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GCSE: Business, Companies and Organisation, Activity
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Five different forms of ownership that you should know
- 1 Sole traders or sole proprietors are the simplest form of business ownership requiring no legal documentation. Anyone can just set themselves up in business. It is by far the commonest form of business organisation. One of the main problems is that it can be hard to get finance to expand. This is in part because it has unlimited liability. That is full responsibility for all debts
- 2 Partnerships are where from 2 to 20 people join together to form a business. This gives each person access to more finance and expertise. They also have unlimited liability which can make it difficult to get the finance to expand.
- 3 Private Limited Companies (ltd after their name) are legally set up and enable the business to raise more finance by selling shares (part ownership) of the business. They have limited liability which means that investors can only lose the amount they have invested in the business. People must be invited to become shareholders and can only sell their shares with the permission of the other shareholders.
- 4 Public Limited Companies (PLC after their name) can sell shares to anyone and there are no restrictions on who can and cannot own the shares. They also have limited liability. These tend to be the largest businesses.
- 5 Cooperatives are owned usually by the employees. The employees pool their money and usually share responsibility for the decisions of the business.
What are the names of different sectors of industry?
- 1 The primary sector is concerned with the mining, growing and extraction of raw materials that are used to produce other things. Examples include farming, mining, forestry and fishing. Before the industrial revolution (about 1760 to 1830) this was the biggest sector in the UK. Now it is the smallest, employing less than 2% of the workforce.
- 2 The secondary sector is the part of the economy concerned with manufacturing. It therefore involves turning primary products into other products that consumers and businesses will use. As a percentage of employment, this has fallen in the UK in recent years as more manufacturing is done abroad. The UK still manufactures many goods.
- 3 The tertiary sector is also called the service sector. It supports the production and distribution of products so includes industries like banking, retail, advertising and distribution. It is the largest sector of the UK economy.
- 4 Some commentators talk of the quaternary sector which is concerned with intellectual activities and the knowledge based part of the economy such as scientific research, government, libraries and information technology.
- 5 Goods move through the different sectors through what is known as the ‘chain of production’. So for instance oil comes from the primary sector where it is extracted from an oil well, to the secondary sector where it is refined into petrol or other products and then to the tertiary sector where it is sold to the consumers in a service station.
Five business aims
- 1 Most privately owned business aims to make a profit. This may only be in the long run. In the short run, a business may aim to increase market share or develop new products which will reduce profits in the short run.
- 2 Many businesses are in the public sector. This means that they are owned by the government or local government. Their main aim will usually be to provide a service to the public. They may charge for it to cover some of the costs but making a profit is unlikely to be an aim.
- 3 Businesses in the voluntary sector are usually charities that raise money to provide help to particular groups.
- 4 Businesses will normally have objectives which are much shorter term and are measures that will help them achieve their overall aim. It may relate to a level of sales (private sector), a level of service (public sector) or a particular group that will be helped (voluntary sector).
- 5 The terms private and public can get confusing. Private sector means owned by private individuals although it may be a public limited company. This means that shares in the company can be bought by any member of the public. However, it is still in the private sector.
- Marked by Teachers essays 12
- Peer Reviewed essays 4
Or the marketing function might include wrong information about the new car. Either of these things will result in a weak advertising campaign, attracting less customers to buy the car and therefore lead to a loss of profit for Toyota. Another consequence could also be damage to Toyota?s reputation due to incomplete information for customers. If the finance function did not work effectively with the other functional areas at Toyota then these other departments might over or under spend. If they over spend then the costs to Toyota will increase which will mean less profit.
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This will cost Tesco money due to the hiring and training of new staff; reducing their overall profit. Shareholders will want a share of the profits (dividend) rather than the profits being put back into the business or paid to employees via bonuses. If Tesco do not meet this need then shareholders might sell their shares in the company. This will reduce the price of Tesco?s shares, which might cause people to lose confidence in the business making it harder for Tesco to get investment. The local community will want jobs from Tesco but not a lot of noise or litter around their area.
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Leo now employs staff to make the furniture and to manage the various functional areas within the business. Actual Question Changes in the external environment can impact on the activities of a business. These include: * The level of consumer spending * New competitors entering the market. Evaluate whether the changes in the level of consumer spending or the entry of new competitors into the market will have the greater impact on SOF. Model Answer Introduction Changes in the external environment could have a big impact on SOF. They currently make and sell office furniture to the public and to businesses Paragraph 1 (analysis of level of consumer spending)
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This will lower their sales revenue. They may also be fined for breaching employment legislation in that country which will increases their costs and lower their profit. Suppliers may also not want to trade with Primark as they may be impacted by their bad reputation to. This will mean they may not get the raw materials to make their clothes. The biggest consequence of not trading ethically for Primark is their loss of reputation as this will have the biggest impact on their profitability.
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This means it would be breaking the equality act 2010 if Primark only displayed the advert in a catholic Church as this implies that Primark only wants catholic employees . This would stop candidates of other religions applying for this particular job as well as not applying at Primark for any job . This would give out bad reputation for Primark . Job description and Person Specification In the job description Primark cannot state different pay rates for different genders .
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And should include sales and marketing. For example, they will need to calculate the levels of sales anticipated and if they seem realistic. Also where and the business intend to promote their products and the financial implications of this. Furthermore, the business plan should include information about the customers. For instance, who and where they are, how, many and why they would choose the businesses products. Lastly, it should state the competition. For example, who and where their major competitors are, their strengths and weaknesses so they can exploit them to perform better.
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Advantages of a franchise is that there is high chance of success as it?s easy to borrow money. Also problems will have been overcome already and a lot of support is available from the franchisor. Furthermore, advertising is organised and paid for by the franchisor which makes work easier. Lastly, franchisees are usually small which means they can work really hard on small details to ensure its good which can benefit sales. Disadvantages of a franchise is that is can be removed if it is becoming unsuccessful.
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The first type of company is private limited companies. Private limited company must have a least 2 shareholders which can only be family and friends. Furthermore, profits made by the company must be paid as dividends to shareholders and they must have LTD in its name. Examples, of a private limited company are Virgin Atlantic and New Look. Advantages of a private limited companies are that if they sell shares they gain all the money from it; they can then use this money towards the business.
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Furthermore, they need to have good locations for these buildings. The buildings must be in an accessible location so that people will easily be able to access their stores. A good location would be in a town where there is good transport and will attract customers to shop there. In addition, they need to have location where they can have their store, a large car park and perhaps a petrol station which some Tesco stores have; because of this Tesco need a location which has large premises for them to build on.
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Fit for purpose - Good information also need to be fit for purpose; this means that the information is relevant to what it?s needed for. For example, if you wanted to open up a new business in Florida; it would be advisable to find information about the area and the population. Whereas finding information about London wouldn?t be fit for purpose. Accessible - Information also needs to be accessible. Accessible information is information that is stored in a way that it can be easily accessed whenever it is needed.
- Word count: 677