Unit 1 Exam

• What is entrepreneurship?

  it is the process of establishing a business to satisfy a need in the market, in hopes for making a profit, whilst taking on the associated risks.
• Who is an entrepreneur?

  An individual who starts up a business and takes in the associated risks in order to satisfy a need in the market.
• What are some entrepreneurial skills?

  • risk taking: prepare to risk money, time, & career with possibility of failure. calculated risks may help in opportunities
  • leadership: shares business‘s vision with employees in order to inspire, support, & persuade them to share this vision.
  • Innovation: able to develop new ideas, processes, & new approaches to problems. Helps gain a competitive edge.
  • communication: ability to listen to feedback but also provide a clear vision & direction to employees.
  • Networking: able to develop business contracts that can provide assistance in future.
• What is personal independence?

  a person being in control of their own decisions and actions. Many individuals start a business as they have the desire to have full control over their job and be their own boss.
• What is financial independence?

  ability to fund a desired lifestyle without relying on income from another individual. One of the main reasons why individuals decide to own their own business is because it allows them to no longer rely on an employer for their income.
• How is making a profit a reason for starting a business?

  Making a profit involves a business generating more revenue than expenses it incurred. Individuals working for an employer often feel that, as an employee, their earning potential is limited. Like the desire for financial independence, individuals can be driven to start their own businesses to earn more money.
• What does it mean to fulfill a market need?

  when a business fills a gap in the market by addressing customer needs that are currently unmet or underrepresented by competitors in the same industry. When starting a business, individuals may be motivated to satisfy customer needs that are currently unmet or underserved by other businesses.
• What does it mean to fulfill a social need?

  improving society and the environment through business activities. Many business owners are motivated to establish a business that fulfils a social need and positively impacts society through contributions and improvements to the local or wider community.
• What are reasons for starting a business?

  • personal independence
  • financial independence
  • to make a profit
  • to fulfill a market need
  • to fulfill a social need
• Who is a manger?

  an individual who has the responsibility of overseeing and handling employees whilst also running the day-to-day business tasks to achieve objectives.
• What are the characteristics of a successful manager?

  • communication: clear direction to employees, listen to feedback and provide support.
  • determination: driven to put in significant amount of work to plan for a business
  • knowledge: understands the environment they operate in = take best course of action for business
  • Strong ethics: consideration for employees and potential customers.
  • flexibility: adapt and change business strategy when required essential for its survival.
• What are sources of business opportunity?

  • innovation
  • market opportunities
  • changing customer needs
  • research and development
  • technological development
  • global markets
• How does innovation create a business opportunity?

  innovation involves either establishing an entirely new idea or modifying existing goods, services, or processes. Innovation requires researching & developing products that add value to customers’ lives. By creating unique, innovative products better than ones offered by competitors, business can improve its sales and growth as customers will be more inclined to buy an improved product.
• Examples of innovation from modifying existing products.

  • Fuel vehicles = Electric vehicles
  • Reactive medication = Vaccine
  • Landline phones = Smart phones
• Examples of innovation leading to new ideas.

  • World wide web (Internet)
  • Bitcoin
• What are market opportunities?

  It is a need or what that is not currently being met by any business. These opportunities are created when there are gaps in the market. Gaps can exist when currently available products do not completely satisfy customer expectations or demands. Businesses should constantly monitor market to identify gaps by doing so, business can meet customer needs, expectations & demands = creating competitive edge = attracting more customers = more sales.
• What are factors that can create market opportunities?

  • changing demographics: luxury fashion market in Australia has grown rapidly due to increases in the level of income of the population.
  • changing societal attitudes & norms: Changes to the way people spend have reduced the use of cash and increased card-based payments.
  • changing laws & regulations: no longer allowing animal testing for cosmetics. The production of cruelty-free cosmetics and ingredients increase.
  • Advancements in technology: voice recognition technology has allowed the creation of smart home and personal assistant devices.
• How do changing customer needs create business opportunities.

  These are the transitions in the desires of consumers. Business must monitor purchasing trends, as well as any customer feedback or complaints, to continually meet society‘s changing needs. These trends and reviews can indicate opportunities for a business to sell new or modified products to better satisfy customers. Businesses that are successful in predicting future customer needs & wants = competitive advantage = new customers = continuous sales.
• What is the effect of changing customer needs on goods & services?

  • Increased expectations for customer convenience = bricks & mortar stores (set opening hours) = online stores (access anytime)
  • increased reliance on technology = traditional wristwatch = smartwatch with apps & internet connectivity
  • changing societal trends = restaurants with few options = restaurants offering range of dietary options (gluten free, vegan, organic & dairy free)
  • changing societal values = plastic packaging = environmentally friendly packaging that can be recycled in some way (100% biodegradable)
• How does research & development provide business opportunities.

  involves directing resources, such as money, towards discovering, creating, and introducing new products & processes. By doing so, new & improved products & processes can more accurately mete customer needs. By meeting these customer needs, a business can increase its sales & gain a competitive advantage, receiving a return on investment on funds devoted to research & development.
• What are the steps of the research & development process?

