Business Paper 1

• Theme 1.1: Definition of business enterprise?


  The process of identifying new business opportunities and taking advantage of them
• Theme 1.1: Definition of product?

  A good or service provided by a business
• Theme 1.1: Definition of Good?

  A physical item e.g a book
• Theme 1.1: Definition of a service?

  An action performed by other people to aid the customer e.g hairdressing
• Theme 1.1: What are the purposes of business activity?

  To provide a good or a service, to meet customer needs, to add value to an existing product
• Theme 1.1: How do you add value to an existing product? What ways?

  1. Make a product more convenient for customers

  2. building a good brand image

  3. improving the products design or quality

  4. giving the product USP
• Theme 1.1: What is a unique selling point (USP)


  A feature that makes it different from its competitors
• Theme 1.1: What are reasons for new business ideas?

  1. Changes in technology

  2. Changes in what customers want

  3. Products becoming obsolete
• Theme 1.1: How would changes in technology lead to new business ideas?


  Provide products or services for new technology e.g creating apps for smartphones or tablets
• Theme 1.1: How do changes in customer needs lead to new business ideas?

  Customers/ people want what's trending ect. for example people wanting products that are environmentally friendly or gluten free products
• Theme 1.1: How do products becoming obsolete lead to new business ideas?

  Firms may end up needing new products to replace obsolete ones e.g typewriters became obsolete when personal computers became available
• Theme 1.1: what can new business ideas be in terms of inspiration?

  New business ideas can either be original, or adaptions of existing products or ideas
• Theme 1.1: What is an entrepreneur?

  Someone who takes on the risks of enterprise activity
• Theme 1.1: what three things must an entrepreneur be able to do?

  1. organise resources

  2. take risks

  3. make business decisions
• Theme 1.1: What does it mean when an entrepreneur needs to be able to organise resources?


  They can make sure the business has the right resources at the right time e.g enough for production
• Theme 1.1: What does it mean an entrepreneur must be able to take risks?


  they must be able to make risks in order for not guaranteed success e.g investing money to start a business that may not be successful
• Theme 1.1: what does it mean an entrepreneur must be able to make business decisions?


  They must be good at deciding the business aims, its structure, who to employ, how to grow and what do if things go wrong - a strong leader who will take initiative
• Theme 1.1: What are three risks for entrepreneurs?

  1. Financial loss

  2. Little job security

  3. Failure
• Theme 1.1: How does financial loss happen and how is it a risk for an entrepreneur?

  If the business doesn't make enough profit, they may lose money they invested and might struggle to pay back money they have borrowed
• Theme 1.1: Why is little job security a risk for an entrepreneur and why might it happen?

  They might have quit their previous job to start the business however if the business fails hey could lose money and become unemployed
• Theme 1.1: How is a failure a risk for an entrepreneur?


  If the business fails, they might have wasted the time, money and effort (that they could have used for other things)
• Theme 1.1: what are the three rewards for entrepreneurs?

  1. success

  2. profit

  3.independence
• Theme 1.1: why is success a reward for entrepreneurs?

  Many entrepreneurs get great satisfaction from seeing their ideas be successful
• Theme 1.1: Why is profit a reward for entrepreneurs?

  They make more money than in their previous job if the business makes a lot of profit
• Theme 1.1: why is independence a reward for entrepreneurs?

  They can choose what they do each day, and what direction the business goes in, so TOTAL CREATIVE FREEDOM
• Theme 1.2: Definition of competitor?

  A business that sells the same products in the same market as another business
• Theme 1.2: Why do businesses need to be able to understand customers?

  So they can meet their customers needs and and increase sales and ensure the business survives
• Theme 1.2: What do businesses compete with others for?

  To fill customers needs so they must persuade customers to buy from them instead of their competitors
• Theme 1.2: How do businesses identify how to stand out within the market they are in?

  Businesses look at the strengths and weaknesses of competitors in different areas to help them decide how to stand out
• Theme 1.2: In what ways can businesses adapt their company to compete?

  1. Pricing

  2. Customer service

  3. Quality

  4. Product range

  5. Location
• Theme 1.2: What customers want in terms of pricing and how can firms use that to compete?

  Customers want to pay less for products (generally), so firms can reduce their prices to compete with similar products
• Theme 1.2: What is a disadvantage of a business reducing their prices in order to compete with others?

  They make less profit per product
• Theme 1.2: What do customers want in terms of customer service and how can firms use that to compete?

  Customers want good customer service, so firms can train their staff to give good service or provide extra services to stand out against competitors
• Theme 1.2: Why do customers want good customer service and what does this result in?

  They are more likely to feel welcome and appreciated so are more likely to use the firms and spend more for the good service
• Theme 1.2: What do customers want in terms of quality and how can firms use that to compete?

  Customers want good quality products, so firms can improve and emphasise quality of products
• Theme 1.2: What is a disadvantage to a business increasing their quality to compete with others?

  increasing quality can increase the costs for the business
• Theme 1.2: What do customers want in terms of product range and how can firms use that to compete?

  Customers want a wider range to choose from, so firms can develop new products to fill gaps in the product range
• Theme 1.2: Why do customers want a larger range of products to choose from?

  So they can find the product that suits them the best
• Theme 1.2: How can developing new products to increase range also be beneficial for firms?

  A newly developed product will have less competition so they will appear innovative
• Theme 1.2: What do customers want in terms of location and how can firms use that to compete?

  Customers prefer not having to travel far or wait a long time for their products so a firm can open new stores or sell online to be convenient/ accessible