Transcript AIS-iGCSE-Business

Thought for the day:
There is only one boss. The
customer. And they can fire
everybody in the company from the
chairman on down, simply by
spending their money somewhere
else.
Sam Walton
(founder of Walmart)
discuss…..
iGCSE Business expectations
Complete all work to the best of your ability.
Bring your laptop (charged), the textbook, lined paper,
calculator and writing equipment to all lessons.
Complete all homework & tasks to the deadline.
Keep all hard copy of work organised in a file that can be
checked regularly by the teacher.
Organise all online work in a e-file on your laptop.
Ask for help when needed.
UNIT 1.1
LESSON 1
File headings
Refer to the contents page of your text book.
• For now, on your computer make a folder
called: iGCSE Business
• Make a subfolder called:
• Topic One_ Business and the Environment
Make a subfolder in ‘Topic One’ called:
• 1.1 Business Activity
Why study IGCSE Business Studies?
• Understanding different forms of business organisations, the
environments in which businesses operate and business
functions such as marketing, operations and finance;
• An appreciation of the critical role of people in business
success;
• Confidence to calculate and interpret business data;
• Communication skills including the need to support
arguments with reasons;
• Ability to analyse business situations and reach decisions or
judgements.
How you will be assessed:
Internal – School assessed
• You will complete a number of tasks through
the year which will go towards your school
assessed grade.
How to get an A
A
Grade
A04
Evaluation
A03
Anayslis
A02
Application
A01
Knowledge & Understanding
Evaluate, discuss, justify, advise,
recommend. reasoned explanations,
develop arguments, understand
implications and draw inferences
Examine, Analyse, Interpret,
Formulate, Cause and Affect,
advantages & disadvantages.
Apply facts, terms, concepts,
theories and techniques to
business problems and
issues. Link to a business.
facts, terms, concepts
and conventions
appropriate to the
syllabus; theories and
techniques
Don’t worry if seems confusing at the moment… it’s a lot to take in at
once…
Topic One:
Business and the environment in
which it operates
1.1: Business Activity
UNIT 1.1
LESSON 1
1.1 Business Activity
Target
Learning Objective
Outcome
Who?

Understand business
activity as a means of
adding value and meeting
customer need
Demonstrate understanding of:
• The purpose of business activity
• The concept of adding value
• The concept of needs & wants.
ALL
Classification of local and
national firms into
primary, secondary and
tertiary sectors.
Describe and classify business
activity in terms of primary,
secondary and tertiary sectors.

Keywords
Add Value
C
Effective Demand
Factors of Production
Goods
Needs
Explain the purposes of business
activity in terms of the objects of
non- profit making activity, private
enterprise and public enterprise.
MOST
Opportunity cost
Private sector
B
Profit
Public Sector

Discuss key features of
own national economy.
Demonstrate an awareness of the
changes that have taken place in
these sectors within own country.
Resources
SOME
A
Services
Wants
1.1.1: Introduction to business
Activity
NEEDS & WANTS
UNIT 1.1
LESSON 1
Aim of this section……
1.1 Business Activity
To understanding the concept of businesses
providing for needs & wants
Starter Activity
Be creative
Use key words
On a post-it
Define a
Business
In your own words
Stick on board
What is a Business?
A traditional definition:
‘A business is an entity which tries to combine
human, physical and financial resources into
processing goods or services to respond to and
satisfy customer needs’.
What is a Business?
A traditional definition:
‘A business is an entity which tries to combine
human, physical and financial resources into
processing goods or services to respond to and
satisfy customer needs’.
Goods and Services
Business produce goods and services.
• What is the difference? Which is which?
Goods and Services
Business produce goods and services.
• What is the difference?
• Goods: you can touch and use – clothes and
books
• Services: other people do for you, cutting hair,
selling goods in a shop.
Goods and Services
Products for consumers are called consumer
goods.
Products sold by one business to another are
called producer goods
(Some business serve both)
Needs & Wants
Don’t mean the same thing.
• Needs are items that we must have in order to
live.
• Wants are items that we would like to have,
although we won’t die without them.
Activity
Justify why your answer
Produce a table that list your
needs and wants and the
reason.
Needs & Wants
Skill: A01 - knowledge &
Understanding
Activity 1.2 pg 11
Q. 3,4
Needs & Wants
The act of preparing a good or service for sale is
called production.
Extension: What is a business?
List 3 different definitions of a
business using the Internet.
p
• Everyone has basic needs for food, shelter
and clothing in order to survey.
• On top of these we have additional wants
• Businesses produce goods & services to help
satisfy consumers wants and needs.
Plenary
•
•
•
•
3 min:
Draw
One thing you need & one thing you want
One Good & one Service
Plenary
Level achieved_____
What do you now know as a
result of today’s lesson?
What are your areas for improvement?
What are you going to do about this?
1.1 Business Activity
Target
Learning Objective
Outcome
Who?

