Commerce O Level Notes

500.00

Book Code : 166
Number of Pages : 173
Author : Zeeshan Sheikhd
Language : English
Publishers : Read and Write Publications
Categories: ,

Description

TABLE OF CONTENTS
UNIT 1 PRODUCTION ………………………………………………………………………………………………………………………. 20
What is commerce? …………………………………………………………………………………………………………………………… 20
1.1 THE CHAIN OF PRODUCTION ………………………………………………………………………………………………………… 20
Production………………………………………………………………………………………………………………………………………… 20
Chain of production …………………………………………………………………………………………………………………………… 20
Needs and Wants ………………………………………………………………………………………………………………………………. 21
Needs ………………………………………………………………………………………………………………………………………………. 21
Wants………………………………………………………………………………………………………………………………………………. 21
1.2 PRIMARY INDUSTRIES, SECONDARY INDUSTRIES AND TERTIARY ACTIVITIES ……………………………………………………. 21
Direct Production and Indirect production. …………………………………………………………………………………………… 21
Direct production ………………………………………………………………………………………………………………………………. 21
Primary, Secondary and Tertiary Sector of Production: …………………………………………………………………………… 21
Primary production ……………………………………………………………………………………………………………………………. 22
Secondary production ………………………………………………………………………………………………………………………… 22
Tertiary production ……………………………………………………………………………………………………………………………. 22
How are manufacturing and tertiary activities inter-related? ………………………………………………………………….. 23
1.3 SPECIALIZATION AND DIVISION OF LABOR ………………………………………………………………………………………….. 23
Specialization ……………………………………………………………………………………………………………………………………. 23
Forms of Specialization ………………………………………………………………………………………………………………………. 24
1.4 COMMERCE ……………………………………………………………………………………………………………………………. 25
Trade and Aids to Trade ……………………………………………………………………………………………………………………… 25
Types of Trade ………………………………………………………………………………………………………………………………….. 25
Purpose / Importance of Foreign (overseas) trade …………………………………………………………………………………. 26
Comparison of Home Trade and Foreign Trade ……………………………………………………………………………………… 26
Aids to Trade …………………………………………………………………………………………………………………………………….. 27
1.5 THE RELATIONSHIP BETWEEN INDUSTRY, COMMERCE AND DIRECT SERVICES ……………………………………………………. 27
UNIT 2 RETAIL TRADE ……………………………………………………………………………………………………………………… 30
2.1 THE ROLE OF RETAILER IN THE CHAIN OF DISTRIBUTION …………………………………………………………………………… 30
The Retail Trade ………………………………………………………………………………………………………………………………… 30
2.2 TYPES OF RETAILERS ………………………………………………………………………………………………………………….. 31
Small Scale Retailers ………………………………………………………………………………………………………………………….. 31
Peddlers / Hawkers / Roadside Traders / Mobile Shops / Street Markets ………………………………………………….. 31
Advantages ………………………………………………………………………………………………………………………………………. 32
Disadvantages ………………………………………………………………………………………………………………………………….. 32
Unit Retailers ……………………………………………………………………………………………………………………………………. 32
Advantages ………………………………………………………………………………………………………………………………………. 32
Disadvantages ………………………………………………………………………………………………………………………………….. 33
Automatic Vending Machines ……………………………………………………………………………………………………………… 33
Advantages ………………………………………………………………………………………………………………………………………. 33
Disadvantages ………………………………………………………………………………………………………………………………….. 33
Specialty shops ………………………………………………………………………………………………………………………………….. 34
Advantages ………………………………………………………………………………………………………………………………………. 34
Disadvantages ………………………………………………………………………………………………………………………………….. 34
LARGE SCALE RETAILERS …………………………………………………………………………………………………………………….. 34
Department Store ……………………………………………………………………………………………………………………………… 34
Advantages of departmental stores …………………………………………………………………………………………………….. 34
Disadvantages of departmental stores …………………………………………………………………………………………………. 35
Multiple Chain Stores / Multiple Shops:………………………………………………………………………………………………… 35
Advantages ………………………………………………………………………………………………………………………………………. 36
Disadvantages ………………………………………………………………………………………………………………………………….. 36
Super market ……………………………………………………………………………………………………………………………………. 36
Advantages of supermarket ……………………………………………………………………………………………………………….. 37
