BUSINESS Theme 1 Topics 1.1 - 1.2

enterprise

activity of organising resources and taking risks to produce goods or services

entrepreneur

person who organises resources makes business decisions and takes risks to start and run a business

business idea

concept for a product or service that a business could sell

dynamic nature of business

how businesses change in response to changing customer needs, technology and competition

changing customer needs

changes in what customers want that encourage businesses to adapt

technology

tools and systems that help businesses develop products improve processes or reach customers

risk

possibility of business failure, financial loss or lower-than-expected profit

reward

benefit of business success e.g. profit, independence or personal satisfaction

profit

money left after total costs are subtracted from total revenue

business opportunity

possibility of meeting customer needs by selling a product or service

customer needs

what customers want or require from a product or service including price, quality choice and convenience

price

amount customers pay for a product or service

quality

how well a product or service meets required standards and customer expectations

choice

availability of different products or options for customers

convenience

how easy and quick it is for customers to access or buy a product

customer satisfaction

extent to which a product or service meets customer expectations

state two ways in which new business ideas can be developed

-adapting an existing product, service or idea

-coming up with original ideas

brand loyalty

when customers repeatedly buy from the same business or brand

sales

quantity of products or services sold by a business

business survival

ability of a business to continue operating over time

market research

collection + analysis of information about customers + markets to inform business decisions

purpose of market research

identify customer needs find gaps in the market reduce risk and inform business decisions

primary research

firsthand collection of new data directly from original sources for a specific business purpose

survey

method of collecting information by asking people questions

questionnaire

set of written or digital questions used to collect responses

focus group

small group discussion used to gather opinions about a product or idea

observation

watching customer behaviour to collect research data

secondary research

use of existing data that has already been collected by other people or organisations

internet research

using online sources to find existing information about a market or customers

market report

document containing information and analysis about a particular market

government report

publication containing data or research produced by a government body

quantitative data

numerical information that can be measured counted or analysed statistically

qualitative data

descriptive information about opinions preferences and reasons

social media research

using social platforms to gather customer feedback opinions and preferences

reliability of research

extent to which research data is accurate consistent and trustworthy

sample size

number of people who take part in market research

representative sample

group of respondents that reflects the wider target market

bias

tendency for research methods or responses to unfairly influence the results

market research cost

money spent collecting and analysing information about a market

accurate data

information that correctly reflects the situation being researched

risks faced at the start of a business

- business risk--> may fail due to lack of customer attraction for products/services or competitors outperform them--> reduced cash flow 

- financial risk--> business may lose money invested in setting up or insufficient revenue or lack of cash flow--> unable to cover costs

- lack of demand--> unsold stock + low sales--> costs exceed revenue--> loss

- competition--> established businesses already have brand loyalty--> new business may need to lower prices or advertise more--> reduced profit