Unit 2:
● e-commerce: buying and selling over the internet
● Business-to -business buying and selling: trading, has cut the costs of ordering new
components, parts and stocks of goods. Buyers can use databases for information about
items all over the world.
● Business-to -consumer selling - can create a relationship with customers, a company's
website can reach anyone in the world with the internet, buying is time saving and less
expensive, creating a website that users will want to keep on visiting.
● Main factors of a good website: content must be interesting, communities want
customers to feel valued and part of a community and commerce generates income
through advertising, shopping etc.
● Benefits of a good website to the provider: low costs once the site is made, doesn’t have
to have an expensive location, can write more information about products, access to a
wider market. To consumers: lower prices, can do it at home, can spend as much time
as they want and get more information, and don't need to be near the provider.
● Problems: the cost and time taken to create a website, having to hire a specialist for it.
Making payment over the internet is risky and less secure so customers may not want to
purchase items online. The importance of relationships since there is no face to face
contact. Poor customer service, late deliveries for example. Bad internet access or
deliveries are unreliable.
● The internet and social media is a way of generating discussion, companies build
discussion forums into their websites and encourage customers to talk about their
products. Spread the message through Facebook by sending a link and companies can
encourage online feedback. And advertising provides talking points about the products.
○ Ethics are moral principles and values that influence how people behave and that
operate in the world of business. Businesses don’t have to be ethical and can still
be legal. Being ethical increases costs, decreasing profits. An ethical business:
looks after employees, reduces waste, gives fair wages, respects the
environment and does good work in the community.
● CSR corporate social responsibility describes the way in which an ethical business
contributes to society. E.g. no child labour, fair wages, fair price to suppliers, reducing
waste/pollution. Unethically: profit over morals.
● Water pollution: some factories are located near the sea to access the water needed for
manufacturing , releasing waste into water sources which harms the environment and
the people. Need to budget waste disposal.
● Air pollution: coal fired energy produces pollution and businesses keeping to regulations
is a cost for the business.
● Social costs : cost to community and society.
● Global warming: rise in air and sea temperatures caused by industrial activity. People
should be able to enjoy consuming food and live longer. A continued growth in wellbeing
is sustainable development.
, ● Sustainable development involves minimising waste and pollution. These are companies
providing energy sources or non polluting forms of transport. Can buy items such as
energy saving light bulbs or devices that measure electricity consumption and washing
powder that can be used with cold water. Recycling is now important to reuse
waste.Businesses exist that deal with the processing of these wastes.
● When carrying out a decision, there are financial costs and benefits, financial revenue -
financial costs = net financial return.(profit)
● Social benefits include financial and many other benefits.
● Social costs are a financial cost and all the other costs resulting.
● All benefits - all costs = net benefit
● Traffic congestion is a cost because more petroleum is used for lorries and vans
transporting goods.
● Owners and managers are interested in financial costs and benefits and other
stakeholders on social ones. Social benefits have to outweigh social costs to make that
decision. Cost benefit analysis is used as part of the decision making process especially
for government projects. Any decision will affect stakeholders.
● Interest: a charge made by the bank for lending you money. Cost of borrowing money.
Interest rate is expressed as a %. Rising rates affect profit, usually a rate is agreed at the
start of a loan. But these rates are unpredictable. Increase rates to discourage people
from burrowing and lower rates if want to encourage spending.
● Businesses also have overdrafts (spend more than is on their account up to a set figure).
● Islamic finance: no interest is allowed. How Islamic banks provide finance for business.
Ijara: a bank will buy an item and lease it back to the customer. Each month the
customer pays the lease cost but the bank is the owner of the item. Murabaha: bank will
buy an item for the customer, customer becomes the owner then repays the bank in
instalments paying more than the cost of the item so the bank can cover their costs.
Musharaka: bank will set up a joint venture with a customer and both will get a share of
the profits.
● Advantage of this is that the cost of borrowing is more predictable, and there is a sense
of partnership between bank and borrower.
● In economies, there are periods in which the economy grows for a few years, followed by
periods in which growth starts to fall, which is known as a business cycle.
● In growth overtime, there is a series of recessions and recoveries. A Recession is a
period in which economic growth declines for over six months. When the recession lasts
for much longer, like ⅔ years, it's a slump. Recovery is a period in which the economy
grows following a recession, a period of prolonged economic growth.
● There are booms and slumps. In a boom: output rises, firms take on more employees,
wages and price increase, businesses boom. In a slump: output falls, firms lay off
workers, wages and prices fall [ to maintain profits and not to reduce the number of
sales], businesses do badly.
● Businesses favour a boom period, this is when it's easiest to sell goods and order books
are likely full. But when it reaches the peak, costs increase and it is more difficult to
recruit labour and other costs sliek wages will rise so they will eb far more cautious in the
● e-commerce: buying and selling over the internet
● Business-to -business buying and selling: trading, has cut the costs of ordering new
components, parts and stocks of goods. Buyers can use databases for information about
items all over the world.
