Lecture on Business Fundamentals

Goods and Services

• Goods: Tangible items
• Services: Intangible offerings
• Needs vs Wants:
  • Needs: Essential items like shelter, food, water
  • Wants: Non-essential items beyond basic needs

Factors of Production

• Land
• Labor
• Capital
• Enterprise: Entrepreneurs organizing the other three factors

Opportunity Cost

• Definition: What you sacrifice when making a decision

Business Sectors

• Primary: Raw materials
• Secondary: Manufacturing and construction
• Tertiary: Services (e.g., hairdressing)

Characteristics of Entrepreneurs

• Hardworking
• Innovative
• Organized
• Willing to take risks

Objectives of Entrepreneurs

• Desire to be own boss
• Flexible working hours
• Pursue an interest
• Earn more money
• Identify a market gap
• Dissatisfaction with current job

Dynamic Change

• Constant change outside business control
• Examples:
  • Technology
  • Environmental or ethical changes
  • Law and legislation changes
  • Economic shifts

Business Ownership Forms

• Sole Traders: Unlimited liability
• Partnerships: Unlimited liability
• Private Limited Companies (Ltd): Limited liability
• Public Limited Companies (PLC): Limited liability
  • Advantage: Access to significant finance

Business Objectives

• Profit maximization
• Survival
• Growth (domestic and international)
• Market share
• Customer satisfaction
• Social and ethical objectives
• Shareholder value

Stakeholders

• Types: Owners, employees, customers, local community, suppliers
• Stakeholder objectives may conflict (e.g., shareholder dividends vs employee pay)

Business Location Factors

• Proximity to market
• Availability of raw materials
• Access to labor
• Cost considerations

Business Planning

• Types of costs:
  • Fixed Costs (do not change with output)
  • Variable Costs (vary with output)
• Importance of business plans: Raising finance, setting objectives, organizing departments
• Issues: Time and expense of creating plans

Expanding a Business

• Methods of growth:
  • Internal/Organic: Franchising, outsourcing, new stores, e-commerce
  • External/Inorganic: Takeovers, mergers
• Economies of Scale:
  • Purchasing: Bulk buying reduces costs
  • Technical: Using technology to improve efficiency
  • Risk of diseconomies if growing too fast

TELLY - Dynamic Nature of Business

• Technology: Digital communication, e-commerce
• Environmental/Ethical: Profits vs ethics trade-offs
• Legislation: Employment, health and safety, consumer laws
• Economic: Interest rate impacts on finance

Globalization

• World interconnection, importance of exchange rates
• SPICED: Strong Pound Imports Cheap, Exports Dear

Competitive Environments

• Market vs Competition
• Risk and uncertainty management

Production Methods

• Job Production: Custom, expensive, time-consuming
• Flow Production: Standardized, efficient but inflexible

Lean Production

• Reducing waste, increasing efficiency
• Just-in-time vs Just-in-case: Stock management

Choice of Suppliers

• Quality, price, reliability (QPR)

Procurement and Logistics

• Efficient management reduces costs

Quality Management

• Total Quality Management (TQM): Continuous improvement
• Importance of maintaining quality

Customer Service

• Importance of good customer service for loyalty and profitability
• Evolution through ICT

Organizational Structures

• Span of control
• Chain of Command
• Delayering

Recruitment and Selection

• Internal vs External recruitment
• Stages: Job analysis, person specification, interviews
• Types of contracts: Full-time, part-time, job share

Motivating Employees

• Financial: Salary, profit sharing
• Non-financial: Management styles, responsibility

Training

• Types: Induction, on-the-job, off-the-job
• Benefits: Productivity, adaptability to change

This summary should provide a comprehensive overview of the key topics covered in the lecture.