Understand business
activity as a means of
adding value and meeting
customer need
Demonstrate understanding of
business activity in adding value
and helping to satisfy the needs of
customers in a changing
competitive environment.
ALL
Classification of local and
national firms into
primary, secondary and
tertiary sectors.

Add Value
C
Effective Demand
Factors of Production
Describe and classify business
activity in terms of primary,
secondary and tertiary sectors.
Explain the purposes of business
activity in terms of the objects of
non- profit making activity, private
enterprise and public enterprise.
Keywords
Goods
Needs
MOST
Opportunity cost
Private sector
B
Profit
Public Sector

Discuss key features of
own national economy.
Demonstrate an awareness of the
changes that have taken place in
these sectors within own country.
Resources
SOME
A
Services
Wants
1.1.1: Introduction to business
Activity
Purpose of Business Activity
UNIT 1.1
LESSON 1
Aim of this section……
• Understand the purpose of
business activity
RECAP
• What is Business?
• What is the difference between a good and a
service?
• What is the difference between Needs and
Wants?
Demand & Effective Demand
• When you want something you create a
demand for it.
• But how can you satisfy your demand?
Demand & effective Demand
• When you want something you create a
demand for it.
• But how can you satisfy your demand?
Have money….
…. Be willing to spend it!
Demand & effective Demand
Have money….
…. Be willing to spend it!
But that’s not all… other people have to have
the same demand… a business will not supply to
just one person.
This is ‘effective demand’…. If enough people
want something and are able and willing to pay
for it.
Satisfying needs and wants
• To survive, businesses must produce goods
and services that satisfy people’s needs and
wants.
• They also need to understand that these may
change over time.
• Also, other business will be attempting to do
the same.
• This shows business operate in a changing and
competitive environment.
Scarcity
• Business have to satisfy peoples’ needs &
wants.
• Needs – to survive
• Wants – are infinite.
• Most people want more than they already
have.
• Unfortunately resources are finite.
• This means a limited amount.
• Economists say that resources are scare.
Scarcity
•
•
•
•
•
We can not have everything.
We have to make choices
Businesses have to make choices too…
Should a farmer grow sugar canes or Coffee?
‘Opportunity Cost’.
1.1.1: Introduction to business
Activity
Adding Value
UNIT 1.1
LESSON 1
Of this section……
• To understand the business activity of adding
value
Adding Value
• How much would you pay for this?
Adding Value
• How much would you pay for this?
Adding Value
Business aim to provide products and services to
consumers that are more attractive than those
of their competitors.
…. Make it more desirable.
This is called
Adding Value
It is the difference between the cost of the raw
material and the price charged.
Adding Value
A restaurant may buy
three oranges for 10c
(30c).
A glass of fresh Oj is sold
for $1.
They value added 70c.
NOTE: Adding value is NOT the
same as profit!!!!
Activity
Skill: A01 - knowledge &
Understanding
How might packaging a
product add value?
How might creating a
‘brand’ add value?
Explain your answer.
Activity
Skill: A01 - knowledge &
Understanding
Points to consider:
Building a brand – a reputation for quality, value etc
that customers are prepared to pay for. Nike trainers
sell for much more than other shoes, even though the
production costs per pair are probably pretty similar!
The key benefits to a business of adding value
include:
• - Charging a higher price - Creating a point of
difference from the competition - Protecting from
competitors trying to steal customers by charging
lower prices
Play:
http://www.tutor2u.net/blog/index.php/business-
studies/comments/teaching-added-value-introducing-the-worlds-firstzero-star-hotel
p
• Business add value, to make products more
desirable and suitable for customers
• Added value is NOT the same as profit.
1. What did I learn this
lesson that I didn’t
know before?
2. Which part of the
lesson did I most
enjoy?
3. Which part of the
lesson could I use the
most help with?
4. Which part of my
achievements am I
most proud of this
lesson?
1.1 Business Activity
Target
Learning Objective
Outcome
Who?

