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Unit 1 - Business Studies GCSE > 1.1 - Spotting a business opportunity > Flashcards

1.1 - Spotting a business opportunity Flashcards

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1
Q

What is a business?

A

An organisation whose purpose is to produce goods and services to meet the needs of customers.

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2
Q

What are 5 questions to think about when setting up a business?

A
  1. Is there a business opportunity?
  2. How will the business be financed?
  3. What is required to get the business up and running?
  4. What legal aspects have to be considered?
  5. What products or services will be sold and to whom?
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3
Q

What are the 3 stages of a business supplying its products/services to their customers?

A
  1. SUPPLIERS - A business that sells (supplies) products to another business.
  2. PRODUCTION - Using raw materials, labour and machinery to make products.
  3. CUSTOMER: A business or organisation that buys the product or service.
    OR CONSUMER: The person that uses (consumes the product.
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4
Q

What is a ‘market’ ?

A

Where buyers and sellers meet to exchange goods and services.

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5
Q

What are 5 examples of Customer Needs?

A
  1. Good quality
  2. Good product range
  3. Convenient location
  4. Good customer service
  5. A fair price
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6
Q

What is the problem about meeting customer needs?

A

All customers are different and need different things.

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7
Q

What are 6 things that market research can tell a business?

A
  1. What features customers want
  2. How much they are willing to pay
  3. Where they shop
  4. What age and gender they are
  5. Who the main competitors are
  6. If the market is growing or shrinking
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8
Q

What are the two types of research? What is the difference?

A
  1. PRIMARY RESEARCH - Collecting data that did not exist before (e.g. by asking questions).
  2. SECONDARY RESEARCH - collecting data that already exists (e.g. Internet research).
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9
Q

What are 5 examples of Primary Research?

A
  1. Surveys
  2. Focus Groups
  3. Observations
  4. Questionnaires
  5. Experiments
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10
Q

What are 6 examples of Secondary Research?

A
  1. Sales data
  2. Internet sites
  3. Local newspaper
  4. Telephone directories
  5. Market reports
  6. Government statistics
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11
Q

What are 5 advantages of Primary Research?

A
  1. More accurate
  2. Up to date.
  3. Specific to needs
  4. Effective at collecting qualitative data
  5. Direct customer contact.
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12
Q

What are 3 advantages of Secondary Research?

A
  1. More general
  2. Less time-consuming
  3. Effective at collecting quantitative data.
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13
Q

What are the 2 types of data? What is the difference?

A
  1. QUALITATIVE DATA - information about opinions, judgements and attitudes.
  2. QUANTITATIVE DATA - data that can be expressed as numbers and statistically analysed.
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14
Q

When interpreting data, what must business look for?

A

Issues to identify the potential size of the market, trends in the market and an indication of what customers want.

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15
Q

What is Market Mapping?

A

Identifying market segments and position their products through identifying gaps in the market.

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16
Q

How can a business analyse customer buying habits?

A
  1. Finding information about customers
  2. Using their own experience
  3. Looking at existing businesses and trying competitors’ products
  4. Observation and surveys
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17
Q

What is a Market Segment?

A

A group of buyers with similar characteristics and buying habits.

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18
Q

What are 5 examples of market segments?

A
  1. Age
  2. Gender
  3. Income
  4. Lifestyle
  5. Life-stage
19
Q

What does Market segmentation allow a business to do?

A
  1. Meet specific customer needs
  2. Differentiate their products
  3. Focus on a specific group of customers.
  4. Target marketing activity
  5. Develop a unique brand
  6. Build close customer relationships.
20
Q

What can a Market Mapping diagram be used for?

A

To position and compare products in a market, and identify opportunities where customer needs are not being met.

21
Q

Why might a business consider the competition?

A

To differentiate from the others.

22
Q

What are 7 ways to compete against other businesses?

A
  1. Wider product range
  2. Better after-sales service
  3. Stronger brand image
  4. Better product features
  5. Higher quality
  6. Better design
  7. More enjoyable experience
23
Q

What is a brand?

A

A named product that customers see as being different from other products, and that they can associate or identify with.

24
Q

Instead of competing head-to-head, what can businesses try to do?

A

DIFFERENTIATE their products.

25
Q

What is Added Value?

A

The increased worth that a business creates for a product.

26
Q

What is Added Value the difference between?

A

What a business pays its suppliers and the price that it is able to charge for the product.

27
Q

What are the 2 basic ways a business can add value to its product?

A
  1. By lowering costs

2. Adding something that will make customers willing to pay a higher price

28
Q

What are 6 MAIN ways of adding value?

A
  1. Unique Selling Point (USP)
  2. Better design
  3. Improved quality
  4. Branding
  5. Greater speed of service
  6. More convenience
29
Q

What does the added value of a product go towards?

A

Paying off a company’s costs.

30
Q

The HIGHER the added value, the….?

A

the SOONER costs can be paid off and the quicker a business will make a profit.

31
Q

The MORE value a business can add to its products, the…?

A

The MORE chance the business has of success, survival and long-term growth.

32
Q

How can a USP help, other than adding value?

A

It can help a business compete.

33
Q

How can developing a USP be aided?

A

Through understanding customer needs and market mapping.

34
Q

What do most products do to add value and improve competitiveness?

A

They COMBINE a RANGE of features.

35
Q

The most successful products are the ones that…?

A

…are able to keep costs down as they add new features or benefits.

36
Q

What is a franchise?

A

The right given by one business to other businesses to sell goods or services using its name.

The businesses that buy into a franchise remain as independent businesses.

37
Q

What is a franchisor?

A

The business that gives franchisees the RIGHT TO SELL its product or service.

38
Q

What is a franchisee?

A

A business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor.

39
Q

What is the principle behind a franchise?

A

The expansion of an established business through licensing the right for ENTREPRENEURS to set up their own business using the name, equipment and products of the franchise in return for a fee or share of the sales revenue.

40
Q

What are 8 advantages of franchising?

A
  1. An established brand name/customer base.
  2. Training
  3. Equipment
  4. Ongoing support
  5. Access to goods and services.
  6. Advertising and promotion covered by the franchise.
  7. Operate in an exclusive area.
  8. Higher chance of survival
41
Q

What are 5 drawbacks of a franchise?

A
  1. Start-up costs can be expensive.
  2. Royalty payments
  3. Complicated application process
  4. Lack of autonomy and control
  5. Limited flexibility to make your own decisions.
42
Q

What are 2 examples of businesses that prioritise location?

A
  1. Retail shop

2. Restaurant

43
Q

What are 4 factors in choosing a location?

A
  1. Busy (passing trade)
  2. Access (parking, etc.)
  3. Cost
  4. Proximity to competition

Unit 1 - Business Studies GCSE (5 decks)

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