● Business-to -consumer selling - can create a relationship with customers, a company's
website can reach anyone in the world with the internet, buying is time saving and less
expensive, creating a website that users will want to keep on visiting.
● Main factors of a good website: content must be interesting, communities want
customers to feel valued and part of a community and commerce generates income
through advertising, shopping etc.
● Benefits of a good website to the provider: low costs once the site is made, doesn’t have
to have an expensive location, can write more information about products, access to a
wider market. To consumers: lower prices, can do it at home, can spend as much time
as they want and get more information, and don't need to be near the provider.
● Problems: the cost and time taken to create a website, having to hire a specialist for it.
Making payment over the internet is risky and less secure so customers may not want to
purchase items online. The importance of relationships since there is no face to face
contact. Poor customer service, late deliveries for example. Bad internet access or
deliveries are unreliable.
● The internet and social media is a way of generating discussion, companies build
discussion forums into their websites and encourage customers to talk about their
products. Spread the message through Facebook by sending a link and companies can
encourage online feedback. And advertising provides talking points about the products.
○ Ethics are moral principles and values that influence how people behave and that
operate in the world of business. Businesses don’t have to be ethical and can still
be legal. Being ethical increases costs, decreasing profits. An ethical business:
looks after employees, reduces waste, gives fair wages, respects the
environment and does good work in the community.
● CSR corporate social responsibility describes the way in which an ethical business
contributes to society. E.g. no child labour, fair wages, fair price to suppliers, reducing
waste/pollution. Unethically: profit over morals.
● Water pollution: some factories are located near the sea to access the water needed for
manufacturing , releasing waste into water sources which harms the environment and
the people. Need to budget waste disposal.
● Air pollution: coal fired energy produces pollution and businesses keeping to regulations
is a cost for the business.
● Social costs : cost to community and society.
● Global warming: rise in air and sea temperatures caused by industrial activity. People
should be able to enjoy consuming food and live longer. A continued growth in wellbeing
is sustainable development.
, ● Sustainable development involves minimising waste and pollution. These are companies
providing energy sources or non polluting forms of transport. Can buy items such as
energy saving light bulbs or devices that measure electricity consumption and washing
powder that can be used with cold water. Recycling is now important to reuse
waste.Businesses exist that deal with the processing of these wastes.
● When carrying out a decision, there are financial costs and benefits, financial revenue -
financial costs = net financial return.(profit)
● Social benefits include financial and many other benefits.
● Social costs are a financial cost and all the other costs resulting.
● All benefits - all costs = net benefit
● Traffic congestion is a cost because more petroleum is used for lorries and vans
transporting goods.
● Owners and managers are interested in financial costs and benefits and other
stakeholders on social ones. Social benefits have to outweigh social costs to make that
decision. Cost benefit analysis is used as part of the decision making process especially
for government projects. Any decision will affect stakeholders.
● Interest: a charge made by the bank for lending you money. Cost of borrowing money.
Interest rate is expressed as a %. Rising rates affect profit, usually a rate is agreed at the
start of a loan. But these rates are unpredictable. Increase rates to discourage people
from burrowing and lower rates if want to encourage spending.
● Businesses also have overdrafts (spend more than is on their account up to a set figure).
● Islamic finance: no interest is allowed. How Islamic banks provide finance for business.
Ijara: a bank will buy an item and lease it back to the customer. Each month the
customer pays the lease cost but the bank is the owner of the item. Murabaha: bank will
buy an item for the customer, customer becomes the owner then repays the bank in
instalments paying more than the cost of the item so the bank can cover their costs.
Musharaka: bank will set up a joint venture with a customer and both will get a share of
the profits.
● Advantage of this is that the cost of borrowing is more predictable, and there is a sense
of partnership between bank and borrower.
● In economies, there are periods in which the economy grows for a few years, followed by
periods in which growth starts to fall, which is known as a business cycle.
● In growth overtime, there is a series of recessions and recoveries. A Recession is a
period in which economic growth declines for over six months. When the recession lasts
for much longer, like ⅔ years, it's a slump. Recovery is a period in which the economy
grows following a recession, a period of prolonged economic growth.
● There are booms and slumps. In a boom: output rises, firms take on more employees,
wages and price increase, businesses boom. In a slump: output falls, firms lay off
workers, wages and prices fall [ to maintain profits and not to reduce the number of
sales], businesses do badly.
● Businesses favour a boom period, this is when it's easiest to sell goods and order books
are likely full. But when it reaches the peak, costs increase and it is more difficult to
recruit labour and other costs sliek wages will rise so they will eb far more cautious in the
