1.1.1 the dynamic nature of business

Question 1

What is a product?

Answer 1

A product is anything that is capable of satisfying customer needs

Question 2

What is a service?

Answer 2

A service is an act that a business person carries out for you in exchange for money

Question 3

Changes in technology: Amazon

Answer 3

Since the invention of the Internet in 1990 businesses have found a new cheaper way to reach the consumer, by selling online. This is called e-commerce.

Question 4

Changes in technology: eBay

Answer 4

Small businesses are now able to set up and sell virtually anything online due to websites such as eBay, etsy and ebid

Question 5

Changes in technology: Stadia

Answer 5

New technology innovation means there are lots of new products on the gaming market

Question 6

Changes in technology: robotics

Answer 6

Advancements in robotics will mean dozens of new products in the future. Can you think of any task in your day that could be completed by a robot?

Question 7

Wants and needs: Social media

Answer 7

Businesses can use social media to find out what consumers want and need so that they can produce products and services to meet those wants and needs

Question 8

Wants and needs: ready meals

Answer 8

We are all working more and have less time, so the ready meal market is catering to these consumer needs

Question 9

Wants and needs: “Free from” foods

Answer 9

Consumers are also demanding organic, free range, sustainable, eco friendly products as we become more aware of our impact on the environment

Question 10

Change in tastes and trends

Answer 10

Consumer tastes change over time which means that a business is at risk if they don’t keep up with current trends.

Question 11

Definition: Obsolete

Answer 11

Obsolete means a product that is no longer used or out of date

For example we can make a product obsolete by replacing it with something better

Question 12

Obsolete services

Answer 12

Some services are no longer required because of changes in technology or new inventions

Question 13

Definition: Original ideas

Answer 13

Original ideas are ones that have not been used before to put a product or service into production e.g. pet hotels

This may be to solve problems
It may be because an entrepreneur has a passion or interest
A gap in the market may have been spotted
A business may have carried out some research into the wants and needs of shoppers and be creating products to meet those needs

Question 14

Original ideas – solve problems

Answer 14

This is Art Fry – he invented the post-it note by accident
Originally it was called the press and peel
It was yellow as he had yellow paper to hand
He invented it to keep the page open in his hymn book

Question 15

Original ideas – gap in the market

Answer 15

A successful business will be one that spots an opportunity to make a profit
This could be an idea that no-one has thought of before – for example Trunki luggage
The opportunity could be where there are lots of businesses already making a healthy profit
The entrepreneur may also spot an opportunity to trade and also make a difference to society – this is called a social enterprise

Question 16

Original ideas – carried out research

Answer 16

Vet Joe Inglis and 7 friends realised that there were 8.5 million dogs in the UK and 4 out of 5 owners treat the pet as one of the family and want the best food possible
They created a niche business which makes tailored food to the dog’s age, breed or medical condition and is delivered to their door
Now TAILS.COM have 40,000 UK customers

Question 17

Adapting existing ideas

Answer 17

A business could create a new product by:

Mix and match
New version of an old product
Cheaper version of an old product