1.1 Enterprise and Entrepreneurship Flashcards
why do new business ideas come about?
- changes in consumer trends
- advancements in technology
- products becoming obsolete
Who is an entrepreneur?
someone who starts business, takes risks hoping to make profit.
How do changes in technology provide business opportunities?
- previously expensive technology becomes more affordable
- e-commerce and m-commerce, allows businesses to payments online without having to create payment platforms
- business ideas are taken straight to the marketplace
How do businesses benefit from the use of social media?
- inexpensive way of promotion
- access to customers globally
- reduce marketing workload and the need for marketing staff
- customer feedback
how do consumer trends affect businesses?
- business has to come up with strategies to retain customers ie increase marketing
- allows businesses to come up with new ideas
Reason why a business might adapt one of its existing product?
- to make the product suitable for different customers/markets, eg cultural differences.
- increase in number of customers
- higher sales.
- could reduce development costs
Benefit to a business of coming up with original ideas?
- unique ideas fill a gap in the market
- USP
- innovative designs attract customers
- differentiates from competitors
- increased customers
What risks do entrepreneurs take when starting up a business?
- Risk of business failure e.g cash flow problems, unexpected drop in sales, external factors such as recession, or suppliers.
- Risk of Financial Loss ie competitive risks-> lack of investment.
- Lack of security: eg borrowing money or loans,financial insecurity-> debts.
What can businesses do to minimise risks?
- evidence such as market research can help take calculated risks, can help business make decisions
- produce a business plan
- raise sufficient start up finance
What rewards do entrepreneurs seek?
- Business success-> independence-> reputation->market value.
- Independence-> making own decisions-> less at stake.
- Profit-> financial security
3 purposes of business activity?
- produce goods and services
- meet customer needs
- add value
Discuss the advantages of meeting customer needs and disadvantages of not meeting customer needs?
ADS:
- positive relationship->gain customer feedback-> business can use info to improve products.
- competitive advantage
- High customer satisfaction-> repeated purchases-> loyal customers
- keeps them aware of any changes in consumer needs
DIS:
- drop in sales-> less revenue-> business fails-> damaged reputation.
- unused stock->waste of money
- lower net profit
Ways of adding value to a product and benefits.
BRANDING
- how a business defines itself
- customers become emotionally attached to a brand->repeated purchases->customer loyalty
- increase market share
- differentiate from competitors
INCREASING CONVENIENCE
- accessible customer service
- easy to pay for
- increasing number of hours->availability -> locals are attracted.
QUALITY AND DESIGN
-allows customers to depend on the brand->long term relationship.
- communicate’s business values
USP- differentiating from competitors
- reputation for quality
-being first to market brings authenticity.
Discuss the roles of an entrepreneur?
Organising resources= finance ie taking loans, saving capital for other resources ie equipment
gaining staff, motivating staff.
Making decisions-> responsibility -> vision to success.
Solving problems->customer satisfaction
Taking calculated and minimised risks.
Discuss the importance of adding value.
- money goes towards paying off fixed costs, quicker profit –> sustained survival
- ->helps businesses compete through USPs