Disadvantages of supermarkets ………………………………………………………………………………………………………….. 37
Hyper Market ……………………………………………………………………………………………………………………………………. 37
Advantages of hypermarket ……………………………………………………………………………………………………………….. 38
Disadvantages of hypermarkets ………………………………………………………………………………………………………….. 38
2.3 LARGE SCALE AND SMALL SCALE RETAILING ……………………………………………………………………………………….. 38
How do small scale retailers survive against competition from large scale retailers? …………………………………. 39
2.4 SELLING TECHNIQUES AND METHODS AND THE IMPLICATIONS OF E-COMMERCE ……………………………………………….. 40
Branding / Own Brands / Logo ……………………………………………………………………………………………………………. 40
Packaging ………………………………………………………………………………………………………………………………………… 41
Self Service ……………………………………………………………………………………………………………………………………….. 42
After Sale Service ………………………………………………………………………………………………………………………………. 42
Computers as AID to retailing ……………………………………………………………………………………………………………… 43
E-commerce ……………………………………………………………………………………………………………………………………… 45
Why Small Scale Retailers are dependent on wholesalers ……………………………………………………………………….. 45
2.5 TRENDS IN RETAILING ………………………………………………………………………………………………………………… 46
Omni-channel (Omni-channel retailing) ……………………………………………………………………………………………….. 46
Self Service Checkouts ………………………………………………………………………………………………………………………… 46
Loyalty Programs ………………………………………………………………………………………………………………………………. 47
Mobile Retailing: (m-commerce) …………………………………………………………………………………………………………. 47
UNIT 3 CUSTOMER CREDIT ………………………………………………………………………………………………………………. 50
3.1 USE OF CREDIT ………………………………………………………………………………………………………………………… 50
Reasons for giving Credit / Reasons for increased use of credit ……………………………………………………………….. 50
3.2 TYPES OF CREDIT ……………………………………………………………………………………………………………………… 51
Hire Purchase ……………………………………………………………………………………………………………………………………. 52
Extended Credit / Deferred payment: …………………………………………………………………………………………………… 53
Store cards ……………………………………………………………………………………………………………………………………….. 54
Credit Cards ……………………………………………………………………………………………………………………………………… 54
Informal Credit / Lay-bye ……………………………………………………………………………………………………………………. 56
3.3 SUITABILITY OF DIFFERENT TYPES OF CREDIT ……………………………………………………………………………………….. 57
UNIT 4 WHOLESALER ………………………………………………………………………………………………………………………. 60
4.1 THE ROLE OF WHOLESALER IN THE CHAIN OF DISTRIBUTION ………………………………………………………………………. 60
Wholesale Trade: ………………………………………………………………………………………………………………………………. 60
Channel of Distribution ………………………………………………………………………………………………………………………. 60
Different Channels of Distribution ……………………………………………………………………………………………………….. 60
Factors affecting choice of Channel of Distributions ………………………………………………………………………………. 61
4.2 FUNCTIONS AND SERVICES OF THE WHOLESALER …………………………………………………………………………………… 62
Cash-and-carry wholesalers ………………………………………………………………………………………………………………… 62
Voluntary chains ……………………………………………………………………………………………………………………………….. 62
Reasons why do wholesalers not operate at retail level ………………………………………………………………………….. 63
Why the role of wholesaler is on decline ………………………………………………………………………………………………. 63
4.3 INTERMEDIARIES ……………………………………………………………………………………………………………………… 64
Middle Man ……………………………………………………………………………………………………………………………………… 64
Agents: …………………………………………………………………………………………………………………………………………….. 65
1. Factors ……………………………………………………………………………………………………………………………………… 65
2. Brokers ……………………………………………………………………………………………………………………………………… 65
Special types of Middleman ………………………………………………………………………………………………………………… 65
Why Small Scale Retailers are dependent on wholesalers ……………………………………………………………………….. 65
UNIT 5 DOCUMENTS OF TRADE ………………………………………………………………………………………………………… 68
Why are Documents needed? ……………………………………………………………………………………………………………… 68
COMMON FEATURES in all Documents ………………………………………………………………………………………………… 68
5.1 DOCUMENTS OF HOME TRADE ……………………………………………………………………………………………………… 68
ENQUIRY (Issued by: Buyer, Issued to: Seller) ………………………………………………………………………………………… 68
QUOTATION (Issued by: Seller, Issued to: Buyer) ……………………………………………………………………………………. 69
