The Business Environment Unit 1 Aim: Know the range of different businesses and their ownership.

The Business Environment Unit 1

Aim: Know the range of different businesses and their ownership.

Objectives

• By the end of the lesson you will be able to: • Understand the purpose of business, why they

exist and what effects business success. • Explain the different ownership types of

businesses. • Explain what is meant by the term ‘key

stakeholders and why they are important.

What is business ?

1. What is the main purpose of a business?2. Who benefits from business ? 3. What can effect a businesses ability to be

successful?

4. Think about what the word ‘business’ means to you and come up with your own definition.

Business is….

• “An organisation or economic system where goods and services are exchanged for one another or for money. Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit”.

Read more: http://www.businessdictionary.com/definition/business.html#ixzz2bC6P2dmi

What is the purpose of a business?

• To make a profit. • To grow. • To supply goods and services. • Satisfy customer needs and demands. • Generate money for the economy. • Supply employment opportunities.

Activity • Throughout this unit we will

be studying:• St Gemma’s Hospice in Leeds. • Marks and Spencer PLC.

• Research both organisations and find out what their purpose is.

• How are these organisations different?

Range of businesses

“The variety of different types of business. Classified by: How they operate, what the businesses are trying to achieve and the sector of business activity they are involved in”. Businesses are: Local National InternationalGlobal A business can grow from Local To Global for example M&S.

Business sectors • Primary

• Secondary

• Tertiary

• Manufacturing

• Retailing.

What affects a businesses success ?

A quick introduction to: PEST:It is important to understand that the environment in which a business operates has a direct impact on business success, profit and growth.

Look at some current issues in the news which effect Marks and Spencers ? Look for social economic political or technological.

Ownership

Ownership types

• All businesses have an ownership types. The type chosen by the business can often depend on the size and needs of the business.

• The potential risks and liabilities of the business.• The formalities and expenses involved in establishing

and maintaining the various business structures.• Resources. • Income tax situation. • Investment needs.

Ownership types.

Profit-making (private) organisations are divided into four main types:• Sole trader• Partnership • Private Limited Companies (LTD)• Public Limited Companies (PLC)Non profit making 2 types: • Government (public) • Voluntary / charitable trusts.

Liability

Unlimited liability:The business owners are liable

for any debt. If the company runs into debt

they may have to sell:

Limited liability:The Business owns the debt.

share holders are ONLY liable for the amount of money they invested in the business.

If the company goes bankrupt shareholders will lose:

Sole traders and (simple)

partnerships

Companies with investors: PLC’s

and LTD

PROTECTED!

Activity

• Business types and ownership activity.

• Watch the video to recap what has been learned so far. Use the hand out and complete the activities in the video.

• http://www.youtube.com/watch?v=6FNXQZ_4LD8

Activity

• Look at the 2013 annual report for Marks and Spencer PLC.

• In buzz groups, chose 5 key business environment issues which has affected Marks and Spencer’s.

• Explain what Marks and Spencer’s have done to responded to these issues.

• http://annualreport.marksandspencer.com/overview/marketplace/

Stakeholder activity

“A person with an interest or concern in something, especially a business”.

• Try to think of 10 different stakeholders who have an interest in Marks and Spencer’s business activities and financial performance.

• Think about internal and external stakeholders, (within the business and outside of the business) such as the general public, the government and within the business and retail world.

• Why do you think these stakeholders are important to the business? (why does the business want to please them)

Use the following annual report to help you. http://annualreport.marksandspencer.com/strategic-review/

http://plana.marksandspencer.com/?intid=gft_plana

What do these stakeholders want from Marks and Spencer PLC ?

Customers Employees Suppliers

Owners / shareholders

Trade unionsEmployer associations

Local & national communities

Governments

Marks and Spencer’s have a plan to meet stakeholder needs: This is what they plan to do within 5 years. http://corporate.marksandspencer.com/howwedobusiness/stakeholder_event_2012_highlights

• Watch the news clip about the horse meat scandal.

• What stakeholders are effected ?

• How the different stakeholders will respond to the scandal?

• What are the consequences for the supplier Dalepack and supermarkets, for example, Tesco and Iceland?

• http://www.youtube.com/watch?v=7YWmunrftek