BUSINESS

STUDIES
0450
 Unit 1:
Understanding Business Activity

• Chapter 1: Biz Activity

• Chapter 2: Classification of Biz
• Chapter 3: Enterprise, Biz Growth & Size
• Chapter 4: Types of Biz Organization
• Chapter 5: Biz Objectives & Stakeholders Objectives
 UNIT 1:
UNDERSTANDING BUSINESS
ACTIVITY

Chapter 1: Business Activity

 LEARNING OBJECTIVES:
By the end of the lesson, students will be able to:

1. Explain the concepts of needs, wants, scarcity and opportunity cost,

2. List out the four factors of production.
3. State the difference between specialization and division of labor.
4. Justify the advantages and disadvantages of specialization and division of labor.
5. Explain the concept of added value
 1.3 1.1
Needs, Wants, Scarcity &
Purpose of Biz
Activity
BUSINESS Opportunity Costs
ACTIVITY
(the process of producing
goods/services to satisfy
consumer’s demand)

1.4
1.2
Added Value & How a Biz
Importance of Specialization to
Adds Value
Biz & Consumers
1.1: Needs, Wants, Scarcity & Opportunity Costs:

A good/services that is A good/services which NOT ENUF The benefits that could
ESSENTIAL for living people WOULD LIKE good/services to meet have been gained from
需求 TO HAVE but IS NOT the demand/wants of the an alternative use of the
Eg: food, clothes…… ESSENTIAL for living population same resources
想要 缺乏 机会成本
Eg: branded
clothes…….

 Unlimited wants but there are limited resources to produce them scarcity
 Since the resources are limited give something up opportunity costs
1.2: Importance of Specialization to Business & Consumers:
Difference between CUSTOMER &
When people & biz CONSUMERS:
FOCUS ON WHAT • customer buys products from businesses 顾客
THEY ARE BEST AT. • consumer uses the business products 消费者
专业化

SPECIALIZATION Efficiency low costs

Competition
Advantages:
Specialization is NOW COMMON in most
• Increase efficiency 效率
organizations
• Decrease time spend from one workbench
Focus shift to:
to another
DIVISION OF LABOUR
Disadvantages:
(production is divided into separate tasks & each
• Boredom ---- efficiency decreases
worker does just one of those tasks)
• If 1 worker absent ---- production STOPS
--- efficiency decreases
 1.3: Purpose of Business Activity:
 Using Factors of Production to produce goods/services to satisfy people
needs & wants
 Biz produces 3 different types of goods/services:
 CONSUMER GOODS
• Products purchased for PERSONAL CONSUMPTIONS
• 4 major types (convenience products, shopping products,
specialty products & unsought products)

 CONSUMER SERVICES
• Non-tangible products purchased for PERSONAL
CONSUMPTION
(eg: transport, insurance)

 CAPITAL GOODS/BUSINESS PRODUCTS

• Products purchased/used for other biz functions
• Eg: machines, computers, delivery vehicles
  Biz produces 3 different types of goods/services:
 CONSUMER GOODS (Tangible 有形 )
• Products purchased for PERSONAL CONSUMPTIONS
• 4 major types (convenience products, shopping products, specialty products &
unsought products)

Convenience Specialty Products

Products 日用品 特色产品

Shopping Products Unsought Products

购物产品 待售产品
  Biz produces 3 different types of goods/services:
 CONSUMER SERVICES (Intangible 无形的 )
• Non-tangible products purchased for PERSONAL CONSUMPTION
(eg: transport, insurance)

Pure Services Owned-good Services

• Activities performed that • Activities that alter,
DO NOT include tangible improve/repair products
products Eg: dry-cleaning, repair shop……

Non-good Services Rented good Services

• Personal/professional services for • Provide a product to use for
a fee a brief period for a fee
eg: tax preparation, cleaning Eg: car rental…….
services, audit….
1.4: Added Value & How a Business Adds Value?

Added Value 附加价值 : how much more a biz sells a product for than the total
costs of materials?

Added Value = selling price – total costs

How a Business Adds Value?
 Branding
 Superior/ Excellent Service Quality
 Product/Service Features
 Convenience
THE END ^^