theme 1.1

Why do business ideas come about?

• Changes in technology in business

• Changes in what customers want

• Products and services becoming obsolete

How do business ideas come about?

• Original ideas

• Adapting existing products/ services/ ideas

What are the risks of business activity?

Business failure

Financial loss

Lack of security

What are the impacts of risks of business activity?

Business failure- a business not being successful may lead to it not being able to pay their debts and therefore must stop operating.

Financial loss- an entrepreneur can lose cash they’ve invested. Ideas may not work out or products may not sell, therefore losing the owner cash.

Lack of security- not knowing when customers are going to buy can leave business owners unsure of being able to pay for essentials in life.

What are the rewards of business activity?

Business success

Independence

Profit and wealth

What are the impacts of rewards of business activity?

Business success- a company can pay debts and break even. This generates repeat customers along with a positive brand image.

Independence- being alone and free to do what the entrepreneur wants to do with their business.

Profit and wealth- getting more cash out of a business than the owner put in. Generating cash which the owner can choose what to do with.

What are the roles of business enterprise and purpose of business activity?

To produce goods/services

To meet customer needs

To add value: convenience, branding, quality, design, USPs

What are the methods of adding value?

Features

Quality

Convenience to buy

Volume/size of product

Design

Advertising

USP

Branding

What is the role of entrepreneurship?

An entrepreneur: organises resources, makes business decisions, takes risks.

What are the four elements of the marketing mix?

Price

Product

Place

Promotion

Why is the business’ product an important aspect of the marketing mix?

The product needs to meet customer’s wants and needs.

Businesses can reach their target demographics by developing a USP to gain a competitive advantage against rivals.

Why is the price an important aspect of the marketing mix?

Businesses may set their price according to a customers will and ability to buy. The factors influencing a business’ price are:

Competition

Customer opinions

Brand

Availability

Why is the place an important aspect of the marketing mix?

Higher convenience for a customer may mean that a customer is more likely to buy a business’ product.

Why is the promotion an important aspect of the marketing mix?

The business needs to make customers and their target audience awareness of the brand.

Why is the marketing mix important?

The way a business utilises the marketing mix may help them to gain a competing advantage and set themselves apart from competitors