learn