1.1 The dynamic nature of business

Question 1

How does new business ideas come about?

Answer 1

1. Advances in technology, such as the introduction of fast and reliable broadband internet,
2. Changes in what consumers want, such as increased interest in gluten free products.
3. Products and services becoming obsolete, such as VHS videotapes.

Question 2

How can changes in technology provide business opportunities?

Answer 2

1. Making expensive technology affordable
2. e-commerce and mobile commerce
3. Social media

Question 3

What is e-commerce?

Answer 3

E-Commerce us any business transaction that takes place using the internet.

Question 4

How has e-commerce benefited businesses?

Answer 4

1. Can increase trade all over the world.
2. Allows businesses to take online payments without having to create their own payment platform.
3. Entrepreneurs do not have to rent physical premises before they can begin trading.

Question 5

What has an E-commerce allows business to do?

Answer 5

Sell to different countries and customers in a much wider scale.

Question 6

What is M-commerce?

Answer 6

Any business transaction that takes place through a mobile device such as a mobile phone or tablet.

Question 7

What can M-commerce help Businesses to do?

Answer 7

Transactions can take place when consumers access the business’s website through mobile technology.

Question 8

When a customer’s wants or needs are not yet being fulfilled by a business.

Answer 8

Gap in the market.

Question 9

What is a dynamic market?

Answer 9

A rapidly changing business environment.

Question 10

How can Businesses ideas come about?

Answer 10

1. Changes in technology

2. Changes in what consumers want

Question 11

How has social media platforms benefitted businesses ?

Answer 11

1. A more personal relationship with their customers.
2. Can also be used to reduce the work involved in marketing.
3. Advertising is easier for small businesses

Question 12

What are social media platforms widely used for?

Answer 12

Businesses to attract new and retain existing customers, for example, travel agents often promote free holidays or competitions to those who share or like their page.

A smaller clothing brand might use social media as a method of cheap promotion when it is starting up.

Question 13

What is Demographics?

Answer 13

Demographics are the different characteristics that make up a population or a business’ customer base.

These include characteristics such as aged gender, disability, nationality, religion, ethnicity and income levels.

Question 14

What can changes in demographics cause?

Answer 14

Can impact upon consumer wants, for example an ageing population might create new opportunities for businesses that target older consumers.

Question 15

What other factors effect what consumers want?

Answer 15

1. Changes in lifestyle and technology have an impact on what consumers want.
2. Entrepreneurs respond and provide for this through their products and services
3. For example fast-food ordering and delivery.

Question 16

What does obsolete mean? What causes it?

Answer 16

Obsolete means out of date

This can occur due to
1. changes in technology,

2. Changes in consumer needs

Question 17

What are one of the main reasons why products become out dated?

Answer 17

technological advancement.

As technology develops, products can become obsolete.

For example, cash transactions are being used less as the use of car and contactless payments increases.

Cars are being updated as petroleum and Diesel engines are.

Question 18

What does invention mean?

Answer 18

Invention means creating something that did not previously exist.

Question 19

What does innovation mean?

Answer 19

Innovation is the successful commercialisation of an invention or the adaptation of a product over time its features.

It involves changing existing processes or creating new more effective processes, product and ideas.

Question 20

Give example of innovation

Answer 20

An example of an innovation would be the traditional light source of the candle.

Has been replaced several times over the years, such as ultra efficient, low-energy LED Bulbs

Question 21

What does adaptation mean

Answer 21

Adaptation is the process of changing an existing product or service so that it is suitable for different customers.

This can often be seen as a less risky business option than launching a brand new product.

Question 22

State some types of adaptations:

Answer 22

1. Changing a product’s brand name, packaging or logo to keep it up to date,
2. Subtle changes to a brand name or to the packaging of a product might be all it takes to boost sales.
3. Changing the format of a product for example a cereal manufacturer night start selling cereal snack bars
4. Adapting the strategies used for promotion and advertising of goods and services. This might be achieved through special offers, discounts codes or changing advertising to focus on social media.
5. Adapting products with innovation. For example the sausage roll has been adapted to suit vegan customers.
6. Responding to new fashions, for example by offering different coloured products.

Question 23

How can new business ideas come about?

Answer 23

1. Adapt an existing product or service to keep up with changes in consumer trends.
2. Create a completely original product or service to satisfy a new previously unknown customers trend.

Question 24

Explain some reasons why a business might adapt one of its existing products?

Answer 24

A business may want to adapt an existing product to keep up with changes in consumer trends. For example, restraunts may change its menu to make it more suitable for vegan customers. This allows their business to increase sales and stay in business with changing consumer trends.

Question 25

What has encouraged the challenge for original ideas?

Answer 25

Changes in technology due to the development of new customer products.

Question 26

Describe a reason why a business might decide to change a brand name.

Answer 26

Due to bad reputation, a business may decide to change their brand name to suit a new product potentially increasing sales without customers being deterred by the previous brand name that may have a bad reputation.

Question 27

Why might a fast flow restaurant offer different products in different countries?

Answer 27

1. Cultural differences.
2. Dietary Needs
3. Population differences.
4. Location