Comp 1

• Enterprise


  The activity of setting up a business, taking on financial risks in the hope of profit
• SMEs


  Small and medium-sized enterprises
• Satisfying needs and wants


  Can give opportunities to entrepreneurs
• Business opportunities


  Chances to start or develop a business
• Entrepreneur


  A person who sets up a business, taking on financial risks in the hope of profit
• Role of the entrepreneur

  1. Creating

  2. Setting up

  3. Running

  4. Developing a business
• Motives of entrepreneurs


  • Financial
  • Non-financial
• Characteristics and skills of entrepreneurs


  • Ability to identify opportunities
  • Willingness to take risks
  • Persistence
  • Creativity
  • Leadership
• Stakeholders


  Individuals or groups affected by a business
• Business plan


  A document that outlines the goals, strategies, and operations of a business
• Market


  The area of economic activity in which buyers and sellers interact
• Competition


  The rivalry between businesses to attract customers and make sales
• Types of markets


  • Local/global
  • Mass/niche
  • Trade/consumer
  • Product/service
  • Seasonal
• Market segmentation


  Dividing a market into distinct groups of customers with different needs, characteristics, or behaviours
• Perfect competition


  A market structure with many small firms selling identical products, and no firm has market power
• Monopolistic competition


  A market structure with many firms selling similar but differentiated products
• Oligopoly


  A market structure with a few large firms that dominate the market
• Monopoly


  A market structure with a single firm that is the sole supplier of a product or service
• Consumers sometimes need protection from exploitation by businesses
• Demand


  The quantity of a good or service that consumers are willing and able to buy at different prices
• Supply


  The quantity of a good or service that producers are willing and able to sell at different prices
• Equilibrium


  The point where the quantity demanded equals the quantity supplied
• Factors that lead to a change in demand and supply

  1. Changes in consumer income

  2. Changes in the prices of related goods

  3. Changes in consumer tastes and preferences

  4. Changes in the number of sellers

  5. Changes in production costs
• Change in demand and supply


  Impacts price and quantity
• Demand and supply diagrams

  Graphical representations of the relationship between price and quantity demanded/supplied
• Factors that cause the demand and supply curves to shift and the effect this has on equilibrium price and quantity
• Price elasticity of demand


  The responsiveness of the quantity demanded to a change in price
• Income elasticity of demand

  The responsiveness of the quantity demanded to a change in consumer income
• Inferior goods


  Goods for which demand decreases as income increases
• Normal goods


  Goods for which demand increases as income increases
• Luxury goods


  Goods for which demand increases more than proportionately as income increases
• Market research


  The process of gathering information about consumers' needs, preferences, and buying behaviour
• Primary research


  Original research conducted by a business to gather new data
• Secondary research


  Research using existing data collected by others
• Qualitative data


  Non-numerical data that provides insights and understanding
• Quantitative data


  Numerical data that can be measured and analysed statistically
• Sampling


  The process of selecting a representative subset of a population to study
• Random sampling


  Each member of the population has an equal chance of being selected
• Quota sampling


  The sample is selected to match the proportions of different characteristics in the population
• Businesses need to avoid bias in market research