1-1 what do businesses do

7/27/2019 1-1 What Do Businesses Do

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Requirements for Engineering Practicerelated to any sub disciplineConcerns with curriculum andqualification and competency ofFaculty.Criteria policies and procedures arecomparable

Programme specific Criteria


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Accreditation Criteria in singapore Criterion 1 - Mission and Program

Educational Objectives

Criterion 2 - Student Learning

Outcomes

Criterion 3 - Curriculum and Teaching

Processes

Criterion 4 Students

Criterion 5 -Faculty Criterion 6 -Facilities and Learning

nvironment

Criterion 7 - Institutional Support

and Financial Resources

Criterion 8 - Governance

Criterion 9 - Interaction between

Educational Institution

and Industry

Criterion 10 Research and

Development

Criterion 11 Specific ProgrammeCriteria

Accreditation Criteria in USAStanford University

Criterion 1. Students

Criterion 2. Program educationalObjectives

Criterion 4 Curriculum

Criterion 5. Program Outcomes andAssessment

Criterion 6. Professional Component

Criterion 7. Faculty Criterion 8. Facilities

Criterion 9. Institutional Supportand Financial Resources

Criterion 10. Program Criteria


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Canadian Engineering Accreditation

Board

Graduate attributes

Continual improvement

Students

Curriculum content andquality

Complementary studies

Laboratory experience

Evaluation ofcurriculum content andquality

Faculty


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Goods and services can be described

as

Durablegoods and services

long lasting

eg clothes, education

Non-durable

goods and services used up quickly

eg sweets, cinema


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WHAT ARE CAPITAL AND CONSUMER

GOODS?

Consumer goods

Goods sold to people (ieconsumers us) for their

own use

Capital goods

Goods used by a business tomake consumer goods andother capital goods


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Difference between NeedsandWants

The following areexamples of goods we

buy

As consumers, we buythe goods offered by arange of organisations/

businesses.


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WHAT IS A NEED?

ANEEDis something an individual must have inorder to survive these are the basic needs or

wants

Food

Shelter

ClothingDrink


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WHAT IS AWANT?

It is important to distinguish between whatwe needand what we want

Ill tell you what I want,What I really, really want,

So tell me what you want,

What you really, really want....


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WHAT IS AWANT?

AWANTis something an individual would like to

have, or wishes for they are not essential

for survival

When a wantis fulfilledit gives the consumerSatisfaction. Examples are:

I-pod

Sports CarVideo Camera

Expensive jewellery


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HOW DOES A BUSINESS KNOWWHAT WE NEEDORWANT?

A business will use Market research to identify whatconsumers need and want.

This information helps the business in decision makingeg whether a new product/service should bedeveloped


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Types of business organisation

PublicLimited

Company

Public

Ownership

Franchise

Private

LimitedCompany

Partner-

ship

SoleTrader

Types ofbusiness


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Sole Trader

FEATURES OF SOLE TRADER

Aims is to make a profit

Business ownedand often runby one personMay employother people in the business

Tend to be smallbusinesses

Examples: Small shops, Car mechanics, Flower shop

Can you name 3 sole trader businesses in Oban?

Albany Stores, Esplanade Post Office, Flower basket.


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Sole Trader

ADVANTAGES:

Owner keeps all theprofits

Owner controls all thedecisions

Easy to set up thebusiness.

DISADVANTAGES:

Owner bears all the

responsibilitiesIf owner cannot workthe business maysuffer lack of cash

Owner may have

difficulty obtainingfinance

Owner has unlimitedliability.


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Partnership

FEATURES OF PARTNERSHIP

Aim is to make a profit

Business between twoand twentypartners

Partners usually enter into a legal agreementcalled aPartnership Agreement which states States share of profit

Which partner has most responsibility

Partners may invest different amountsof money

This will affect their share of profit

Examples: Dentists, vets and lawyers.Can you name 3 partnership businesses in Oban?

Munros Garage, MacCamley and Laird, Stevenson Kennedy (lawyers)


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Partnership

ADVANTAGES:

Partners can shareworkload according to

skillsPartnerships find it

easier to raise financethan sole trader

Risks are sharedbetween partners riskof poor profit

DISADVANTAGES:

Profits shared betweenthe partners

therefore smallershare

More people to runbusiness risks ofdisagreement

Partners usually hasunlimited liability

Legal agreement needsto be set up.


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What are Shares?

Companies are owned by people who areshareholders

Anyone over 18 can buyshares

Shareholders are given a shareof anycompany profits

The share of profits is called a dividendand is payable once or twice yearly


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Private Limited Company

FEATURES OF PRIVATE LIMITED COMPANYAim is to make a profit

Name of the business will end with Ltd

Owned by shareholders minimum ofone

Shares in the company are owned privatelyRun by a Board of Directors

Such companies are often family businesses.

Examples: MacQueen Bros had recently become a Private Ltd Company

Can you name 3 pr ivate l imi ted comp anies in Oban?