Understand business
activity as a means of
adding value and meeting
customer need
Demonstrate understanding of
business activity in adding value
and helping to satisfy the needs of
customers in a changing
competitive environment.
ALL
Classification of local and
national firms into
primary, secondary and
tertiary sectors.

Add Value
C
Effective Demand
Factors of Production
Describe and classify business
activity in terms of primary,
secondary and tertiary sectors.
Explain the purposes of business
activity in terms of the objects of
non- profit making activity, private
enterprise and public enterprise.
Keywords
Goods
Needs
MOST
Opportunity cost
Private sector
B
Profit
Public Sector

Discuss key features of
own national economy.
Demonstrate an awareness of the
changes that have taken place in
these sectors within own country.
Resources
SOME
A
Services
Wants
Plenary
Level achieved_____
What do you now know as a
result of today’s lesson?
What are your areas for improvement?
What are you going to do about this?
1.1: Business Activity
Public, Private and non-for Profit
UNIT 1.1
LESSON 1
Aim of this section……
• Explain the purposes of business activity in
terms of the objects of non- profit making
activity, private enterprise and public
enterprise.
Private, public or not-for-profit
• A business is always owned by someone. This can
just be one person, or thousands.
• So a business can have a number of different types of
ownership depending on the aims and objectives of
the owners.
Private, public or not-for-profit
• Most businesses aim to make profit for their owners.
Profits may not be the major objective, but in order
to survive a business will need make a profit in the
long term.
• Some organisations however will be ‘not-for-profit’,
such as charities or government-run corporations.
Activity
• Business are set up to produce goods and
services.
• They are either run and owned by someone in
the private sector or the public sector.
• Research these and distinguish between
them.
Activity
Read the following statements, are they more likely to have
come from the private or public sector?
A. ‘Our goal is to make profit for our owners. We will achieve
this by providing excellent customer service.’
B. ‘Our goal is to provide an efficient postal service to every
single household in the country. This includes providing
deliveries every day to out-of-the-way locations.’
C. ‘Our goal has always been to make profit. If we provide
additional benefits to the wider community, that is a bonus.’
Reasons for public sector
organisations
• Provide essential services not fully provided
by private sector Prevent exploitation of
customers
• Focus on social needs
• Protect jobs and maintain key industries
RESEARCH
In Australia are the following services public or
privately owned?
• Post
• Phone links
• Railway links
• Schools
• Banking
• television
p
• All businesses aim to achieve the goals they
have set.
• Different types of business have different
goals.
1.1.1: Introduction to business
Activity
Factors of Production
UNIT 1.1
LESSON 1
Of this section……
General understanding how Business Activity
involves the use of resources - known as Factors
of Production
Factors of Production
Business Activity involves the use of resources
known as Factors of Production:
• Land
• Labour
• Capital
• Enterprise
Write a brief description describing each……
Sound Collage
1. Read your work
2. Pick a sentence, phrase or powerful word that best
summarises your point.
3. Underline it.
4. Close eyes
5. When you feel a tap on your shoulder read out the
phrase/word you have underlined.
Finale – feedback the
variety of messages you have heard.
1.1 Business Activity
Target
Learning Objective
Outcome
Who?

Understand business
activity as a means of
adding value and meeting
customer need
Demonstrate understanding of
business activity in adding value
and helping to satisfy the needs of
customers in a changing
competitive environment.
ALL
Classification of local and
national firms into
primary, secondary and
tertiary sectors.

Add Value
C
Effective Demand
Factors of Production
Describe and classify business
activity in terms of primary,
secondary and tertiary sectors.
Explain the purposes of business
activity in terms of the objects of
non- profit making activity, private
enterprise and public enterprise.
Keywords
Goods
Needs
MOST
Opportunity cost
Private sector
B
Profit
Public Sector

Discuss key features of
own national economy.
Demonstrate an awareness of the
changes that have taken place in
these sectors within own country.
Resources
SOME
A
Services
Wants
Plenary
Level achieved_____
What do you now know as a
result of today’s lesson?
What are your areas for improvement?
What are you going to do about this?
1.1.2: Classification of local and
national firms into primary,
secondary and tertiary sectors
UNIT 1.1
1.1 Business Activity
Target
Learning Objective

Classification of local and
national firms into
primary, secondary and
tertiary sectors.
Outcome
Who?
Keywords
ALL
Describe and classify business
activity in terms of primary,
secondary and tertiary sectors.
Add Value
C
Effective Demand
Factors of Production
Goods
Needs