CATALOGUE (Issued by: Seller, Issued to: Buyer) ……………………………………………………………………………………. 69
PRICE LIST (Issued by: Seller, Issued to: Buyer) ………………………………………………………………………………………. 69
ORDER (Issued by: Buyer, Issued to: Seller) …………………………………………………………………………………………… 69
ADVICE NOTE (Issued by: Seller, Issued to: Buyer) ………………………………………………………………………………….. 69
DELIVERY NOTE (Issued by: Seller, Issued to: Buyer) ……………………………………………………………………………….. 69
INVOICE (Issued by: Seller, Issued to: Buyer) …………………………………………………………………………………………. 69
CREDIT NOTE (Issued by: Seller, Issued to: Buyer) ………………………………………………………………………………….. 71
STATEMENT OF ACCOUNT (Issued by: Seller, Issued to: Buyer) ………………………………………………………………… 71
Differences between Invoice and Statement of Account …………………………………………………………………………. 72
Sequence of Documents in Home Trade ……………………………………………………………………………………………….. 72
5.2 TERMS OF PAYMENT ………………………………………………………………………………………………………………….. 73
Cash discount ……………………………………………………………………………………………………………………………………. 73
Trade discount ………………………………………………………………………………………………………………………………….. 73
Mark-up …………………………………………………………………………………………………………………………………………… 74
UNIT 6 INTERNATIONAL TRADE ………………………………………………………………………………………………………… 76
International trade ……………………………………………………………………………………………………………………………. 76
6.1 THE IMPORTANCE OF INTERNATIONAL TRADE ……………………………………………………………………………………… 76
Types of International/Foreign Trade …………………………………………………………………………………………………… 77
Visible and Invisible Trade ………………………………………………………………………………………………………………….. 77
Similarities between Home Trade and Foreign Trade ……………………………………………………………………………… 77
Differences between Home Trade and Foreign Trade …………………………………………………………………………….. 77
Interdependence of countries ……………………………………………………………………………………………………………… 77
6.2 BALANCE OF TRADE AND BALANCE OF PAYMENTS …………………………………………………………………………………. 78
Balance of Trade ……………………………………………………………………………………………………………………………….. 78
Balance of Payments …………………………………………………………………………………………………………………………. 78
(i) The Current Account ………………………………………………………………………………………………………………………. 78
(ii) The Capital Account ………………………………………………………………………………………………………………………. 79
(iii) The Financial Account …………………………………………………………………………………………………………………… 79
Why deficit in Balance of Payments and Balance of Trade is undesirable………………………………………………….. 79
6.3 CUSTOMS AUTHORITIES………………………………………………………………………………………………………………. 79
6.4 FREE TRADE, TRADING BLOCS AND PROTECTIONISM ………………………………………………………………………………. 80
Free trade: ……………………………………………………………………………………………………………………………………….. 80
Trading blocs …………………………………………………………………………………………………………………………………….. 80
Protectionism: …………………………………………………………………………………………………………………………………… 81
How to protect from imports-to make balance of payment surplus?………………………………………………………… 81
Effects of protectionism ……………………………………………………………………………………………………………………… 81
6.5 DIFFICULTIES FACED BY IMPORTERS AND EXPORTERS ……………………………………………………………………………… 81
Difficulties faced by Exporters: ……………………………………………………………………………………………………………. 82
Exporters and Aids to Trade: ……………………………………………………………………………………………………………….. 84
UNIT 7 ADVERTISING ………………………………………………………………………………………………………………………. 86
7.1 THE ROLE OF ADVERTISING …………………………………………………………………………………………………………… 86
Aims / Purposes of Advertisement ……………………………………………………………………………………………………….. 86
Advantages of advertisement: …………………………………………………………………………………………………………….. 87
Dangers of Advertisement: (Criticism on advertisements) ………………………………………………………………………. 87
Types of Advertising …………………………………………………………………………………………………………………………… 88
7.2 ADVERTISING MEDIA ………………………………………………………………………………………………………………… 89
Television …………………………………………………………………………………………………………………………………………. 90
Radio ……………………………………………………………………………………………………………………………………………….. 90
Internet ……………………………………………………………………………………………………………………………………………. 91
Cinema …………………………………………………………………………………………………………………………………………….. 91
National Newspapers ………………………………………………………………………………………………………………………… 92
Local Newspapers ……………………………………………………………………………………………………………………………… 92
