business paper 1 revision Flashcards
what are the roles of entrepreneurs in a business?
.to organise resources
.take risks
.make business decisions
what are the 4 ways a business add value to its product?
.make a product convenient to use/get
.create a usp to differentiate its product from competitors
.improve the design and quality of the product
.build a good brand image
why might new business ideas come about?
.innovation in technology
.changes in customer needs e.g. (ethically minded customers) may want an environmental friendly product.
what are the risks in running a business?
.business failure
.debt from external sources of finance due to unlimited liability
.financial loss
.money time and effort gone to waste
what are the rewards in running a business?
. the business can make a lot of profit , so entrepreneur will make more money and quality of life will be better.
.will give the entrepreneur more independence to choose what they do day to day.
what is a market?
a place where buyers and sellers get together to buy and sell goods and services.
what is a dynamic market?
a market where customer needs keeps changing over time.
what is market share?
the proportion of total sales in a market that is controlled by the business.
what factors allow businesses to remain competitive?
.price
.range of products
.customer service
what is market research?
.studying the market to identify customer needs and finding the location of the target market to improve business performance by finding gaps in the market and reducing risks of business failure.
what is primary market research?
+ advantages and disadvantages
.first hand research that is carried out by the business to ask target market for their opinions on how the product offered by the business can be improved e.g. questionnaires or surveys
.advantages: data is up to date and is more accurate than secondary research
.disadvantages: expensive and time consuming
what is a focus group?
a small group of people from target market who discuss their attitudes towards a product and how it can be improved.
what is qualitative data?
data that involves opinions, it is hard to compare
what is quantitative data?
data that is number based, its anything that you can measure, it is easy to compare.
what is secondary market research?
+advantages and disadvantages
research which uses data that is already been collected, it involves looking at market research reports and the data is easily found in newspapers, the internet or in magazines.
advantages= cheap and data is easily found
disadvantages= data is often out of date and its not specifically about your products, so not reliable.
what is market segmentation?
+methods
market segmentation is when people within a market are divided into different groups.
methods of segmentation: demographics like age and income and other ways like location or lifestyle
what is market mapping?
a way for a business to see how customers perceive the key features of it’s competitors’ products like their pricing or quality strategies to find a gap in the market where they can excel.
what is the difference between an aim and a objective?
an aim is a long term goal, however an objective is a short term goal
what are the non financial aims in a business?
.personal challenge
.personal satisfaction
.independence and control
why do different businesses have different aims and objectives?
because of factors like the size and age of the business, who owns the business and the level of competition the business faces
what is the difference between price and cost?
cost is how much a firm pays for their stock, however price is the sum of money the consumer pays to the firm in exchange for a good or service
what is cash flow?
the amount of cash coming into the business
what is internal and external sources of finance?
+ examples
internal= finance acquired from inside the business e.g. from selling assets or retained profits
external= finance acquired from outside the business e.g. loans and venture capital=(selling shares)