Direct Footwear Services Ltd, MacQueen Ltd, Beaver Timber Ltd,


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Private Limited Company

ADVANTAGES:

Owner keeps control ofthe business

Private limited companycan raise more financethat a smaller business

Shareholders havelimited liability.

DISADVANTAGES

Profits shared between

more peopleA legal agreement

must be set up

Shares cannot be sold

to the public, soraising finance can bemore difficult than fora public limitedcompany.


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Public Limited Company (plc)

FEATURES OF A PUBLIC LIMITED COMPANYAim is to make a profit

Name of the business will end with plc

Owned by shareholders minimum oftwo

Minimum share capital of50,000Shares in the company can be bought and soldon the

Stock Exchange

Run by a Board of Directors

Examples: BP plc, Boots plc, Tesco plc.Can yo u name 3 pub l ic l imi ted companies op erating in Oban?

Tesco plc, Boots plc, W H Smith plc


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Public Limited Company (plc)

ADVANTAGES:

Public limited company

can raise more financethan private

PLC can borrow moremoney

Shareholders havelimited liability.

DISADVANTAGES:

PLC has no control over

who buys its sharesProfits shared between

many more people

Expensive to set up

Accounts must bepublished annually.


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Limited and Unlimited Liability

Unlimited liabilitySole trader or unlimited

partners have fullresponsible for the debts ofthe business.

If the business does nothave enough money to pay itsdebts the owners or partnersmust pay the debts fromtheir own personal funds.

May result in the ownershaving to sell their ownpossessions to raise themoney.

Limited Liability In a Private or Public Limited

company the shareholdersliability is limited to theamount they have invested,

or agreed to invest in thecompany.The will not have to sell their

own possessions to pay thedebts of the business.


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FRANCHISE

What is a Franchise?A franchise is an agreementor licensebetween two

parties which gives a person or group of people therights to market a product or serviceusing the

trademark of another business.Examples of a Franchise are:

McDonaldsDomino Pizza

Body Shop

Can you name 3 franchises in Oban?

Subway, BSM, Interflora


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Franchise

There are 2 partiesto a franchise agreement:

Franchisorthe person owning the rights to the

product or service being offered

Franchiseeperson or group of people purchasing therights to sell the product or operate the service.
http://www.mcdonalds.com/home.html


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Features of a Franchise

The Franchisee pays to copy the business idea, image,name of an existing company

A MacDonalds burger in Fort William will be look andtaste exactly the same as one bought in Glasgow

The franchisee pays a licence and shares profits withthe franchisor

Franchisee is restricted on what they can charge forthe goods and what they can sell.
http://www.thebodyshop.co.uk/_en/_gb/index.aspx


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Advantages of a Franchise

Reduces the risk of business failureThe business has been tested and proven on the

marketAllows small businessman to compete with larger

business concernsEconomies of scaleSupport offered by franchisor advertising etcTrade under a recognised brand. Training provided by

franchisor

No previous experience requiredExclusive territorial rightsBack-up provided for administration and trouble

shooting.


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Disadvantages of a Franchise

Franchisee may suffer from bad serviceprovided by another of the franchisees in adifferent area

Highly specialised business and limited towhat the franchisor wants to do no room toexpand products

If the franchisee wishes to sell theirbusiness they must gain consent of franchisor

Franchisee may not like the interference.


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Public Ownership

FEATURES OF A PUBLICLY OWNED ORGANISATION

Main aim is to provide a service

Funded by taxpayers

Controlled by governmentProvideessential services for the whole population

Nonprofit making

Examples: BBC , National Health Service, EducationServicesCan yo u give an examp le of a Publ ic Ownership organisation in in Oban?

Local Government


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Public Ownership

ADVANTAGES:

Less competition

DISADVANTAGES

May not be as

profitable as privatesector businesses.


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What is the aim of a Charity?

Aim to care for those in need or help


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Main features of a Charity

Use donations from the public

Raise funds in other ways

Do not make a profit

Examples include Oxfam, RSPCA, andSave the Children


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Sizes of Business Organisations

Small businessesOften owned and run by one person

Or owned and run by a partnershipSell goods or services locally

Employ fewer than 50 people

Eg hairdressers, electricians, computer trainers


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Medium-sized BusinessesOwned and run by a group of people (eg

partnerships, shareholders or directors)Can sell goods and services locally and ornationally

Employ between 50 people and 250

Eg manufacturers clothes, National car hirecompanies, theatres, insurance companies


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Large BusinessesOwned by a large number of peopleeg shareholders and run by people

appointed by them - directorsProduce and sell goods and servicesin several locations often in severallocations

Employ more 250 people sometimeshundreds of thousands

Eg Car manufacturers Ford; retail food outlets- Marks & Spencer; Banks; Oil companies


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Local Business

Features of Local business organisations

Small to medium sizedServices local marketsEmploys small number of peopleHas only a few outlets