Magazines………………………………………………………………………………………………………………………………………… 93
Trade Journals:………………………………………………………………………………………………………………………………….. 93
Trade Fairs / Shows / Exhibition ………………………………………………………………………………………………………….. 93
Leaflets / Flyers / Pamphlets……………………………………………………………………………………………………………….. 94
Packaging / Plastic Bags …………………………………………………………………………………………………………………….. 94
Direct mail………………………………………………………………………………………………………………………………………… 94
Sponsorships …………………………………………………………………………………………………………………………………….. 95
Catalogs / Broachers ………………………………………………………………………………………………………………………….. 95
Digital Billboard ………………………………………………………………………………………………………………………………… 95
Transport Vehicles …………………………………………………………………………………………………………………………….. 95
Point of sale display / Windows display ………………………………………………………………………………………………… 96
Neon Lights / Signs ……………………………………………………………………………………………………………………………. 96
Factors affecting choice of Advertisement Media ………………………………………………………………………………….. 96
7.3 METHODS OF APPEAL (DEVICES) ……………………………………………………………………………………………………. 97
Color ………………………………………………………………………………………………………………………………………………… 97
Emotion ……………………………………………………………………………………………………………………………………………. 97
Ambition ………………………………………………………………………………………………………………………………………….. 97
Famous people (celebrities) ………………………………………………………………………………………………………………… 97
Music ………………………………………………………………………………………………………………………………………………. 97
Humor ……………………………………………………………………………………………………………………………………………… 97
7.4 SALES PROMOTION …………………………………………………………………………………………………………………… 98
Difference between Advertising and Sales Promotion …………………………………………………………………………….. 98
Methods of promotion ……………………………………………………………………………………………………………………….. 98
Displays and demonstrations:……………………………………………………………………………………………………………… 98
Factors effecting choice of sales promotion method: ……………………………………………………………………………… 99
7.5 TRENDS IN ADVERTISING: ……………………………………………………………………………………………………………. 99
Digital Billboards:…………………………………………………………………………………………………………………………….. 100
Product Placement: ………………………………………………………………………………………………………………………….. 100
Mobile phone advertisement: ……………………………………………………………………………………………………………. 100
Digital Video Advertisement: …………………………………………………………………………………………………………….. 100
Importance of Internet Advertising: …………………………………………………………………………………………………… 101
UNIT 8 COMMUNICATION ……………………………………………………………………………………………………………… 104
8.1 IMPORTANCE OF COMMUNICATIONS IN TRADE AND THE GLOBAL MARKET ……………………………………………………. 104
Importance of communication in commerce ……………………………………………………………………………………….. 104
8.2 METHODS OF COMMUNICATIONS, INTERNAL AND EXTERNAL ………………………………………………………………….. 105
Verbal / Oral …………………………………………………………………………………………………………………………………… 105
Visual …………………………………………………………………………………………………………………………………………….. 105
Written …………………………………………………………………………………………………………………………………………… 105
Electronic methods of communication ……………………………………………………………………………………………….. 106
Telephones ……………………………………………………………………………………………………………………………………… 106
Mobile-phones ………………………………………………………………………………………………………………………………… 106
Internet ………………………………………………………………………………………………………………………………………….. 106
Email ……………………………………………………………………………………………………………………………………………… 107
Intranet ………………………………………………………………………………………………………………………………………….. 107
Teleconferencing and Video-conferencing…………………………………………………………………………………………… 107
Factors affecting choice of medium: …………………………………………………………………………………………………… 108
8.3 POSTAL SERVICES …………………………………………………………………………………………………………………… 108
8.4 TRENDS IN COMMUNICATION ……………………………………………………………………………………………………… 108
Tablets and Smart-phones: ……………………………………………………………………………………………………………….. 109
Social Media: ………………………………………………………………………………………………………………………………….. 109
Application Stores ……………………………………………………………………………………………………………………………. 109
UNIT 9 TRANSPORT ………………………………………………………………………………………………………………………. 112
9.1 TRANSPORTATION ……………………………………………………………………………………………………………… 112
Importance of Transportation …………………………………………………………………………………………………………… 112
Modes of Transportation ………………………………………………………………………………………………………………….. 112
