Nature of a Business

Business Studies PART 1 A) Social Function of a business: [Choice] Businesses provides goods and services to satisfy individual needs and wants by giving the choice of selecting something among a variety of products. Economic Function of a business: [Employment] By creating or providing employment for individuals this minimises the unemployment rate. B) Unincorporated enterprises is when the enterprise has NOT gone through the process of not separating the owner from its legal entity examples; sole traders and partnershipsIncorporated enterprises are when the business HAS gone through the legal process of separating the owner from its legal entity examples; private and public companies. PART 2 A) Stakeholders: People who are or may be affected by business activities. B) Possible stakeholders; [Employees] loss of jobs therefore they are unemployed and won’t have a source of income. [Competitors] more firms may purchase their product as the operations are closing down C) Stakeho lders responsibilities; Society/General public] Stakeholders in business should have ethically responsible decisions as good corporate citizens. Society expects businesses to give back to the community of what they make out of profits. For example the Body shop organises community projects such as charity. How Lelouch and his minions was ethically responsible by being a good corporate citizen by giving back to the community of the profits by destroying Britannia as charity. PART3 [Environment] They must consider the impacts on the environment as we should care and preserve our environment.Thus businesses are turning to ecologically sustainable operating practices in response to climate change and destruction of our natural environment. For example Levis has developed its own environment philosophy and principles and conduct business with following those regulations Example Q&A A) What is the difference between a sole trader and partnership A sole trader is owned and operated by one person taking care of all responsibilities whereas a partnership consists of 2-20 people to form a business together and share the responsibilities and problems in the business.B) 2 Advantages and 2 disadvantages operating a partnership as opposed a sole trader [POOL CONTINUITY] It’s advantageous to be in a partnership compared to a sole trader as partnerships will be able to pool their funds and skills together to establish a business and on a death of one partner, the business can continue with the other partners [DISPUTES DEBTS] It’s disadvantageous to be in a partnership as there could be possible disputes between partners and may have a liability for all the debts including the partners.PART4 A) Consumers- Because there are many competitors in the industry it may be difficult for new business to have consumers buy the products they offer as there are a different range of products available to them at competitive prices and quality. Consumers [CPR CPQ] Finance- Thu s financing the business can also be a challenge like a domino effect one thing effects another as they aren’t making enough profits to keep the business up and running and may not be able to keep employees. Finance [DP BE]B) External Influences [CSI] [SCA] [BEBQ] can include competitive situation influences [CSI] as this allows their business to aim for a sustainable competitive advantage [SCA] over their competition as this is a strategy to ensure that they ‘beat’ their competitors over a long period of time, by stimulating an efficient production of better quality products or services. C) Internal influences [LCV] can include location as a prime location can lead to higher levels of sales and profits because of its convenience and visibility to the public. However a bad location is a liability that negatively affects sales and profits.