Business activity This presentation covers all the main points for this Unit. Note for tutors: If you wish to print out these slides, with notes, it is recommended that, for greater clarity you select the ‘pure black and white’ option on the PowerPoint print dialogue box.

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. It is useful to provide specific examples for students. Many businesses only have one activity – a solicitor provides legal services, Staples sells office supplies, Blockbusters rents videos. Many, however, have more than one activity. A garage may both sell and repair cars, a computer firm may sell computers but also provide a maintenance facility (a service), a garden centre may sell plants but also do landscaping work. Barratts builds houses but also sells them – and so on.

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 Students should be encouraged to provide additional examples for each category. It is useful to explain that client services covers services ‘face-to-face’ with the client, whereas ‘other’ can include freight transport, pipelines, cargo handling, telecommunications services which is not ‘face-to-face’ (though arguably for every service there is a client, somewhere!) Client services, eg bank, hospital Other services, eg transport

Successful Businesses All businesses need to have: a good idea to base their business upon. Planning to ensure that it is successful. Suppliers to buy the products and services they need to operate their business. Distributors to transport the products to it's customers. Equipment and machinery in order to make the product or perform the service. Efficient and reliable staff to make the product or perform the service. Market research to find out if there is a demand for the product, how large the market might be and who the competitors are. Use an example of a local furniture maker who is dependant on it’s supplier to provide the wood, the distributors to transport the finished product to the furniture shop, the equipment to make the product, the staff to operate the equipment and the market research to know if they will sell. Who are the competitors for the Playstation? Games console market consists of young men with jobs and money in their pocket. What about for Nike Trainers?

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. This is a key point which students need to understand. As a useful practical example, in early 2002 Carphone Warehouse announced plans to shut those retail shops which were making less profit and concentrate more on providing mobile phone services. This was because of virtual saturation in the mobile phone market, whereas demand for services is seen to be on the increase. It would be useful to add examples from your own region.

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 Again students should be encouraged to provide additional examples in each case – and to suggest products/services for which demand may increase/decrease. The next step is to realise how this affects business activities. For example, DVD will affect sales of video players and video tapes and hire of same. However, if technology continues and customers can download films online in future, this will seriously affect DVD/video hire shops – and presumably sales of DVD players/disks. Under income and wealth you may wish to raise the concept of ‘disposable income’ (rather than amount of earnings).

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. Changes in customer spending relates to previous chapter – as does technological developments. At this point students should understand that technology can increase employment in certain areas (eg ISPs/computer sales/computer services) but reduce it in other areas through automation – banks being the obvious example. Value of goods and services is always relative – and links to customer perceptions of value for money (British car prices versus European car prices is a useful example). All these factors impact upon the number of people employed in different activities.

Sector trends 1 Primary sector (producing raw goods) Overall, output increasing but employment falling. Secondary (Manufacturing) sector Overall, employment falling Traditional industries declining Telecommunications affected by world economic problems Some growth areas: computers and supplies, paper, pharmaceuticals, furniture, sports goods, many food products. This slide introduces the concept of sectors. It is supported by tables in the Student Handbook which identify key trends in each area. It would be useful to highlight those trends which have particularly affected activities in your own region.

Sector trends 2 Tertiary Sector (services) Sale of goods (retail and wholesale) Overall output and employment rising. Services (client and other) Overall output rising, especially in business services. Employment rising in many areas (eg health care) but falling in some areas because of increased automation (eg banks). Again, this slide is supported by relevant tables in the Student Handbook. Both sale of goods and services as a whole are the fastest growing sectors. Identification of the range of services which are available locally can be helpful.

Tasks Load your revision notes presentation and add a slide about the different sectors: primary Secondary Tertiary (services) Use the Applied Business book (bottom shelf of book trolley), page 38-39 to help. Return to slide 3 (page 37 in book), where the five different activities of businesses are listed. Find the website of an business for each of the five activities. Create a slide that explains what each business does for it’s core activity and add hyperlinks to your slide. Add notes about Identifying Trends (page 40)