Business paper 1

• What is a business

  an organisation that aims to meet our needs and wants
• what are these needs and wants called

  goods and services
• what are goods

  tangible products we can touch e.g phone
• What are services

  things we buy to experience e.g cinema tickets
• what is meant by competitive environment

  the external environment in which a business operates and competes
• What is a direct competitor

  another business that provides a similar product
• what does a indirect competitor provide

  a different product that customers might choose
• why are market places evolving

  needs and wants of customers are changing overtime (aka dynamic environment )
• how has the internet evolved

  1)changed way companies operate

  2)makes some goods and services obsolete
• how does the internet evolving impact on businesses

  this means businesses have to adapt in the future to artificial intelligence and virtual reality
• what is opportunity cost

  loss of alternatives when one option is chosen
• what is an entrepreneur

  someone who is willing to take the risk of starting a business
• why do people become entrepreneurs

  because they have identified an opportunity cost meaning they have recognised the demand for a product or service
• Why do new ideas come about

  1)changes in technology

  2)changes in consumers desires and habits
• What is added value

  the difference between cost of making a product and the price it’s sold for
• what are the ways of increasing value

  1)convenience

  2)customer service

  3)respected brand name
• what is specialising

  focusing on a particular activity
• how does specialising help a business

  gives them a competitive advantage and haloes associate brands with products
• what are local business and example

  selling in a small community e.g corner shops
• what is meant by national level

  several business locations within the same country
• what do larger businesses benefit from

  economies of scale so can offer lower prices
• advantage of local businesses

  more aware of customer needs and can respond more quickly
• what are the different areas in a business

  finance

  manufacturing

  Human Resources
• enterprise 


  an opportunity to sell a product or service to others
• wha can an entrepreneur risk losing

  income by leaving their job to invest huge amount of time and money into new business
• a new business could lead to …

  1)possibility of low sales

  2)lack of interest in product

  3)entrepreneur can lose savings launching a business which could fail
• drawbacks of being entrepreneurs

  work such long hours which Can affect relationships with family,friends and health
• reward


  a financial objective ,as a business owner they can earn higher income (profit )
• examples of non financial objectives

  self determination

  control over their working hours

  own boss

  flexible hours

  personal interest
• for owners of a social enterprise rewards can come from helping the community e.g providing employment ,alleviating a social problem
• characteristics of an entrepreneur


  Confident

  highly driven,

  willing to take a risks

  huge amount of commitment and passion

  persuasive

  able to act on their own initiative

  organisational and planning skills

  resilient

  hard-working
• Why do entrepreneurs often start a business?

  Because they have spotted an opportunity and have recognised the demand for a product/service e.g gap in the market
• What is it called when a business develops an existing product?

  Innovation , they brunch out and start offering a wide range of products
• What must a business do to make profit?

  they must add value to its product. This is the difference between how much it cost to make to its selling price.
• what can governments offer to business?

  start-up loans up to £25,000 to applicants who successfully apply with a good business plan
• What do the majority of entrepreneurs go to?

  Commercial banks for capital loans to help their enterprise
• What is a purpose of markets research?

  Collect information that might help a business to become most successful and spot gaps in the market
• What are the aims of market re search

  To identify and understand needs of customers ;price quality choice and convenience
• Product


  Make sure the business is providing the right product at the right price in the right place at the right time
• How can businesses reduce the level of risk?

  Identifying the needs of customers