Pipelines (Transport of gases, liquids)Road Transport…………………………………………………………………………… 112
Rail Transport …………………………………………………………………………………………………………………………………. 113
Air Transportation …………………………………………………………………………………………………………………………… 113
Sea Transportation ………………………………………………………………………………………………………………………….. 113
Waterways ……………………………………………………………………………………………………………………………………… 114
Pipelines …………………………………………………………………………………………………………………………………………. 114
Factors affecting choice of method of transport ………………………………………………………………………………….. 115
Cost of transportation: …………………………………………………………………………………………………………………….. 115
Risk of damage and safety issues ………………………………………………………………………………………………………. 115
Urgency or speed required ………………………………………………………………………………………………………………… 115
Convenience ……………………………………………………………………………………………………………………………………. 115
Distance …………………………………………………………………………………………………………………………………………. 115
Nature of goods. ……………………………………………………………………………………………………………………………… 115
Quantity to be transported. ………………………………………………………………………………………………………………. 115
Value of goods and security needed. ………………………………………………………………………………………………….. 115
Effects of owning transport to a business: …………………………………………………………………………………………… 116
9.2 CONTAINERIZATION ………………………………………………………………………………………………………………… 116
9.3 PORTS AND AIRPORTS ………………………………………………………………………………………………………………. 117
Port Authorities: ………………………………………………………………………………………………………………………………. 117
Airport Authorities: ………………………………………………………………………………………………………………………….. 117
9.4 TRANSPORT DOCUMENTS: …………………………………………………………………………………………………………. 117
(i) Delivery Note: ………………………………………………………………………………………………………………………….. 118
(ii) Consignment Note: ……………………………………………………………………………………………………………….. 119
(iii) Bill of Lading: ……………………………………………………………………………………………………………………….. 119
(iv) Air Waybill: ………………………………………………………………………………………………………………………….. 121
9.5 DEVELOPMENT AND TRENDS IN TRANSPORTATION ……………………………………………………………………………… 121
Chartering Transport: ………………………………………………………………………………………………………………………. 121
Express Routes. ……………………………………………………………………………………………………………………………….. 121
Changes in use of rail transport, mass transit system and high speed trains: …………………………………………… 122
Increased use of freight forwarders: …………………………………………………………………………………………………… 122
UNIT 10 WAREHOUSING ……………………………………………………………………………………………………………… 124
10.1 ROLE OF WAREHOUSING …………………………………………………………………………………………………………… 124
Importance of Warehouses to business and trade ……………………………………………………………………………….. 124
Production………………………………………………………………………………………………………………………………………. 124
Prices ……………………………………………………………………………………………………………………………………………… 124
Regular Supply ………………………………………………………………………………………………………………………………… 124
Prepares goods and make them sale-able: ………………………………………………………………………………………….. 124
Display of goods:……………………………………………………………………………………………………………………………… 124
Services to International Trade: …………………………………………………………………………………………………………. 124
10.2 TYPES OF WAREHOUSES: …………………………………………………………………………………………………………… 125
Bonded Warehouse: ………………………………………………………………………………………………………………………… 125
Cold Storage Warehouse: …………………………………………………………………………………………………………………. 125
Cash and Carry warehouses: ……………………………………………………………………………………………………………… 126
Manufacturer and Retailer Warehouses: ……………………………………………………………………………………………. 126
Regional Distribution Centers: …………………………………………………………………………………………………………… 126
UNIT 11 INSURANCE ……………………………………………………………………………………………………………………. 128
11.1 PURPOSES OF INSURANCE ………………………………………………………………………………………………………….. 128
How does Insurance help the economy? …………………………………………………………………………………………….. 129
The importance of pooling of Risk ……………………………………………………………………………………………………… 129
11.2 BUSINESS AND PERSONAL RISKS …………………………………………………………………………………………………… 130
Business Risks …………………………………………………………………………………………………………………………………. 130
Personal Risks …………………………………………………………………………………………………………………………………. 131
Difference between Insurable and Non Insurable Risks …………………………………………………………………………. 131
11.3 PRINCIPLES OF INSURANCE ………………………………………………………………………………………………….. 132
