1.1 Enterprise And Entrepreneurship Flashcards
Why do businesses change and adapt ideas
changes in technology
changes in what consumers want
products and services becoming obsolete
new and original ideas
adapting existing products, services and ideas
What is m commerce
M-commerce is any business transaction that takes place through a mobile device such as a mobile phone or tablet. Businesses try to increase the use of m-commerce by developing their own mobile apps to sell goods and services
Demographics
Demographics are the different characteristics that make up a population, or a business’ customer base. These include characteristics such as age, gender, disability, nationality, religion, ethnicity and income levels. Businesses use demographics to help them decide on the
target market for a product or service they want to offer
Obsolete products
Obsolete means ‘out of date’. As products become obsolete, new products replace them
Innovation
Innovation is the successful commercialisation
of an invention, or the adaptation of a product over time to improve its features. It involves changing existing processes or creating new, more effective processes, products and ideas.
Types of adaptation
Changing a product’s brand name, packaging or logo to keep it up to date
Changing the format of a product, for example, a cereal manufacturer might start selling cereal snack bars. Altering the colour or style of a product in response to new fashions and trends in the market.
Adapting the strategies used for promotion
and advertising of goods and services.
Some products can be adapted with new
innovations.
Risks of starting a business
financial loss
If the business is not profitable then the entrepreneur, and any lenders, risk losing the money.
lack of security
Setting up and running a business takes time and energy. Entrepreneurs often have to give up their existing job to pursue their business idea, along with the security of a regular
income
business failure
A big risk that a business faces is the failure to make enough money to survive and being forced to close. This usually happens due to poor revenue
which can be caused by:
a lack of market research to find out what customers want
running out of raw materials
poor management, with not enough thought given to the consequences of decisions on how to manage the business
Minimising risk of business failure
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
Rewards of starting a business
profit
Making money is the driving force behind many business start-ups. This is because profits can be put back into the business, to help it survive and grow.
business success
Success in business can mean various things. For many entrepreneurs, seeing their ideas become popular is sufficient reward. Other entrepreneurs may see success in the form of:
a growing business
a positive reputation
winning business awards
becoming a well-known business person
independence
Some entrepreneurs choose to set up their own business because they want to do something that interests them.
Organising resources
Land - Naturally occurring resources, such as land and water. A gym will need land for a physical building.
Labour - Human effort, skills and knowledge. A gym will need staff who can offer advice on health and fitness.
Capital - Equipment and money used to provide goods and services. A gym will need fitness equipment and money to pay staff.
Enterprise - The willingness to take risks, make decisions and organise resources. All of these will be needed to open the gym
Convenience
Saving customers time by making a product easier to use will result in customers being willing to pay more
Branding
Brand awareness can encourage customers to pay more for a product if they trust the brand name that produces it
Quality
Customers are usually prepared to pay more for higher-quality products
Design
The features that a product has or the way that it is presented can add value
Unique selling point
A unique selling point is something that makes a good or service stand out from the competition and makes it more attractive to customers
