Studied by 7 people
product
anything that is capable of satisfying customer needs, they are usually tangible
service
an act that a business person carries out for you in exchange for money, they can be intangible
consumer
someone who buys and uses goods and sevices
enterprise
a business or company
entrepreneur
someone who creates a business, taking on financial risks with the aim of making a profit from the business
E-commerce
the buying and selling of goods/services online
obsolete
a product or service that is no longer used or that is out of date
original ideas
ideas that have not been used before to put a service or product into
Give three ways a new business comes about.
Any three from:
an original idea
changes in technology
changes in what consumers want/need
products/services becoming obsolete
adapting an existing product/service
to solve a problem
the entrepreneur has a passion or interest
Identify one way a business could create/innovate a new product.
any one from:
mix and matching two/multiple products
‘facelifting’/adding on to an old version
a completely new version of an old product
a cheaper version of an old product
invention
creating something that did not previously exist
innovation
the process of creating or improving products, technologies or ideas
Identify and explain one way a business could protect their product.
Patents, they provide a time period of many years in which the invention cannot be copied by anyone else (though this isn’t easy to obtain)
Copyright, is protection for industries which is automatically given for any original work (lasts 70 years after the entrepreneur’s death)
Trademark, a sign that distinguishes goods and services of one business to those of another
risk
something that may lead to failure to achieve the goals of the organisation
business failure
when a business ceases to trade, trade in a profitable way, or when a business makes a terrible desicion
What are the three main impacts of risks on business activity.
business failure, financial loss, lack of security
What are the three main impacts of rewards on business activity.
business success, profit, independance
Identify three risks when starting a business.
any three from:
financial loss
lack of security
IP issues
cyber attacks
economic problems
poor reputation
employment laws and regulations
change in tastes and trends
not managing cash flow
natural disasters
failure to plan for the future
staff training and safety
operational risks (e.g. equipment breaking down)
staff (e.g. reliability)
Identify three rewards when starting a business.
any three from:
profit
independence
freedom to take holidays
great sense of satisfaction
flexibility
ability to work form home
you learn a lot about business
better work-life balance
family legacy
business reward
a benefit the business brings to the owner
What are the roles of business enterprise and the purposes of business activity? (3 points)
produce goods or services
meet customer needs
add value
Identify and explain the four things needed to produce goods and services/the factors of production. (4 points)
land - somewhere to produce the goods (e.g. a farm)
labour - people to work in the business (e.g. farmers)
capital - money and equipment to get the business started
enterprise - the drive or motivation from the owners to start a business
Identify two basic/common expectations that customers have for most businesses in order for them to meet customer needs.
any two from:
fast, efficient and accurate service
high-quality products at a reasonable price
friendly and helpful service staff (to provide information and answer questions)
trained staff (that can handle questions without referring them on)
a clean shop or easy-to-navigate website
added value
the difference between what a business pays it’s suppliers and the price they’re able to charge for the product or service
Identify two ways that a business adds value to it’s product or service.
branding (a name, logo and/or slogan)
design (how it appears to customers)
USP (unique selling point)
quality (how well-made or well-excecuted it is)
convenience (to be available, easy to use and helpful)
How does branding add value to a product or service?
Brand awareness can encourage customers to pay more for a product if they trust the brand name that produces it.
How does convenience add value to a product or service?
Saving customers time by making a product easier to use will result in customers being willing to pay more.
How does design add value to a product or service?
The features that a product has or the way that it is presented can add value.
How does having a USP add value to a product or service?
A unique selling point is something that makes a good or service stand out from the competition and makes it more attractive to customers.
How does quality add value to a product or service?
Customers are usually prepared to pay more for higher-quality products.
market share
the proportion of total sales in a market made by a business
What are the three main roles to entrepreneurship?
organic resources
makes business decisions
takes risks
Describe organising resources.
An entrepreneur develops a business ideas and the hires and organises the factors of production to carry out the business activity.
Identify two resources entrepreneurs need to organise?
any two from:
raw materials
factory for production
workers/employees
marketing
finance
Identify two business an entrepreneur needs to make when starting a business.
any two from;
brand name
logo
core values of the business
where to get finance from
how to promote the product/service (advertisement)
how to price the product/service
where the business will be (location)
staff
what resources to use
where to get resources from (suppliers)
Explain the risk that money plays when an entrepreneur starts a new business.
Money has to be paid out in advance to buy materials, equipment and wages, but there is no guarantee that the final product/service will be sold. Additionally, they bear all the costs if the business fails (and they may not have left a secure job which means they wouldn’t be earning regular wages, meaning they couldn’t pay their personal bills).
How is an entrepreneur being their own boss a business reward.
They can make all the major decisions and they get a better work-life balance as they can decide when and where they want to work
When was the internet invented, and what impact did it have on businesses?
1990, businesses have found a more cost-efficient method of reaching customers online (E-commerce), small businesses are now able to sell products online on auction sites (e.g. eBay) and they can now use social media for advertisement and to find out what want/need.
Why are customers demanding more organic and free-from products?
customers are becoming more aware of their impact on the environment
Discuss the impact on a small business from adapting existing products to develop new business ideas. (4 marks)
Adapting existing products to develop new business ideas can have a significant impact on a small business. This is because, by identifying ways to improve existing products in a unique and innovative manner, the business can differentiate itself from competitors and attract customers with its enhanced features or functionalities. This can lead to increased sales and market share. Additionally, adapting existing products can also result in cost savings, as the business can leverage existing manufacturing processes and supply chains.
wants
products and services that consumers desire , which businesses try to fulfill
consumer tastes
trends that influence the popularity of goods and services
Identify the term : what technology does that creates oppertunities for businesses
changes
consumers
people who use the things that businesses create
competitive advantage
a business has competitive advantage over another when its products are deemed to be better than its competitors by customers
dynamic market
a rapidly changing business environment
M-commerce
any business transaction that takes place through a mobile device such as a mobile phone or tablet
Explain hoe social media has made an impact on businesses.
Social media platforms have allowed businesses and customers to interact in more ways, allowing businesses to create more personal relationships with their customers.
Social media offers a simple, cheap and effective way of creating brand awareness. For example, clothes retailers can obtain feedback on the latest fashions.
Businesses can also pay other businesses, celebrities or influencers to promote their brand or product by sharing photos of themselves wearing or using a product or service. This is often cheaper than traditional advertising and allows businesses to reach their target market more easily.
Social media platforms are widely used by businesses to attract new and retain existing customers. For example, travel agents often promote free holidays or competitions to those who share or like their page.
A smaller clothing brand might use social media as a method of cheap promotion when it is starting up.
product life cycle
refers to the sales of a product over time, from its launch and throughout its lifespan and decline.
(when a product reaches the end of its life cycle, it is often replaced by an updated version of the product or a totally different product)
adaption
the process of changing an existing product or service so that it is suitable for different customers
(less risky business option than launching a brand new product)
market research
involves gathering data about customers, competitors and market trends
Identify one way an entrepreneur can minimise risk.
any one from:
carrying out market research to find out what customers want
writing a business plan to identify potential problems
ensuring that there is sufficient money available
Identify one way an entrepreneurs may see success in their business.
any one from:
a growing business
a positive reputation
winning business awards
becoming a well-known business person
seeing their ideas become popular
equation : value added =
selling price − cost price
Note 
Flashcard (237)