Indemnity/Compensation …………………………………………………………………………………………………………………. 132
Insurable Interest: ……………………………………………………………………………………………………………………………. 132
Utmost Good Faith: …………………………………………………………………………………………………………………………. 132
Evaluating Insurance Quotation Depends upon …………………………………………………………………………………… 133
11.4 EFFECTING INSURANCE COVER …………………………………………………………………………………………………….. 133
Procedure: ………………………………………………………………………………………………………………………………………. 133
11.5 STATISTICAL BASIS OF INSURANCE ………………………………………………………………………………………………… 134
Factors affecting the Premium ………………………………………………………………………………………………………….. 134
Premiums and its calculations: ………………………………………………………………………………………………………….. 134
Main Documents of Insurance: ………………………………………………………………………………………………………….. 135
Proposal Form …………………………………………………………………………………………………………………………………. 135
Cover Note ……………………………………………………………………………………………………………………………………… 135
Insurance Policy ………………………………………………………………………………………………………………………………. 135
Insurance Broker: …………………………………………………………………………………………………………………………….. 135
Functions of Insurance Broker: ………………………………………………………………………………………………………….. 135
Benefits to the customers using Insurance Broker: ……………………………………………………………………………….. 136
11.6 EFFECTING INSURANCE CLAIM …………………………………………………………………………………………………….. 136
Claim Form: …………………………………………………………………………………………………………………………………….. 137
UNIT 12 BANKING ………………………………………………………………………………………………………………………. 140
Introduction ……………………………………………………………………………………………………………………………………. 140
12.1 BANKING SERVICES …………………………………………………………………………………………………………….. 140
Services offered by the commercial banks: ………………………………………………………………………………………….. 140
Savings Account ………………………………………………………………………………………………………………………………. 140
Current Account ………………………………………………………………………………………………………………………………. 140
Paying-in Slip: …………………………………………………………………………………………………………………………………. 141
Issuance of Bank Statement: …………………………………………………………………………………………………………….. 141
Night Safe Deposits: …………………………………………………………………………………………………………………………. 142
ATM (Automated Teller Machine) services: …………………………………………………………………………………………. 142
Internet Banking ……………………………………………………………………………………………………………………………… 143
Telebanking ……………………………………………………………………………………………………………………………………. 143
Bank over-draft ……………………………………………………………………………………………………………………………….. 143
12.2 MEANS OF PAYMENT IN HOME AND INTERNATIONAL TRADE ……………………………………………………. 144
Payments in Home trade ………………………………………………………………………………………………………………….. 144
Cash: ……………………………………………………………………………………………………………………………………………… 144
Cheques: ………………………………………………………………………………………………………………………………………… 144
Credit Transfers / Bank Giro ……………………………………………………………………………………………………………… 145
Standing Orders / Banker’s order: ……………………………………………………………………………………………………… 146
Direct Debit …………………………………………………………………………………………………………………………………….. 146
Comparison of Standing Order and Direct Debit: …………………………………………………………………………………. 147
Credit Cards ……………………………………………………………………………………………………………………………………. 147
Debit Cards …………………………………………………………………………………………………………………………………….. 147
Bank Drafts / Cashier’s Cheque / Banker’s Cheque ………………………………………………………………………………. 147
Factors effecting choice of method of payment …………………………………………………………………………………… 148
Means of payment in International trade: ………………………………………………………………………………………….. 148
Remittances: …………………………………………………………………………………………………………………………………… 148
Electronic Transfers: ………………………………………………………………………………………………………………………… 148
Documentary Credit (Letter of credit) …………………………………………………………………………………………………. 148
12.3 TRENDS IN BANKING ……………………………………………………………………………………………………………….. 148
Mobile and digital Banking / Internet Banking:……………………………………………………………………………………. 148
Mobile Wallets: ……………………………………………………………………………………………………………………………….. 149
UNIT 13 THE BUSINESS UNIT ………………………………………………………………………………………………………… 152
13.1 LOCATION OF A BUSINESS INCLUDING RETAIL UNITS …………………………………………………………………………… 152
Location of Primary Production Units …………………………………………………………………………………………………. 152
Location of Secondary Production Units ……………………………………………………………………………………………… 152
