BUSINESS MANAGEMENT. BrightRED Study Guide BUSINESS MANAGEMENT. William Reynolds. BrightRED Study Guides. Curriculum for Excellence

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1 BrightRED BrightRED Study Guides William Reynolds This BrightRED Study Guide is just the thing you need to takle your ourse and gain the exam skills essential to sueed at National 5 Business Management. Written by trusted author and experiened Business Management teaher William Reynolds, this book is paked with brilliant examples, tasks and advie. It is the ultimate ompanion to your studies: Contains all of the essential ourse information, arranged in easily digestible topis. Don t forget! pointers offer advie on key fats and on how to avoid ommon mistakes. Things to do and think about setions at the end of eah topi allow for further pratie and researh. Examples from real life businesses give ontext to a range of onepts and questions. A glossary of key terms helps you really learn and revise important ourse onepts. htred ur Let Brig ss in yo e u s u to and lead yo studies 5 l a n o i Nat! beyond REYNOLDS Designed in full olour, highly illustrated, aessible and engaging to make sure all that study stiks! BUSINESS MANAGEMENT BrightRED Study Guide Twie winner of the IPG Eduation Publisher of the Year award. BE BRIGHT BE READY Bright Red Publishing s easy to use, high-quality eduational resoures are trusted by teahers and ustom designed to improve students study experiene to help them to ahieve their potential. To see more of what we do and stay up to date with all things Bright Red: follow us on like us on faebook at Chek out the BrightRED Digital Zone for a world of tests, ativities, links and more at BUSINESS MANAGEMENT visit us at or all us on we d be delighted to hear from you! -Business Management-2017.indd 1 ISBN Don t forget to hek out the BrightRED Digital Zone 08/02/ :58

2 Contents List Contents List BrightrED StuDy guide: NatioNal 5 BuSiNESS MaNagEMENt Introduing National 5 Business Management... 4 understanding BuSiNESS Role of business in soiety Role of business in soiety Customer satisfation Types of business organisation Types of business organisation Types of business organisation Business objetives External and internal fators Stakeholders MaNagEMENt of PEoPlE and finane Reruitment and seletion Reruitment and seletion Reruitment and seletion Reruitment and seletion Training Training Retaining and motivating staff Retaining and motivating staff Employment legislation Soures of finane Soures of finane Cash budgeting Cash budgeting Break-even Break-even Profit statement MaNagEMENt of MarkEtiNg and operations Customers Market researh Market researh The marketing mix The marketing mix The marketing mix The marketing mix The marketing mix Suppliers Stok management Stok management Methods of prodution Quality Quality ase StuDiES Case studies 1 and Case studies 3, 4 and Case studies 6, 7 and Case studies 9, 10, 11 and Suggested answers/solutions to ase studies glossary

3 Understanding BUsiness role of BUsiness in soiety 1 Needs and wants are quite different things. TASK 1: Visit www. BusMgmt and find out if you know whih item is a need and whih item is a want. satisfation of human needs and wants A business is an organisation that involves people and resoures in the making of a good or the provision of a servie. All businesses have a name, a set of aims they want to ahieve, an image, resoures and rules. As onsumers, we buy the goods and servies provided by businesses to satisfy our needs and wants. To survive, we all have basi needs, inluding: food and water lothing shelter. One these needs have been satisfied, people always look for and want more to make their lives more omfortable and enjoyable. For example, we don t need a new ipad to survive we just want it beause we ve seen it advertised, or a friend has one. ProdUtion of goods, Provision of servies Businesses exist to satisfy these needs and wants. Some businesses produe goods suh as food produts, shoes, lothes and eletrial goods. Other businesses exist to provide servies suh as transport, hairdressing, banking, fast-food takeaway and holidays. Goods are tangible, whih means that they an be seen and physially touhed. Servies are intangible, whih means that they annot be seen or physially touhed. Goods and servies an also be durable (long-lasting) or non-durable (used up quikly). A TV is an example of a durable good it should last for at least a few years. A inema is an example of a non-durable servie it provides entertainment in the form of a film for about two to three hours on average. After that, the servie is no longer available. Goods Servies the BUsiness yle Understanding Business Role of business in soiety 1 The proess of buying and selling goods and servies is an ongoing one. This is the reason why developing a business is a long-term proess, and why many shops, suh as Marks and Spener, Next and New Look, have been on the High Street for a very long time. This diagram illustrates the proess of buying and selling goods and servies. It s alled the business yle. The business yle Customers have money to spend from their wages and want other goods and servies. (4) Step 1 Step 2 Step 3 Step 4 Step 5 Entrepreneurs set up in business selling goods and servies that onsumers need and want. Consumers use their inome and go out to the shops and buy goods and servies to satisfy their needs and wants. The businesses supplying the goods and servies begin to earn profit and this means they an pay employees better wages. The owners also beome wealthy. Consumers now have even more inome to spend (from their wages) and so want even more goods and servies. Businesses are now required to expand and produe more goods and servies for onsumers and so the proess goes on. fators of ProdUtion To make a produt or provide a servie, you need a number of ingredients or resoures land, labour, apital and enterprise. These are also referred to as fators of prodution. Fators of prodution LAND Land means the natural resoures that businesses use for example, a plot of land, oal, forests, water, fields and rivers. CAPITAL Capital means the tools, mahinery and equipment that a business owns for example, trators, lorries, motor vehiles, buildings, fatories, tools and equipment. Businesses produe goods and servies to meet ustomers wants. (1) Wealth is reated for businesses and for their employees and owners. (3) Customers buy goods and servies to satisfy their wants. (2) LABOUR Labour means the workfore of a business for example, joiners, shop assistants, teahers, lerial staff, eletriians and leaners. ENTERPRISE Enterprise means the business ideas that entrepreneurs or owners have about how to use land, labour or apital to make a profit for example, Rihard Branson and Virgin. Head to www. BusMgmt and hek out the Fators of prodution video for more on this. How well have you learned this topi? Take the Role of business in soiety test at www. BusMgmt Goods are tangible while servies are non-tangible. Goods and servies an be durable and non-durable. TASK 2: Visit www. BusMgmt and test your knowledge on goods and servies, and whether they are durable or non-durable. Cars Washing mahines CD players Sweets Clothes Seafood Shoes Furniture Hairdressing Car serviing Insurane Banking Entertainment (for example, inema and theatre) Eduation Publi transport If you were to make a list of the resoures (ingredients) that you need to build a house, your list might inlude: wood briks paint joiners eletriians ement mixers ladders plasti glass slates building ompany nails plot of land drill brik layers. Complete the table below by plaing eah resoure under the appropriate heading. Land Labour Capital Enterprise Books 6 7

