Business

• Business


  An organisation that provides consumers with goods and services to meet their needs and wants
• This week's objectives


  • Products vs Services
  • Customers needs vs customers wants
  • Adding value
• Purpose of a business activity

  To provide consumers with goods and services that meet their needs and wants
• Need


  A good or service which is essential to living
• Want


  A good or service which people would like, but is not essential for living
• Why do we pay more for bottled water than for tap water?
• Adding value


  A business should always charge more for a product than it cost them to make, to allow them to make a profit
• Adding value example


  • Initial cost: 45,000€
  • Improvement cost: 205,000€
  • Total revenue: 350,000€
  • Value added: 350,000 - (45,000 + 205,000) = 100,000€
• A newly built house sells for €100,000. Value of costs in bricks, wood and other material: €200,000. Calculate the added value
• Why is value added important?


  It can pay other costs (wages, management, electricity, advertising...) and it can make a profit (if value added > all costs)
• How can a business increase value added?


  • Reduce the cost of materials but keep selling price the same
  • Increase selling price but keep cost of materials the same
• Ways to increase the selling price and increase added value


  • Branding
  • Convenience
  • Quality
  • Design
  • Excellent customer service
• How do new business ideas come about?
• Why do new business ideas come about?


  • Changes in technology
  • Changes in what consumers want
  • Products and services becoming obsolete
• Read & Complete the Swoon Editions case study
• app, by knowing how many hair duct is