the role of business enterprise

• the purpose of business activity

  • The purpose of business activity can be broadly defined as the activities that businesses engage in to produce goods or services that meet customer needs while adding value
• produce goods or services

  • The primary purpose of business activity is to produce goods or services that satisfy a need or demand in the market
  • Goods are physical products, such as bicycles and T-shirts
  • Services are non-physical items such as hairdressing, tourism and manicures
• meet customer needs

  • The ultimate goal is to create products that meet the needs and preferences of customers and provide value to them
  • By meeting customer needs, businesses can build customer loyalty, increase brand awareness, and generate revenue 
• add value

  • The third purpose of business activity is to add value to products or services 
  • Value-added features can differentiate products from competitors, create a unique selling point, and increase customer satisfaction
  • E.g. a product that is easier to use, has a better design, or is of higher quality than competitors can create a competitive advantage for a business
• methods of adding value to products and services

  • Adding value is the difference between the price that is charged to the customer and the cost of inputs required to create the product or service
  • E.g. customers are prepared to pay more for potatoes when they are packaged as oven chips than they would be willing to pay for a bag of potatoes
• ways businesses add value

  • convenience
  • branding
  • design
  • quality
  • USP'S
• Examples of how businesses can add value (branding)

  • Apple has built a brand that many customers believe is superior to other brands
  • They have achieved this through the use of quality materials, innovative design and good marketing
  • This branding allows the firm to charge a higher price for its products thus increasing the added value
• Examples of how businesses can add value (convenience)

  • Persil initially provided a bottle of dishwashing liquid for dishwashing machine use
  • This resulted in spillage as customers added the liquid to their machines, so Persil then created tablets
  • The tablets offered a much more convenient option and Persil was able to charge a higher selling price for them
• Examples of how businesses can add value (quality)

  • Jo Malone perfume products are well known for their beautiful packaging which creates an exciting opening experience for the customer
  • This allows the firm to charge a higher price for its products thus increasing the added value
• Examples of how businesses can add value (USP'S)

  • MoonPig birthday cards can be completely customised (size, colour, design etc.) and the level of customisation has helped them to gain a competitive advantage
  • This customisation allows the firm to charge a higher price for its cards thus increasing the added value
• Examples of how businesses can add value (design)

  • Samsung Galaxy Watch 5 has robust health tracking tools built into it, along with an amazing screen, which has helped it to gain a competitive advantage
  • These features allow the firm to charge a higher price for its products thus increasing the added value
• The role of entrepreneurship

  • An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success
  • Successful entrepreneurs can identify and pursue opportunities, create value for customers and build thriving businesses
  • Entrepreneurs display three main characteristics
• Entrepreneurs display 3 main characteristics (organisation)

  • An entrepreneur must be able to gather and coordinate the resources necessary to start and operate a business
  • E.g. When Michael Dell started his computer company from his garage, he had to organise resources such as space, computers, software tools, and employees, and manage the finances
• Entrepreneurs display 3 main characteristics (making business decisions)

  • Entrepreneurs must be able to make decisions that will determine the success or failure of their business
  • E.g. A restaurant owner may need to decide what type of food to serve, where to locate the restaurant, and what prices to charge. These decisions require a combination of market research, creativity, and business skill
  • Making the wrong decisions can lead to wasted resources, lost opportunities, and ultimately business failure
• Entrepreneurs display 3 main characteristics (take risks)

  • Entrepreneurship involves taking risks - financial, personal, or professional
  • E.g. An entrepreneur may invest their life savings into a new venture or quit a secure job to start their own business
  • They may also take risks by introducing new products or entering new markets
  • These risks can pay off with great rewards, but they can also lead to failure and financial loss
  • As a business grows an entrepreneur may make the decision to employ staff to help with its day to day operations
  • The entrepreneur may take on the role of mentor, supporting new staff members to carry out their tasks in a particular way