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….. Thought for the day:

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 Knowledge & Understanding Anayslis Evaluation A Grade Application facts, terms, concepts and conventions appropriate to the syllabus; theories and techniques Apply facts, terms, concepts, theories and techniques to business problems and issues. Link to a business. Examine, Analyse, Interpret, Formulate, Cause and Affect, advantages & disadvantages. Evaluate, discuss, justify, advise, recommend. reasoned explanations, develop arguments, understand implications and draw inferences A04 A03 A02 A01

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

TargetLearning ObjectiveOutcome Who?Keywords  Understand business activity as a means of adding value and meeting customer need Classification of local and national firms into primary, secondary and tertiary sectors. Demonstrate understanding of: The purpose of business activity The concept of adding value The concept of needs & wants. Describe and classify business activity in terms of primary, secondary and tertiary sectors. ALL C  Add Value  Effective Demand  Factors of Production  Goods  Needs  Opportunity cost  Private sector  Profit  Public Sector  Resources  Services  Wants  Explain the purposes of business activity in terms of the objects of non- profit making activity, private enterprise and public enterprise. MOST B  Discuss key features of own national economy. Demonstrate an awareness of the changes that have taken place in these sectors within own country. SOME A 1.1 Business Activity

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 Produce a table that list your needs and wants and the reason.  Justify why your answer

Needs & Wants Activity 1.2 pg 11 Q. 3,4  Skill: A01 - knowledge & Understanding

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.

3 min: Draw One thing you need & one thing you want One Good & one Service Plenary

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?

TargetLearning ObjectiveOutcome Who?Keywords  Understand business activity as a means of adding value and meeting customer need Classification of local and national firms into primary, secondary and tertiary sectors. Demonstrate understanding of business activity in adding value and helping to satisfy the needs of customers in a changing competitive environment. Describe and classify business activity in terms of primary, secondary and tertiary sectors. ALL C  Add Value  Effective Demand  Factors of Production  Goods  Needs  Opportunity cost  Private sector  Profit  Public Sector  Resources  Services  Wants  Explain the purposes of business activity in terms of the objects of non- profit making activity, private enterprise and public enterprise. MOST B  Discuss key features of own national economy. Demonstrate an awareness of the changes that have taken place in these sectors within own country. SOME A 1.1 Business Activity

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

What is Business? What is the difference between a good and a service? What is the difference between Needs and Wants? RECAP

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. Demand & effective Demand

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 How might packaging a product add value? How might creating a ‘brand’ add value? Explain your answer.  Skill: A01 - knowledge & Understanding

Activity 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: studies/comments/teaching-added-value-introducing-the-worlds-first- zero-star-hotel  Skill: A01 - knowledge & Understanding

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?

TargetLearning ObjectiveOutcome Who?Keywords  Understand business activity as a means of adding value and meeting customer need Classification of local and national firms into primary, secondary and tertiary sectors. Demonstrate understanding of business activity in adding value and helping to satisfy the needs of customers in a changing competitive environment. Describe and classify business activity in terms of primary, secondary and tertiary sectors. ALL C  Add Value  Effective Demand  Factors of Production  Goods  Needs  Opportunity cost  Private sector  Profit  Public Sector  Resources  Services  Wants  Explain the purposes of business activity in terms of the objects of non- profit making activity, private enterprise and public enterprise. MOST B  Discuss key features of own national economy. Demonstrate an awareness of the changes that have taken place in these sectors within own country. SOME A 1.1 Business Activity

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.

TargetLearning ObjectiveOutcome Who?Keywords  Understand business activity as a means of adding value and meeting customer need Classification of local and national firms into primary, secondary and tertiary sectors. Demonstrate understanding of business activity in adding value and helping to satisfy the needs of customers in a changing competitive environment. Describe and classify business activity in terms of primary, secondary and tertiary sectors. ALL C  Add Value  Effective Demand  Factors of Production  Goods  Needs  Opportunity cost  Private sector  Profit  Public Sector  Resources  Services  Wants  Explain the purposes of business activity in terms of the objects of non- profit making activity, private enterprise and public enterprise. MOST B  Discuss key features of own national economy. Demonstrate an awareness of the changes that have taken place in these sectors within own country. SOME A 1.1 Business Activity

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

TargetLearning ObjectiveOutcome Who?Keywords  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. ALL C  Add Value  Effective Demand  Factors of Production  Goods  Needs  Opportunity cost  Private sector  Profit  Public Sector  Resources  Services  Wants  MOST B  Discuss key features of own national economy. Demonstrate an awareness of the changes that have taken place in these sectors within own country. SOME A 1.1 Business Activity

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

71 Business activity –Industrial Sectors

What can you tell me about the pictures below?

What can you tell me about the picture below?

75 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.

76 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

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?

85 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.

86 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

CountryPrimarySecondaryTeritiary United Kingdom21781 China Ghana Employment data 2010 (as a % of total employed population)

Guess which colours represent which sectors & then… Match the countries Key Yellow Green Red – Which sectors? Primary/ Secondary/Tertiary Countries: Uganda, Spain, Thailand

90 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.

92 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….

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 GoodsNeeds Opportunity cost Private sector Profit Public Sector Resources Services Wants

TargetLearning ObjectiveOutcome Who?Keywords  Understand business activity as a means of adding value and meeting customer need Classification of local and national firms into primary, secondary and tertiary sectors. Demonstrate understanding of business activity in adding value and helping to satisfy the needs of customers in a changing competitive environment. Describe and classify business activity in terms of primary, secondary and tertiary sectors. ALL C  Add Value  Effective Demand  Factors of Production  Goods  Needs  Opportunity cost  Private sector  Profit  Public Sector  Resources  Services  Wants  Explain the purposes of business activity in terms of the objects of non- profit making activity, private enterprise and public enterprise. MOST B  Discuss key features of own national economy. Demonstrate an awareness of the changes that have taken place in these sectors within own country. SOME A 1.1 Business Activity COMPLETE

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

TargetLearning ObjectiveOutcome Who?Keywords  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 C  Internal Growth  Merger  Organic growth  Takeover or acquisition  Why businesses grow and expand, problems connected to this and how they might be overcome Understand the different ways by which a business can grow Explain reasons why businesses seek to grow MOST B  Describe the problems connected with the growth of a business SOME A 1.1 Business Activity

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

TargetLearning ObjectiveOutcome Who?Keywords  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 C  Internal Growth  Merger  Organic growth  Takeover or acquisition  Why businesses grow and expand, problems connected to this and how they might be overcome Understand the different ways by which a business can grow Explain reasons why businesses seek to grow MOST B  Describe the problems connected with the growth of a business SOME A 1.1 Business Activity COMPLETE

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

TargetLearning ObjectiveOutcome 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 C 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 B  SOME A 1.1 Business Activity

Activity – Make a presentation – research project