The Public and private sectors
Public secctor
• owened by the goverment
Funded by the • They provide collective goods and services to the
TAXES that the country.
goverment • goverment schools,hospitals
collectfrom • Homeaffairs
people • Municipality
• police
Formal Private sector Informal
• Follow laws of contry • informal buisness have potential to grow into a formal
• contrubuit directly to the gdp buisness.
• fixed location • indirectly controbutes to the gdp by buying from formal
• pay tax sector.
• no fixed location
• doesnt pay tax
• fights unemloyment
• There aim is to satisfy the customers needs and wants and generate a profit.
• Started by entropeneurs
• Need capital to fund the buisness
owned/borrowed
• lots of competiton (must create customer loyalty)
• good price
• good quality
• good service
Primary sector: Are harvesting the raw materials from the earth Eg:
farming, mining, fishing. People employed in this sector often have
low education as this is a physical labour sector.
Secondary sector: The raw materials from the primary sector are
turned into manufactured goods. Manufacturing and construction
business activities happen in this sector Eg: car manufacturing,
textile production, and engineering.
Tertiary sector: This is where goods and services are sold. Businesses
that operate in this sector may include retail businesses that sell
manufactured goods.
Quaternary sector: Mainly focuses on educational and intellectual
activities that focus on the future growth and development of the
country. Activities could include Eg: scientific research, education,
consulting, information management, and financial planning.
Quinary sector: This sector is known for being an extended version
of the quaternary sector and making tough decisions at the highest
level of the country. These decisions have a big impact of the
community and economic conditions of the country.
The concept of a Buisness
• A business is a process that adds value to an economic sector of a country.
• Businesses create employment which helps the people of the country by
improving their general standard of living.
• The processes performed by the businesses contribute towards providing goods
and services to generate a profit. Veg ·
Characteristics of a successful business
• They have strong leadership to lead the business to achieve their goals.
• They will focus on creating a competitive advantage for businesses that will bring
customers in and that will create customer loyalty.
• They will meet the needs and wants of the target market by providing the necessary
goods and services.
• They will use the resources such as the four factors of production: raw materials,
financial capital, human capital, and entrepreneurship effectively.
• The company operates as a responsible, accountable, and transparent corporate citizen,
creating value for all its stakeholders. Fancs
Important objectives of a buisness
Survival: They need to be aware of external threats and plan an objective for the future which will lead to their goal.
Profitability and Growth: They must generate a profit and they must control their resources and increase assets
which will lead to growth.
Productivity and efficiency: They must have the ability to achieve a maximum output and a minimum input and
satisfy their clients needs and wants and work at the best rate.
Employye devolpment: To help the business succeed, employees need to be motivated and committed. They should
understand the business and share their ideas with their manager. It is also important for them to use their time
effectively.
Competitive advantage:To maintain a competitive advantage you must have a better pricing, providing high-
quality (customer service and products) or advanced technology, or better location, or forming strategic alliances.
Technolgy: They should utilize advanced technology and be suitable for their consumers (online shopping), while
also being user friendly.
Soical responablity: They must have a good relationship with society and be a good corporate citizen, and they
must fulfill their CSR through charitable actions. Sppects
The buisness enviroment
Micro Enviroment.
Micro = S+W
• internal (full control in the buisness)
• PPPHAMFG
• resorces
• Buisness policy
• Culture
Market Enviroment nicciss
• Partial influence
• External (no control)
• NGO
• Industry regulators
• COmpetitors
• Consumers
• Intermediaries
• Market =O+T
• Suppliers
• Strategic alliances
Macro Enviroment
• External (no control)
• Political
• Economic
• Social
• Technological
• Legal
• Environmental
• Macro =O+T+PESTLE
Micro Enviroment
8 buisness functions PPPHAMFG
Purchasing: This is when they make sure they have all the necessary
resources to achieve the business's goal this means that they will buy goods
and services that are needed, by departments of the business which will be
bought by their suppliers.
To ensure the business has the necessary resources means that.
• It is the correct quality.
• It is bought at the right price.
• It is the correct quantity. Procuring another word for
purchasing
• It is delivered at the right place.
• It happens at the required time.
• It is bought from the right supplier.
Production:
• combines the factors of production in order to generate a product that
satisfies the target market and they must ensure they generate the right
profit.
• It is important to have a minimum input with the maximum output
within the business.
• The business will decide on the best approach to produce the products:
• mass production
• batch production
• jobbing
• The production function has to ensure that the product is safe reliable
durable and that the after-sales service is good.
Public relations: they ensure they create a strong brand image such as
doing CSR and they must make sure their businesses is contributing
towards the society and they must make sure they maintain a relationship
between the business and different stakeholders.
Human Resorecs: they need to determine how many workers they need and
what level of skills are required for the business. They need to ensure the
employees are trained and educated about the business. There are various
ways of direct impact on the human capital function such as.
Labour relations act
Basic conditions of employment act
Broad based black economic employment act
Skills development act
Administration: They are responsible for collecting all the data and they
must keep a record of the data and it needs to be available at any time in
case a decision needs to be made.
Marketing:
• They need to determine what products are in demand
• What price the consumers are prepared to pay
• Where is the best place for the product to be sold
• Best way to promote their product.
• They need to know what their target market's variables are such as their
age, gender hobbies and interests.
