IB Business & Management

1. 1.1 Introduction to
Business
Management

2. Role of Business
Input Process Output

4. Business
Businesses exist to satisfy the needs and wants of people, organizations and
governments
Market Customers
Market
place

5. Adding Value
Adding value is increasing price of the products by improving
packaging or adding features
It leads to profit making by allowing a business to sell its products
for more than its production costs

6. Opportunity Cost
This next best alternative foregone while making a choice is known
as Opportunity Cost
Because of the fact that choice involves opportunity cost, the
factors of production have to be used in the most efficient way
and therefore SPECIALIZATION

7. Division of labor
The separation of a work process into a number of
tasks, with each task performed by a separate
person or group of persons.

8. Business Functions
 Human Resources
(Personnel)
 Marketing
 Finance
 Production
(Operations)

9. Human Resources
 Manpower Planning
 Job analysis and Job
description
 Determining wages and
salaries
 Recruitment and Selection
 Training and Development
 Employee welfare and
motivation
 Labour management
relations
 Performance Appraisal

10. Marketing
 Conducting Market
Research
 Price Planning
 Customer Relationship
Management
 Identifying New Business
Opportunities
 Product Planning
 Distribution Planning
 Consumer Analysis

11. Finance
 Advice on the financial and tax implications of
business decisions
 Management of wages
 Raising Finance
 Preparation and monitoring of annual budgets and
forecasts

12. Production
 Production and planning
 Purchasing department
 Stores department
 Manufacture of products
 Design and technical support department

13. Business sectors
Primary Tertiary
Secondary
Quaternary

14. Primary sector
 Larger sector in underdeveloped &
developing countries
 Less capital investment
 Less use of machinery
 Agriculture constitutes the major part

15. Secondary sector
 Takes the output of the primary sector and
manufactures finished goods
 Important sector to promote economic growth and
development
 Important source of income in developing countries

16. Tertiary sector
 Significant contribution to GDP in developed
countries
 Provides key inputs to most other business
 Transformation of goods through providing services

17. Quaternary Sector
The portion of an economy that is based on knowledge
applicable to some business activity that usually
involves the provision of services
Examples: Consultancy (offering advice to businesses)
and R&D (research, particularly in scientific fields)

19. Sectoral change
Refers to a shift in the GDP contribution from primary
sector to secondary and tertiary sector

21. Reasons for sectoral change
 Cultural Changes
 Development of Markets
 Market orientation
 Rampant migration
 Focus on customer relationship management

22. Benefits of sectoral change
 Creation of more jobs
 Gradual movement towards Tertiary sector
 High capital investment towards Government
 Increase in country’s GDP
 Decrease in imports & increase in exports

23. Role of Entrepreneurship
 Bringing together the factors of production
 Contributes towards growth of
economy
 Reduces unemployment

24. Intrapreneurship
Giving opportunity to a person within a large
corporation to take direct responsibility for turning an
idea into a profitable finished product through assertive
risk-taking and innovation

25. Start-up cost of business
 Premises
 Buildings
 Capital equipment
 Marketing costs
 Legal and professional fees

26. Factors to consider when setting
up business:
 Business idea
 Finance
 Human resources
 Entrepreneurial skills
 Fixed assets
 Suppliers
 Customers
 Marketing
 Legalities

27. Reasons for starting business
 Growth
 Earnings
 Autonomy
 Security
 Hobbies

28. Challenges of start-up business
 Obtaining Finance
 Market potential
 Cash flow problems
 Customer Loyalty towards other brands
 Regulations
 Finding the right staff
 Uncertainty

29. Elements of Business Plan