1.1.1
Why Businesses Exist & Sectors
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Why do Businesses Exist?
Businesses provide goods and services for the market.
Supplier of goods and services
- Businesses supply goods and services to consumers and businesses.
- Goods are tangible products which can be physically held.
- Services are intangible products.
Impact on the country and its residents
- Businesses provide employment which allows individuals to earn an income and purchase goods and services.
- E.g. In 2019, Tesco employed around 300,000 staff.
- Businesses create new goods and services which can enhance the lives of consumers.
- E.g. pharmaceutical businesses like Pfizer have developed new medicines that cure illnesses and improve people’s quality of life.
- Businesses can allow a country to improve and develop the country's reputation.
- E.g. many financial service businesses in the UK provide their products to many countries around the world and this improves the UK’s reputation.
The transformation process
- Businesses convert inputs (for example, raw materials) into outputs (finished goods) to satisfy the needs, and wants of other consumers and businesses.
- This is called the transformation process and businesses will add value to their goods and services throughout this process.
B2C
- Some businesses sell their goods and services directly to consumers and these businesses are known as business to consumer (or B2C) organisations.
- For example, Spotify provides music streaming services and sells these to consumers. Spotify is, therefore, an example of a business to consumer organisation.
B2B
- Other businesses sell their goods and services to other businesses and these are known as business to business (or B2B) organisations.
- For example, Hootsuite sells social media management services to other businesses such as Virgin. Hootsuite is, therefore, an example of a business to business organisation.
Sectors
- Businesses can also be categorised according to the type of product they supply:
- Primary sector businesses extract or grow raw materials including fishing, mining, and forestry.
- Secondary businesses manufacture goods using raw materials such as clothing and mobile phones.
- Tertiary businesses provide services such as hotels and cinemas.
1Business Organisation & Environment
1.1Introduction to Business Management
1.2Types of Organisation
1.3Organisational Objectives
1.4Stakeholders
1.5External Environment
1.6Growth & Evolution
1.7HL Only: Organisational Planning Tools
2Human Resource Management
2.1Functions & Evolution of Human Resource Management
2.2Organisational Structure
2.3Leadership & Management
2.4Motivation
2.5Organisational (Corporate) Culture
2.6HL Only: Industrial/Employee Relations
3Finance & Accounts
3.1Sources of Finance
3.2Costs & Revenues
3.3Break-Even Analysis
3.4Profitability & Liquidity Ratio Analysis
3.6HL Only: Investment Appraisal
3.7HL Only: Budgets
4Marketing
4.1The Role of Marketing
4.2Marketing Planning
4.3Market Research
4.4The 4 Ps
4.4.1Product Decisions4.4.2Pricing Decisions & Price Skimming4.4.3Pricing Decisions & Price Penetration4.4.4End of Topic Test - Pricing & Competition4.4.5Promotional Decisions4.4.6Promotional Decisions 24.4.7Promotional Decisions 34.4.8Digital Marketing4.4.9Evaluating Digital Marketing4.4.10Case Study - The Marketing Mix & Promotion4.4.11Place & Distribution
4.5HL Only: The Extended Marketing Mix
4.6HL Only: International Marketing
4.7E-Commerce
5Operations Management
5.1The Role of Operations Management
5.2Production Methods
5.3HL Only: Lean Prodution & Quality Management
5.4HL Only: Production Planning
5.5HL Only: Research & Development
Jump to other topics
1Business Organisation & Environment
1.1Introduction to Business Management
1.2Types of Organisation
1.3Organisational Objectives
1.4Stakeholders
1.5External Environment
1.6Growth & Evolution
1.7HL Only: Organisational Planning Tools
2Human Resource Management
2.1Functions & Evolution of Human Resource Management
2.2Organisational Structure
2.3Leadership & Management
2.4Motivation
2.5Organisational (Corporate) Culture
2.6HL Only: Industrial/Employee Relations
3Finance & Accounts
3.1Sources of Finance
3.2Costs & Revenues
3.3Break-Even Analysis
3.4Profitability & Liquidity Ratio Analysis
3.6HL Only: Investment Appraisal
3.7HL Only: Budgets
4Marketing
4.1The Role of Marketing
4.2Marketing Planning
4.3Market Research
4.4The 4 Ps
4.4.1Product Decisions4.4.2Pricing Decisions & Price Skimming4.4.3Pricing Decisions & Price Penetration4.4.4End of Topic Test - Pricing & Competition4.4.5Promotional Decisions4.4.6Promotional Decisions 24.4.7Promotional Decisions 34.4.8Digital Marketing4.4.9Evaluating Digital Marketing4.4.10Case Study - The Marketing Mix & Promotion4.4.11Place & Distribution
4.5HL Only: The Extended Marketing Mix
4.6HL Only: International Marketing
4.7E-Commerce
5Operations Management
5.1The Role of Operations Management
5.2Production Methods
5.3HL Only: Lean Prodution & Quality Management
5.4HL Only: Production Planning
5.5HL Only: Research & Development
Practice questions on Why Businesses Exist & Sectors
Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.
- 1Name three ways business impacts a country and its residents:Fill in the list
- 2Which of the following is an example of inputs?Multiple choice
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