For example

Mathesons FurnitureMacQueen BrosAlba


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National Businesses

Features of National Business organisations

Have household namesEasily recognised eg logosEmploy large workforceHave branches/factories in major towns and cities

For exampleBoots The ChemistRiver IslandThorntons
http://www.boots.com/


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Multi-National businesses

Features of Multi-national businesses

sell goods or provide services worldwideoperate in more than one country
http://www.ford.co.uk/http://www.shell.co.uk/


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The Economy can be divided into 3 Sectors:

Voluntary Public

Private

Economy


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SECTORS OF THE ECONOMY

Private

ownedbysole traders, partnerships, limitedcompanies and public limited companies

financed byprivate monies from shareholders andbanks

aims

To maximise profits To turn innovative ideas into successful businesses To expand the business


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Public owned by the state

financed by the state, eg through council tax, incometax

aimso To provide the same quality service to everyone in a

countryo To make good use of taxpayers money and provide

the services that an area needs


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Voluntary

ownedbythose taking part in the activities

financed bydonations, gifts and fund raisingactivities

aimsTo provide support for worthy causes

To provide the best service and facilitiesfor the members of welfare, social andsports organisations.


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SECTORS OF INDUSTRY

Tertiary Secondary

Primary

Sectors of

Industry


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SECTORS OF INDUSTRY

PRIMARY SECTOR agriculture, fishing, mining

This involves the extractionof raw materials

Oil Production

FishingForestry


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SECTORS OF INDUSTRY

SECONDARY SECTOR manufacturing

This involves the manufacture of goods

Car manufacturing

EngineeringShipbuilding


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SECTORS OF INDUSTRY

TERTIARY SECTOR

service

This involves the provisionof services

InsuranceHairdressingLeisurePublic Transport

EducationFire Service


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PRODUCTION AND CONSUMPTION

Production is the process of making goodsso that theycan either be consumed, or further processedbeforebeing consumed eg before a jumper can be knittedthefarmer must produce the wool, the sheep is

sheared, the wool is then washed spun, dyed,packaged and knitted into the final garment.

Consumption is when the customer purchases the goods

or services produced by the business.


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PRODUCT-LED AND MARKET-LED

PRODUCTION

Products and services can be supplied to the market for

a variety of reasons:

Product-led a business makes/produces goods and

provides services, basically because they are good at it.

Market-led- a business makes/produces goods andprovides services to meet identified consumers needs.


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THE PRODUCTION PROCESS/CHAIN

The production process will follow several stages and

involves the transformation of raw materials into

finished articles:

INPUT

raw materials

PROCESS

Manufacturing

stages

OUTPUT

Finished goods

SOLD TO

CUSTOMERS


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Example of the production chainThe produ ct ion of a cake for tea:

The farmer produceswheat

The miller produces flour

The baker makes thecakes and adds the cream

The retailer sells the

cakes to Ms MacIver

Ms MacIvers son eats thecakes


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Another example of the production chain

Farmers rear sheep to obtainwool

Sheep sheared wool - basic

raw material producedWool delivered to spinning

factory

Wool is washed, spun, dyedand packaged

Wool delivered to textilecompany

Skilled workers usemachinery to knit the

jumper

Manufacturers package thefinal product

Delivered to the retailers world wide

Retailer sells the jumper to

the customer.


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Factors of production

Resources required to produce goods and services can

be divided into 4 main groups knows as the Factors of

Production.

LAND site of factory/premises

LABOUR people employed to produce the goods

CAPITAL money required to purchase

ENTERPRISE idea provided by the owner


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LAND

Farmland crops,animals

Buildings land needed forhousing, businesses

Water

Coal-mining to provide heatoil/gas-refineries


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LABOUR

Labour is physical and mental effort.

People who use mental effort include:

Teachers

BankersPeople who use physical effort include:

Assembly workers, eg a car production line

A baker mixing of ingredients to make

bread and cakes


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CAPITAL

Capital is the money

and the things thatcan be purchased withmoney to make and

sell goods andservices.


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ENTERPRISE

Enterprisemeanshaving an idea for

a new business

and taking riskswith the other

factors of

production to make

the business a

success


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CREATING WEALTH

Creating wealth occurs at each stage of the

production process.

Value is added by each producer eg

miller adds to the value of the wheat by

processing itBaker adds to the value of the processed

wheat by making it into cakes

The total value of the cake is much more than

the value of the raw materials used in itsproduction

Therefore each stage creates more total wealththan the previous stage


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Wool prices are about 50pence per kilogram and formost farmers the value of

the wool does not cover thecost of shearing.

Finished product - 55!


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Topics Covered

Goods and servicesTangible and intangible

Durable and non-durable

Consumer and capital

Needs and WantsTypes of organisation

Sole Trader

Partnership

Shares

Private Ltd Co

Public Ltd Co

Limited/Unlimited Liability

Franchise Public ownership

Charities

Size of Organisations

Sectors of the EconomySectors of Industry

Production and Consumption

The Production Chain

Factors of Production

Creating Wealth

1-1 what do businesses do

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