• They need to discuss the way to market their products such as the
packaging of the product.
• They need to give the correct pricing of the product.
• They must make sure that it is eye-catching.
Finance:
• The entrepreneur needs to decide how and where they are going to secure
their capital.
• Fixed capital: (long-term) will be used to buy fixed assets such as land
vehicles and equipment.
• Working capital: (short-term) will be used to pay creditors buy trading
inventory and pay the businesses expenses such as salaries, rent,
telephone water and electricity.
• To determine how much capital is needed to start up the business they
will need to calculate salaries rent machines role materials how long
will it take for them to make a profit.
• The business needs to set budgets to plan and monitor the financial
situation
General management:
• vision: A road map to the future(long term)
• mission: It shows who we are and what we do(short-term)
• Goals: The business's long and short-term objectives that they want to
accomplish.
• Delegating:When. a maneger reduces his work load and distrubes the
work to his staff and they educated and skilled in. that area.
Management tasks
• Planning the future and deciding how to deal with certain issues to
achieve success.
• Organising means management must combine the factors of
production to achieve the business's objectives.
• Leading employees means plans are implemented and employees are
assisted to understand what they must do to achieve.
• Control is when they are comparing the results with the standards that
were set during the planning. polc
Risk management: identify maintaining risks that could impact the
business minimize the risks. Make strategies to avoid it.
Management information systems:
• Ensures the correct tech technologies is used and available.
• Allows for information to be shared to stakeholders.
Business policy
•The business must keep the vision and the mission in Mind.
•The purpose of business policies is to guide the different functions and
create a structure for how all business activities should operate.
• Business policy originates from top management. It provides a structure
for middle and lower management to plan their functions and make daily
decisions.
• Everyone must understand what the business is aiming to achieve.
Business culture
•Business culture refers to the beliefs and values of the business
•these values and beliefs are the direct behavior of the internal stakeholders of
the business
•A positive business culture leads to good teamwork
Organisational structure
the structure within business refers to the way how the business is arranged
to achieve their goal
A clear structure helps internal stakeholders understand their roles in the
business and how information is communicated to them.
Market environment
Market environment consists of elements external to the business and
they have partial influrncr
Strategic alliance
Industry
regulators
Suppliers
Consumers Competitors
Intermediaries NGO
Suppliers
A business relies on suppliers for the materials and services it needs
so it can make the product and choose its target market.
The business must ensure that it got the products at
The right quality.
The right price.
The correct quantity.
The right place
The right time.
They must have a good relationship with their suppliers to avoid late
disruption and supply and they have power.
NB:
It is important to remember that the supplier has some power over
the business such as if the supplier demands a higher price it will
result in the business increasing their selling price.
If a supplier fails to deliver materials on time, the business might
not meet its goals, leading to loss of sales.
• Consumers are the people who buy or use the businesseses
products/services.
• A business must pay attention to consumer trends to meet its
customers' demands. When the needs of the target market change,
the business must adapt or improve its products to keep its
customer base.
• Consumers also have buying power. If they find a product too
expensive, they can stop buying it.
Competetiors are companies that offer the same or similar products
or services to the same target market.To maintain a competitive
advantage you must have a better pricing, providing high-quality
(customer service and products) or advanced technology, or better
location, or forming strategic alliances.
Strategic Alliances
This is where two or more businesses decide to
join forces to take advantage of each other's consumers.
Intermediaries are "middlemen" who connect businesses with their
consumers. Businesses use intermediaries to easily reach markets whe
these middlemen already have direct access to consumers.
NGO is a nonprofit organization that focuses on issues such as
uplifting or developing certain groups of society or protecting the
environment NGOs want businesses to operate ethically and take an
active role in social responsibility. They believe that being a good
corporate citizen is important. NGOs often campaign for sponsorships
from large companies.
Industry regulators guide businesses on how to act ethically. They
watch over the industry to ensure companies follow these standards.
Nicciss
Macro enviromrnt
Political - goverment design , war ( ukrain Isreal) relations with other
countries ( trade agreements in port export)
Economic- TAx vat inflation ( cost of living increases )interest rates.
Social- aids , load shedding,crime, unemployment Solution(csr)aids
community issues
Technological- competition has fancier tech
Cyber issues
Legal - increase in minimum wage, new OHSA
Regulations expensive to implement minimum use expenses
Environmental - global warming change way crops grows customers
produces a lot co2 bad for environment customers complaining. The
impact is custmers boycott
Test
Employye devolpment: To help the business succeed, employees need to be motivated and
committed. They should understand the business and share their ideas with their manager.
It is also important for them to use their time effectively.
Soical responablity: They must have a good relationship with society and be a good
corporate citizen, and they must fulfill their CSR through charitable actions.
Purchasing: they must buy all the necessary resources and buy goods and services needed
by the departments in the business.
To ensure the business has the necessary resources means that.
It is the correct quality.
It is bought at the right price.
It is the correct quantity.
It is delivered at the right place.
It happens at the required time.
It is bought from the right supplier.
Production: they must have a maximum output with a minimum input in order to
generate a profit .
·
labour relations act
basic conditions of employment act
broad based black economic act
skills development act
Vision: A road map to the future(long term)
mission: It shows who we are and what we do(short-term)