  1. Business idea
  2. gathering information
  3. analysing costs & benefits
  4. creating & testing product or process
  5. launching product
• What is an example of research & development?


  Apple devotes significant amounts of money to research and development in order to provide customers with high-quality products. Apple sends its products to certain customers to trial for a given period of time, and then provides these customers with detailed surveys to reflect on their experience with the product.
• How does technological development provide business opportunities?

  These are the invention & innovation of tools that solve problems and enhance processes. They can provide business opportunities by improving how businesses create, deliver, and update goods & services. Technology can make existing goods or services more popular & accessible (food delivery apps). They can allow businesses to improve their production speed & lower production costs (machinery replacing human labour). They have also led it change in customer behaviours & needs = forcing businesses to implement technology.
• What are global markets?

  The area in which businesses trade goods & services, comprised of both businesses & customers from countries all across the world.
• How do global markets provide business opportunities?

  because it allows a business to reach more customers, helping to increase sales & market share. However, it is important that the benefits of reaching more customers outweigh the high cost of expanding operations overseas. Individuals can launch a business by using global markets to import goods & services to Australia. Businesses that are first to introduce popular products or ideas in their domestic market may become more competitive & quickly increase their market share, if the popular products are not yet available in Australia.
• What is goal setting?

  Establishing business goals that a business wants to achieve within a specific time frame. Without goals, a business may struggle to find a direction, resulting In a lack of focus & unsuccessful operations.
• What are the three broad types of goals?

  • Financial
  • Social
  • Personal
• What are financial goals?

  These may include expanding a business, increasing revenue, increasing profit margins, or improving productivity in business operations. It is important to set and work towards financial goals, as achieving strong financial performance is crucial to a business‘s long-term survival & success.
• What are social goals?

  may include reducing the business‘s impact on the environment, helping resolve community issues, or advocating for employee welfare in the industry. can help improve a business’s reputation, which can increase sales and profit as customers are more likely to support a socially responsible business.
• What are SMART goals?

  effective goals that can contribute to business success. Creating goals that are specific, measurable, attainable, relevant, and time-bound can provide a business with a clear purpose and direction. Goals can be communicated to the public to promote the purpose of a business, or they can be outlined internally to motivate employees.
• What is decision making?


  is the skill of selecting a suitable course of action from a range of plausible options.
• What is the importance of decision making in business?

  Managers have a central role in a business’s decision-making process and must utilise this skill when considering areas of potential growth. By evaluating the advantages and disadvantages of potential business decisions, as well as considering the environment in which the business operates, a manager can decide which goals to set.
• What is a business concept?

  brief outline of the business’s idea, its main selling activities, and the features that will provide it with a competitive advantage. Developing a business concept is one of the first steps when starting a business.
• What is business concept development?

  Once an idea for a business is formed, the owner should identify the goods or services the business plans to sell. When developing a business concept, it is important that the business aims to sell goods or services that are currently unavailable in the market or are superior to those currently being sold by competitors. This ensures the business is fulfilling a gap in the market and creating a competitive advantage that can assist it in attracting customers away from competitors and towards its products instead.
• What is an intellectual property?

  an original creation of the mind that can be legally owned. A business can protect specific parts of its business concept if they are considered intellectual property. These exclusive ideas can be developed and sold in the future to gain a competitive advantage. To make sure that intellectual property is protected and unable to be copied by competitors, a business can implement a range of legal barriers.
• What is a trademark and what does it protect?

  form of legal protection over the rights of a business’s name, symbols, colours, packaging, or additional tools used to sell its products. A trademark will help a business ensure that it possesses a unique image or look that cannot be replicated by other businesses.
• What is a patent and what does It protect?

  a licence that provides a business with exclusive rights to the use of innovative devices, methods, and processes. A patent can help create a competitive advantage by protecting new inventions intended to be sold by a business.
• What is a copyright and what does it protect?

  is a free and automatic protection for original ideas such as writing, art, sound, films, and photographs. A business can take legal action if another entity uses its copyrighted materials.
• What is a domain name and what does it protect?

  a unique website address. Even if a business is yet to establish an online platform, registering a domain name will ensure a business can use the desired domain address in the future. The domain name can also not be copied once the business is launched.
• What is the relationship between business opportunities and business concept development?

  Initial business ideas and concepts are often developed after identifying a business opportunity in the market. After recognising a business opportunity, business owners can decide on the goods or services they want to sell to gain a competitive advantage.