MOST
Opportunity cost
Private sector
B
Profit
Public Sector

Discuss key features of
own national economy.
Demonstrate an awareness of the
changes that have taken place in
these sectors within own country.
Resources
SOME
A
Services
Wants
1.1.2: Classification of local and
national firms into primary,
secondary and tertiary sectors
Define
Of this section……
1.1.2: Classification of local and national firms
into primary, secondary and tertiary sectors
Describe and classify business activity in terms
of primary, secondary and tertiary sectors
• Understand the basis of the classification
• Use examples to demonstrate understanding
Business activity
–Industrial Sectors
71
What can you tell me about the
pictures below?
What can you tell me about the
pictures below?
What can you tell me about the
picture below?
What is ‘business activity’?
• The activities or operations carried out by
a business, eg making goods, selling
goods, providing a service.
• The main activity is the organisation’s
core business activity.
75
Main types of activity
Producing raw goods, eg farmer,
fisherman, forestry worker
Manufacturing of goods, eg food
producer, furniture manufacturer
Selling of goods, eg supermarket,
furniture store
Client services, eg bank, hospital
Other services, eg transport
76
1.1.2: Classification of local and
national firms into primary,
secondary and tertiary sectors
Changes
Aim of this section……
• To understand what is meant by Primary,
Secondary & Tertiary Sectors.
• Demonstrate an awareness of the changes that
have taken place in these sectors within own
country.
Primary
• Includes Businesses that produce/ extract Raw
Materials
• Using natural resources.
• eg: farming, oil mining, coal mining.
Secondary (Manufacturing)
• Making goods from raw materials.
• Manufacturing & construction.
• Makers of furniture, chocolate, computers,
mobile phones, cars manufacturers.
Tertiary sector – Providing a
service to customers
• Wholesalers and Retailers
• Also over services which provide directly to
the client– such as education, hairdressing,
healthcare.
What sector are these organisations in
and why?
Trends in business activities
• Firms are attracted towards profitable
activities and away from unprofitable
activities
• Activities are profitable if customer
demand for the product or service is
increasing.
85
Customer demand
Changes because of:
• Tastes and preferences, eg Coke v Pepsi
• Lifestyle changes, eg working mums
• Population changes, eg more old people
• Seasonal factors, eg Christmas
• Value for money, eg bargains and discounts
• Income and wealth, eg winning the lottery
• Technological developments, eg DVD v video
86
Country
Primary
Secondary
Teritiary
United Kingdom
2
17
81
China
40
28
32
Ghana
53
21
26
Employment data 2010
(as a % of total employed
population)
Guess which colours
represent which sectors
& then…
Match the countries
Countries: Uganda, Spain, Thailand
Key Yellow Green Red – Which sectors?
Primary/ Secondary/Tertiary
Examples of changes to
business activities
• Consumer spending rising/falling
• Technological developments
• Value of goods and services produced
All these affect the number of people
employed in different activities.
90
Investigating business activities
Task:
• Describe using local and Australian examples, the
three basic classifications of business activity
(primary, secondary and tertiary)
Explain areas of growth and decline in the primary,
secondary and tertiary classifications of business
activities.
XXXXXXXX Need to find the data for students….
92
Task
• Create a visual display describing the three
basic classifications of business activity
(primary, secondary and tertiary) & explaining
areas of growth and decline in the primary,
secondary and tertiary classifications of
business activities
TASK
• Produce a three-column display, with the
columns labelled “Primary”, “Secondary” and
“Tertiary”. At the top of each column, write a
clear explanation of what the sector means.
• Within each column, provide examples of
three business organisations in that sector.
• Explain the changes in these sectors within
Australia.
p
• It is helpful to classify business activity into
primary, secondary and tertiary sectors.
• There has been a global increase in the
tertiary sector.
Fly swatter
Teacher will read
out a definition…
Find the Key word
to the definition…
and Swat it!!
Find the Key word to the definition…
and Swat it!!
Add Value
Effective Demand
Factors of Production
Goods
Opportunity cost
Needs
Private sector
Profit
Public Sector
Resources
Services
1.1 Business Activity
Target
Learning Objective
Outcome
Who?

Understand business
activity as a means of
adding value and meeting
customer need
Demonstrate understanding of
business activity in adding value
and helping to satisfy the needs of
customers in a changing
competitive environment.
ALL
Classification of local and
national firms into
primary, secondary and
tertiary sectors.

