business paper 1 revision

Question 1

what are the roles of entrepreneurs in a business?

Answer 1

.to organise resources
.take risks
.make business decisions

Question 2

what are the 4 ways a business add value to its product?

Answer 2

.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

Question 3

why might new business ideas come about?

Answer 3

.innovation in technology
.changes in customer needs e.g. (ethically minded customers) may want an environmental friendly product.

Question 4

what are the risks in running a business?

Answer 4

.business failure
.debt from external sources of finance due to unlimited liability
.financial loss
.money time and effort gone to waste

Question 5

what are the rewards in running a business?

Answer 5

. 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.

Question 6

what is a market?

Answer 6

a place where buyers and sellers get together to buy and sell goods and services.

Question 7

what is a dynamic market?

Answer 7

a market where customer needs keeps changing over time.

Question 8

what is market share?

Answer 8

the proportion of total sales in a market that is controlled by the business.

Question 9

what factors allow businesses to remain competitive?

Answer 9

.price
.range of products
.customer service

Question 10

what is market research?

Answer 10

.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.

Question 11

what is primary market research?
+ advantages and disadvantages

Answer 11

.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

Question 12

what is a focus group?

Answer 12

a small group of people from target market who discuss their attitudes towards a product and how it can be improved.

Question 13

what is qualitative data?

Answer 13

data that involves opinions, it is hard to compare

Question 14

what is quantitative data?

Answer 14

data that is number based, its anything that you can measure, it is easy to compare.

Question 15

what is secondary market research?
+advantages and disadvantages

Answer 15

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.

Question 16

what is market segmentation?
+methods

Answer 16

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

Question 17

what is market mapping?

Answer 17

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.

Question 18

what is the difference between an aim and a objective?

Answer 18

an aim is a long term goal, however an objective is a short term goal

Question 19

what are the non financial aims in a business?

Answer 19

.personal challenge
.personal satisfaction
.independence and control

Question 20

why do different businesses have different aims and objectives?

Answer 20

because of factors like the size and age of the business, who owns the business and the level of competition the business faces

Question 21

what is the difference between price and cost?

Answer 21

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

Question 22

what is cash flow?

Answer 22

the amount of cash coming into the business

Question 23

what is internal and external sources of finance?
+ examples

Answer 23

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)