Location of Tertiary Production Units …………………………………………………………………………………………………. 153
13.2 PUBLIC AND PRIVATE SECTOR ………………………………………………………………………………………………. 153
The Public Sector ……………………………………………………………………………………………………………………………… 153
Types of Private Sector Organizations ………………………………………………………………………………………………… 153
Sole Trader ……………………………………………………………………………………………………………………………………… 153
Partnership …………………………………………………………………………………………………………………………………….. 154
Private Limited Company ………………………………………………………………………………………………………………….. 154
Public Limited Company ……………………………………………………………………………………………………………………. 154
Public Corporations ………………………………………………………………………………………………………………………….. 155
13.4 FRANCHISES ………………………………………………………………………………………………………………………. 156
Franchisor: ……………………………………………………………………………………………………………………………………… 156
Franchisee: ……………………………………………………………………………………………………………………………………… 156
Franchise Agreement: ………………………………………………………………………………………………………………………. 156
13.5 MULTINATIONAL COMPANIES: …………………………………………………………………………………………….. 158
UNIT 14 FINANCE ……………………………………………………………………………………………………………………….. 160
14.1 SOURCES OF FINANCE …………………………………………………………………………………………………………. 160
Long term and Short Term Finance …………………………………………………………………………………………………….. 160
Long-term Financing ………………………………………………………………………………………………………………………… 160
Shares: …………………………………………………………………………………………………………………………………………… 160
Debentures: ……………………………………………………………………………………………………………………………………. 161
Mortgage: ………………………………………………………………………………………………………………………………………. 161
Loans: …………………………………………………………………………………………………………………………………………….. 161
Sale and Leaseback: …………………………………………………………………………………………………………………………. 161
Short-term Financing ……………………………………………………………………………………………………………………….. 161
Overdraft: ………………………………………………………………………………………………………………………………………. 161
Debt Factoring ………………………………………………………………………………………………………………………………… 161
Leasing …………………………………………………………………………………………………………………………………………… 162
Trade Credit: …………………………………………………………………………………………………………………………………… 162
Hire Purchase ………………………………………………………………………………………………………………………………….. 162
Long-term vs. Short-term Financing …………………………………………………………………………………………………… 162
Methods of Self-Financing ………………………………………………………………………………………………………………… 163
Retained Profits: (Retained Earnings) …………………………………………………………………………………………………. 163
Sale of Asset: …………………………………………………………………………………………………………………………………… 163
Savings: ………………………………………………………………………………………………………………………………………….. 163
Sources of Finance in particular given business situations …………………………………………………………………….. 164
Finance for commercial activity: ………………………………………………………………………………………………………… 164
UNIT 15 CHANGING ENVIRONMENT OF COMMERCE ………………………………………………………………………… 168
15.1 COMMERCIAL ACTIVITY AND THE EXTERNAL ENVIRONMENT …………………………………………………….. 168
Political Factors:………………………………………………………………………………………………………………………………. 168
Economic Factors: ……………………………………………………………………………………………………………………………. 168
Social Factors: …………………………………………………………………………………………………………………………………. 168
Technological Factors: ……………………………………………………………………………………………………………………… 169
15.2 COMMERCIAL AND ENVIRONMENTAL EFFECTS OF E-COMMERCE ………………………………………………. 169
E-shop: (e-store or e-tailer) ……………………………………………………………………………………………………………….. 169
Commercial Effects of e-commerce: …………………………………………………………………………………………………… 170
15.3 COMMERCE AND THE ENVIRONMENT ……………………………………………………………………………………. 171
Environmental Effects of e-commerce: ……………………………………………………………………………………………….. 171
15.4 CONSUMER PROTECTION …………………………………………………………………………………………………….. 172
Importance of Consumer Protection …………………………………………………………………………………………………… 172
Methods of safeguarding the consumer ……………………………………………………………………………………………… 172
Consumers Rights ……………………………………………………………………………………………………………………………. 172
Actions that a consumer can take: …………………………………………………………………………………………………….. 173
Faulty Goods: ………………………………………………………………………………………………………………………………….. 173
If after purchase, customer does not like the product: ………………………………………………………………………….. 173

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