2.1.1 Business Ownership

1. Case Studies 2.1.1-2.1.5Use this to self assess and prepare actual businesses for questions which ask:“For a business you have studied”

2. Private Limited Company (Ltd) Owned by shareholders – friends and family. Usually has Ltd after the name but not always) Partnership (2-20 partners – owners) Sole Trader (1 owner) 2.1.1 Business Ownership Public Limited Company (PLC) Owned by shareholders – who bought shares on the stock exchange. Usually has PLC after the name but not always) Charity/ Not- For-Profit Organisations Franchises

3. Additional Notes 2.1.1 Business type – forms of ownership There are several different forms of business ownership You will need to be able to: • Identify different forms of ownership – sole trader, partnership, private limited company, public limited company, franchise, voluntary/charitable/not for profit • Evaluate the advantages and disadvantages of each form of ownership My Revision Notes

4. New Regulation Technological Advancement 2.1.2 Changes to the External Environment The year is 2007 and the UK Government has decided to ban smoking inside public areas including Pubs. The number of people attending pubs drops sharply The year is 1997 and Netflix is established as an online streaming service. By 2013 it has 33million subscribers. Blockbuster did not offer this technological service. Look what happened Change in Economic Conditions New Competitor The year is 2007. Nokia dominate the mobile phone market. Apple release their new Smart Phone: the i-Phone. The rest is history. It is 2007 and the UK Economy is suffering along with the rest of the World.

5. Additional Notes 2.1.2 Business activity – why and how businesses start, succeed and/or Fail Businesses usually carry out a range of activities and are usually involved with producing goods, providing services or both. You will need to be able to: • Identify possible reasons why a business starts – e.g. To meet the needs of a particular target market, in response to an innovative idea • Identify types of activity a business may become involved in – e.g. manufacturing of goods (consumer and capital goods), retailing, provision of services (leisure, financial, communication) • Explain possible changes in the external environment that can impact on these activities – e.g. economic factors such as the level of consumer spending on different goods and services, new competitors entering the market • Evaluate the consequences of these changes in the external environment to business activity – e.g. success, failure. My Revision Notes Examples of businesses who have had to adapt to changes in external environment

6. 2.1.3 Consequences of Functional Areas Not Operating Efficiently Marketing Function Administration Function IT Function Finance Function Key words to use: Human Resources Function Operations - Production Function

7. Additional Notes 2.1.3 Business organisation – how businesses organise themselves Businesses will group key tasks together into departments/functional areas within their overall business structure. This enables a business to operate more efficiently and allows a business to develop discrete job roles. You will need to be able to: • Understand the following functional areas: • Finance • Human resources • Marketing • Operations • Administration/ICT • Understand key operational tasks associated with each functional area • Evaluate the consequences for a business if the functional areas do not operate efficiently. You may be asked to give an example of a business you have studied. My Revision Notes Examples of what each Functional Area does in Cadbury’s (or a different business). Be specific to that business:

8. 2.1.4 Mission Statement, Aims and Objectives Stretford High School Mission Statement: “Learning Today, Leading Tomorrow” Core Values: Creativity, Independence, Drive, Respect Objectives set out how to achieve the Aim. Sometimes they are S.M.A.R.T Objective 1: To achieve 65% 5 A*- C grades including English and Maths in 2014 Aim: To provide an outstanding education service to all student Objective 2: To provide students with extra curricular opportunities to develop knowledge of subjects outside of the classroom Objective 3: Have weekly training sessions for teachers so that they can deliver Good and Outstanding lessons.

9. Tesco: Mission Statement, Aims and Objectives Mission Statement: “create value for customers to earn their lifetime loyalty” Core Values: Objectives set out how to achieve the Aim. Sometimes they are S.M.A.R.T Objective 1: To increase the number of customers from 35% of market share to 36% of market share by 2015 Aim: Market Share Growth Objective 2: To open 5 news stores in Northern Ireland by the end of 2014

10. Additional Notes 2.1.4 Framework for activity – aims, objectives and mission statements For businesses to be successful, they must achieve the objectives (targets) and overall aims (goals) they set themselves. These can be summed up in the form of a mission statement. You will need to be able to: • Identify the main aims of businesses – e.g. making a profit, survival, growth, expansion, being competitive, being environmentally friendly • Explain the importance of business aims – e.g. gives businesses a framework to operate within, focus for business activity • Identify business objectives – e.g. selling more of a product than a competitor, providing more services than in the previous year • Objectives = SMART Aims • Explain the importance of business objectives – e.g. stepping stones in achieving an overall goal, setting of realistic targets for various departments • Explain the importance of a mission statement – e.g. gives businesses something to aspire to, sets out a vision for a business. You may be asked to give an example of a business they have studied. My Revision Notes Examples of a specific Businesses’ Mission Statement, Aims and Objectives – you will need to remember these in case you are asked. Business: Aim: Objectives Mission Statement

11. 2.1.5 Stakeholder Conflict In 2012 Tesco wanted to build a new supermarket on Chester Road, Stretford Government Increase in employment during the build and once opened Tax generated from new jobs Less benefits paid for those no longer unemployed Employees Job opportunities for existing workers for promotions Owners Increase in market share Increase in sales Increase in profit ALL help achieve business aims Local Community It ruin the atmosphere of the town It will cause pollution and traffic Local businesses will lose customers BUT It will create new jobs The new store will provide more choice for local residents Shareholders It will generate more sales and generate more profit – increase in dividend (share of profits)

12. Additional Notes 2.1.5 Stakeholders – their differing interests All businesses have stakeholders who take an interest in the decision-making process. You will need to be able to: • identify different stakeholder groups in businesses – e.g. customers, suppliers, employees, employers, shareholders, local community • explain different interests of stakeholder groups – e.g. suppliers: they sell goods/services to the business; financiers: they lend money and they want interest and repayment assess possible conflicts between different types of stakeholder groups – e.g. employees wanting a pay rise higher than employer is offering • evaluate consequences to businesses of not listening to stakeholder groups - e.g. impact on reputation, drop in repeat business. You may be asked to give an example of a business you have studied which has a number of stakeholder groups. You may need to: • explain the interest of different stakeholder groups • assess a conflict that has occurred between two different stakeholder groups • evaluate the consequences to their chosen business of not listening to these stakeholder groups. My Revision Notes