4 Management of Marketing and Operations Market researh 1 ManageMent of Marketing and operations Market research 1 What is Market research? Market researh involves the onstant gathering, reording and analysing of data about an organisation s produt/servies and its target market. If a business doesn t meet the demands, needs and wants of its ustomers, it will probably fail. field researh Here, researhers go out into the field to obtain first-hand, primary information for the organisation to use. This way of gathering new, up-to-date information an be very time-onsuming and expensive to arry out. Market researh an help a business answer the following questions: How large is the market? How fast is the market growing? Are there any existing ompetitors and what share of the market do they hold? What makes onsumers buy ertain produts? What pries are onsumers prepared to pay for ertain produts? Are there any gaps in the market for the introdution of new produts? Methods of Market research There are two basi types of market researh desk researh and field researh desk researh Desk researh involves looking at information that has already been gathered and analysed, for example from websites, newspapers, trade magazines and books. Here, researhers use seondary information in the form of published soures for example, the internet; government department reports; market researh reports published by ompanies suh as Keynote; ompetitors websites; voters roles and trade magazines. This information has been gathered for one purpose and is then used for another. advantages of desk research The information is usually easy to obtain beause someone or some organisation has already undertaken the researh. Beause the researh has already been undertaken, it is muh heaper than undertaking field researh and so the organisation ould save a lot of money. The organisation an reat to market hanges really quikly beause the information is readily available. disadvantages of desk research The information is not as reliable as information obtained from field researh due to the fat that the information was probably olleted for another purpose, or for use by another organisation The information ould be out of date if it was olleted some time ago, and so it might not be relevant to today s market. If the information is inaurate or biased, then it ould lead to wrong deisions being made. TASK 37: Visit www. BusMgmt and omplete the table. How well have you learned this topi? Take the Market researh test at www. BusMgmt Visit one of the following websites: Just-auto ( Just-drinks ( Just-food ( Just-style (fashion) ( All four pull together news and market researh in their partiular setor. The market researh omes from a wide range of suppliers and an be purhased online. The news is free and RSS (Really Simple Syndiation) feeds of the news headlines are available

5 BrightRED BrightRED Study Guides William Reynolds This BrightRED Study Guide is just the thing you need to takle your ourse and gain the exam skills essential to sueed at National 5 Business Management. Written by trusted author and experiened Business Management teaher William Reynolds, this book is paked with brilliant examples, tasks and advie. It is the ultimate ompanion to your studies: Contains all of the essential ourse information, arranged in easily digestible topis. Don t forget! pointers offer advie on key fats and on how to avoid ommon mistakes. Things to do and think about setions at the end of eah topi allow for further pratie and researh. Examples from real life businesses give ontext to a range of onepts and questions. A glossary of key terms helps you really learn and revise important ourse onepts. htred ur Let Brig ss in yo e u s u to and lead yo studies 5 l a n o i Nat! beyond REYNOLDS Designed in full olour, highly illustrated, aessible and engaging to make sure all that study stiks! BUSINESS MANAGEMENT BrightRED Study Guide Twie winner of the IPG Eduation Publisher of the Year award. BE BRIGHT BE READY Bright Red Publishing s easy to use, high-quality eduational resoures are trusted by teahers and ustom designed to improve students study experiene to help them to ahieve their potential. To see more of what we do and stay up to date with all things Bright Red: follow us on like us on faebook at Chek out the BrightRED Digital Zone for a world of tests, ativities, links and more at BUSINESS MANAGEMENT visit us at or all us on we d be delighted to hear from you! -Business Management-2017.indd 1 ISBN Don t forget to hek out the BrightRED Digital Zone 08/02/ :58