1.1 The role of bsuiness enterprise Flashcards
What does Business enterprise mean?
The entrepreneurial activity undertaken by entrepreneurs or businesses either by setting up or expanding a business.
What are the three main purposes of business activities?
- To produce goods and services
- To meet customer needs
- to add value
Outline how the purpose of producing goods and services affects standard of living.
The risk in the standard of living in many countries is due to the entrepreneurial activity and competition between companies.
The profit made is reinvested by businesses leading to further growth.
In this way, business enterprise has an important role to play in society by creating jobs and wealth.
Discuss the impacts on a business of failing to meet customer’s needs.
- A Business will not succeed if it does not understand customers and meet their needs.
- A positive relation allows a business to learn from customers by getting feedback and the business can use this information to improve existing products and services or develop new products.
- If customer need are met then they are more likely to buy again.
- They may recommend the business to formed and relatives.
What are some of the common customer needs?
- Fast delivery
- Reasonable, competitive prices
- Friendly and helpful customer service
- Prompt answers to their enquiries
- Snout stock in a chop so that they can buy a product there and then.
- A website that is easy to navigate and use.
What does adding value mean?
Added value is the increase in a product’s value as a result of a business producing that product.
How can value be added?
- Branding
- Convenience
- Quality and design
- Unique Selling Point
What impact does branding have on business or product?
- Defines the business, its aims and its values.
- Customers who can connect emotionally to a brand or feel that they share the same value and beliefs as a brand are more likely to buy that product.
- Branding can also create a customers loyalty. Customer loyalty is very important to businesses and can even protect a business that sells higher- priced goods when competitors offer promotional discounts to increase their market share.
How can convenience add value to a product or service?
- Providing great customer experience adds value by encouraging brand loyalty and preventing customers turning to rival companies.
- By making them easier to pay increases convenience and sales. Particularly true for online relatives by preventing the customer from entering their bank details each time.
- Being available- for example longer hours.
How does quality add value?
- Better quality= better customer experience= increase in sales.
How does design add value?
- A well designed product not only looks professional but it communicates the business’s value and can encourage consumers to buy from that brand.
- Products that look attractive= customers willing to pay higher prices.
- Perhaps unusual or innovative designs may be used to improve a product and attract consumer attention.
What does USP mean?
A USP is something unique that differentiates a product or service from its rivals and should be promoted in order to encourage consumers to buy that product or service.
What do potential USPS include?
- Price- cheapest product of that kind in the market.
- Quality- the best quality product in the market.
- being first to market
What qualities does an entrepreneur need?
- Able to organise resources
- Make business decisions
- Take risks.
- Motivate, lead and manage people
Describe the role of an entrepreneur.
- An entrepreneur need to organise the resources required to set up and run their new business.
- The raise enough money to start the business
- As the business grows and entrepreneur needs to think ahead of any risks and opportunities.
- An entrepreneur need to make a good decision on staff.
- They then need to motivate, lead and manage people.
