igcse business studies 1.1.1 the purpose and nature of business activity

IGCSE Business Studies

1.1.1 The Purpose and Nature of Business Activity

Learning Outcomes

• To understand the production process in the provision of goods and services.• Explain why the management of resources is

important• Examine how to increase efficiency and the

benefits of this.• Knowledge of different types of inventories

(stock) and why businesses hold certain levels• Judgements on how businesses can improve

production through the implementation of lean production methods

Starter Challenge – 5 minutes

1. List all your NEEDS and arrive at a definition of what ‘NEEDS’ are

2. List all your WANTS and arrive at a definition of what ‘WANTS’ are

3. Write definitions on post its and pin on board

Reflect…

1. Which list took more time to complete?2. Why?

T.O.K.Is there someone or something responsible

for this?Is this sustainable?

Scarcity

• Also known as the economic problem

• Unlimited wants but limited resources

• What are resources?

The Four Factors of Production?(aka resources)

• CAPITAL - Money• ENTERPRISE – Entrepreneurship

• LAND – Raw Materials• LABOUR - Workers

Finite Resources = You Have to Choose!

WHICH CAR DO YOU BUY?WHY?

What factors did you consider before deciding?

•Is there a wrong choice?

•Read “Opportunity Cost and Your Life”

•What opportunity costs have you given up recently?

Plenary Task – 3 mins

• Consider scenarios that businesses might face when they have to make a choice

House points for the best 2

If you are not sure – where do you think you could look to get ideas?

Homework

• Find a recent business news article where a business has hade to make a choice. What was their opportunity cost?

• Bring the article in – the best ones will be awarded house points and be presented on the wall!

Specialisation

• Breaking down work into small tasks enabling employees to divide up labour and specialise in one task

ADVANTAGES DISADVANTAGES

? ?

Research Task – 5 mins

• Research one product and find out the different tasks it goes through during the production process

• Consider:> Why is it made this way? Here are some key terms

Time Costs Profit Employees

Customers Scarcity Quality Output

Feedback

What Is The Purpose of Business Activity?

If you don’t know where to start – could you change the wording to make it more meaningful for you?

Therefore…

• The purpose of business activity is to use resources (limited/finite) and make products or services that people want or need.

• But what blend of CELL do you need?

Added Value

• How can I add value to the following?

Added Value Formula

Selling priceOf finished

ProductTABLE

=$200

-Material

And costs=

$80

=

ADDED VALUE

Of ?

So…How could you Improve it?

You can Improve Added Value By:

• Sourcing cheaper raw materials• Reduce costs• Attractive displays• More product features• Better quality• Clever Sponsorship • Marketing and promotion• Improved service

Quiz time!

Boards at the ready

Quiz link