What Is a Business
Essay Preview: What Is a Business
Report this essay
What is a business?
A business is an organization which produces goods and / or services. i.e. products. It is involved in the process of turning input into output
Goods: tangible products, such as cars, books
Services: intangible products such as haircuts, a bus ride
Goods: capital goods & consumer goods
Capital/ Producer goods are products purchased by other business to produces other products: machineries, computers
Consumer goods: are products sold to the general public. These can be durable (last long time- furniture) or not durable (burger, newspapers)
Purpose: Business exist to satisfy the needs and wants of customers (people, organization and government). They must add value in the production process in order to make profit.
Needs: Basic necessities that a person must have to service eg: food, shelter, clothing
Wants: the deires of people eg; things they would like to have such as mobile phones, burger, larger house, etc.
Customers: are people or organizations that buy a product
– public: consumers
-Business
-government
Consumer: those who actually use the product
Value added: the difference between the value of inputs (cost of production) and the value of outputs (selling price)
Market: simply a place. A process whereby buyers (customers) and seller (businesses) to meet to trade. It can be a physical outlet or it can exist in a non- physical form( internet)
Business functions: A business in carried out by many activities. These activities can be grouped into four main functional areas/ departments.
– production or operations
– marketing
– Finance
– Human resources/ personnel
Production: Production department is responsible for converting raw materials into finished goods. Ex: the site where houses are constructed
Marketing: is concern with identifying consumer needs and wants and satisfying them. Marketing activities include market research, advertising, packaging, distribution and packing. These activities can be summed as the four Ps of marketing: product price, promotion and place.
Finance: The finance departments is in charge of managing and controlling the money in the business. Its duties include recording