Theme 1 Flashcards
Dynamic nature of business
A business must understand how dynamic the market is that it is entering.
Obsolete
out of date/ not in use
E-commerce
Using the internet to carry out business transactions
M-commerce
using mobile technology to carry out business transactions
Types of reward
Profit, personal development, self-esteem, independent satisfaction
Ways to reduce risk
Plan, research, finance with care, calculated risks, keep costs down
Customer needs
A business needs to understand the needs and wants of customers in their target market segment.
Adding value
Adding value is the transformation process that describes what happens inside the business.
What is an enterprise ?
A business
Market research
The purpose is to gather information which will enable a business to be informed in its decisions and identify gaps in the market.
Primary research
Data collected first hand for a specific purpose.
Secondary research
Data that already exists and has been collected for a different purpose.
Qualitative data
expresses peoples opinions and cannot be shown on a graph
Quantitative data
Numerical data that can be expressed on a graph
Market segmentation
Involves dividing a market into parts that reflects different customer needs and wants.
Market mapping
Is the process to identify a gap in the market by looking at what competitors offer
Competitive environment
where a business operates in a market where there are other businesses producing the same or similar goods and services.
Revenue formula
Price x quantity
Total costs formula
Fixed costs + variable costs
Profit formula
Total revenue - total costs
Break even formula
(selling price per unit- variable costs)
Interest rates
Affect both the business and the consumers. They can represent a reward for savings or a cost for borrowing.
Unlimited liability
The owner is responsible for all debt.
Limited liability
The owner is only reliable for debt up to the amount they invested into the business.