Add Value
C
Effective Demand
Factors of Production
Describe and classify business
activity in terms of primary,
secondary and tertiary sectors.
Explain the purposes of business
activity in terms of the objects of
non- profit making activity, private
enterprise and public enterprise.
Keywords
Goods
Needs
MOST
Opportunity cost
Private sector
B
Profit
Public Sector

Discuss key features of
own national economy.
Demonstrate an awareness of the
changes that have taken place in
these sectors within own country.
COMPLETE
Resources
SOME
A
Services
Wants
Plenary
Level achieved_____
What do you now know as a
result of today’s lesson?
What are your areas for improvement?
What are you going to do about this?
1.1.3: Business growth and
measurement of size
UNIT 1.1
1.1 Business Activity
Target
Learning Objective
Outcome
Who?

Show knowledge of
the methods and
problems of
measuring the size of
business units
• Show understanding of the
different methods of
measuring the size of
business units, e.g. number
of employees, capital
employed
• Show awareness of the
problems of using the
different methods
ALL
Understand the different ways
by which a business can grow
Explain reasons why businesses
seek to grow
MOST
Describe the problems
connected with the growth of a
business
SOME


Why businesses grow
and expand, problems
connected to this and
how they might be
overcome
Keywords
Internal Growth
C
Merger
Organic growth
Takeover or
acquisition
B
A
Aim Of this section……
• Show an understanding of the different
methods of measuring size of business units
(e.g number of employees, capital employed)
• Understand why business grow and expand
and the problems to this.
Business Growth and Size
Small, Medium or Large?
Business Growth and Size
Small, Medium or Large?
Classifications vary in industry and country.
This is how the size is measured:
Problems with measuring size
• The number of people employed is a straight
forward method.
• But how do you compare business in different
industries….
• E.g a huge modern farm (using machinery)
may employee just a few people, a local
supermarket may employ a hundred or more?
EU & South African examples
SA: Small
Business
(varies
industry
to
industry)
Problems measuring size…
• A highly automated plant may employ only 45
people, but have a turn over of 50 million
euros…. Small or large?
• Turnover
• Number of employees
• Amount of capital
employed
• Market share
Business Growth
• Business may be able to gain advantages over
competitors by growing.
• Survival – costs
• Economies of scale
• Increase future profits (larger, sell more)
• Increase market share (prices)
• Reduce risk (diversification)
Business Growth
• Growing can be internal or external
Business Growth
Internal:
• ‘Organic’ growth
• Money to expand (profits/ investment from
owners)
Business Growth
External:
• Acquisitions, Take over, or mergers
• Sell shares
Problems with growth
•
•
•
•
Diseconomies of scale
Resistance from shareholders
Lack of expertise
Lack of funds
p
• There are many number of ways of
measuring the size of a business
• Business can grow ‘organically’ from within
or externally.
Starter Stars
Plan the starter for next
lesson…
recapping this lesson
1.1 Business Activity
Target
Learning Objective
Outcome
Who?

Show knowledge of
the methods and
problems of
measuring the size of
business units
• Show understanding of the
different methods of
measuring the size of
business units, e.g. number
of employees, capital
employed
• Show awareness of the
problems of using the
different methods
ALL
Understand the different ways
by which a business can grow
Explain reasons why businesses
seek to grow
MOST
Describe the problems
connected with the growth of a
business
SOME


Why businesses grow
and expand, problems
connected to this and
how they might be
overcome
COMPLETE
Keywords
Internal Growth
C
Merger
Organic growth
Takeover or
acquisition
B
A
Plenary
Level achieved_____
What do you now know as a
result of today’s lesson?
What are your areas for improvement?
What are you going to do about this?
1.1.4: Key features of own national economy
UNIT 1.1
1.1 Business Activity
Target
Learning Objective
Outcome
Who?
Keywords

Demonstrate an
awareness of the impact
that business activity may
have on the environment
Use examples to illustrate
concepts such as pollution
and global warming
Understand some of the
issues with regards to
‘sustainable development’
Show awareness of the
possible impact of business
development upon
depletion of natural
resources
ALL
Cost-benefit
analysis
Economic Growth
Environmentally
friendly
External costs
(externalities)
National Wealth
Social cost and
Benefits

Show understanding of
the changing importance
of these categories within
their own national
economy, in terms of
employment and
contribution to national
wealth
Show awareness of the
structure and importance of
different sectors in your own
national economy
Illustrate such changes with
reference to appropriate
examples
MOST
C
B
• Activity – Make a presentation – research
project