1.1 understanding business activity

• what is business activity

  is the process of producing goods and services to satisfy consumer demand by transforming resource input.
• what is a need

  is a good or service which is essential to living
• what is a want

  is a good or service which a consumer would like but is not essential to living
• (factors of production)what is land

  all of the natural resource found on the planet to help make goods or provide services
• (factors of production) what is labor

  the physical effort we put into making goods or providing services
• (factors of production) what is capital?

  is any human created resource that is used to produce other goods and services

  Human capital

  Knowledge a person gains through education or experience

  Physical capital

  Any human made things that produces other things or aids in the production of other things

   

   
• what is enterprise?

  is the process of launching and running a business in order to make money
• what is scarcity(economic problem)?

  where there are not enough goods and services to meet the wants of the population
• what is opportunity cost?

  the benefit that could've been gained from an alternative use of the same resource
• what is specialization?

  is when people and businesses concentrate on what they do best, to make use of scarce resources
• what is division of labor?

  was made by Adam Smith. this is when production is divided in separate tasks and each employees does just one of those tasks
• what are the advantages of specialisation?

  ·      Increase in productivity and efficiency, meaning more output and more profit

  ·      Less need for training and employees become more confident in their work

   
• what are the disadvantages of specialization?

  ·      Worker Absenteeism disrupts  production

  ·      Performing the same tasks repeatedly can lead to boredom and a lack of job satisfaction. This can lead to decreased motivation and production
• what is a gap in the market?

  is a market that no other businesses are selling in
• why do new businesses exploit in gap markets?

  because there in an unlikelihood of competition
• why do entrepreneurs set up new businesses?

  to make profit, for social causes and to be independent
• what types of goods do entrepreneurs sell?

  ·      Consumer goods=anything a consumer buys

  ·      Consumer services

  ·      Capital goods=anything that is used to help production
• what is B2B and B2C?

  ·      B2B= business to business

  ·      B2C= business to consumer
• what is the chain of production?

  is the production and supply of goods to the final consumer involving activities from the primary, secondary and tertiary sector
• what is the transformation process?

  is the process of taking the raw materials and transforming it to the final product output
• what is adding value?

  selling a product for more than it cost to produce it
• what is the calculation for profit?

  selling price- cost of production
• what is a USP?

  a unique selling point is a special feature of a product that sets it apart from the competitors products
• what are the advantages of a USP?

  ·  A USP helps a business stand out from its competitors by clearly highlighting what makes it unique. This differentiation is crucial in crowded markets where many products or services are similar.

  ·  A USP emphasizes the unique benefits and value of a product or service, which can justify a higher price point. This perceived value can lead to increased profitability.

   
• what are the processes of adding value?

  ·      Branding

  ·      Customer service

  ·      Adding features to products and quality

  ·      convenience
• (adding Value) what are the benefits of branding?

  ·      Recognition and Awareness: Strong branding helps create recognition and awareness among consumers. A distinctive brand name, logo, and consistent messaging make it easier for customers to identify and remember your products or services.

  ·  Perceived Value and Pricing Power: Strong brands can command higher prices because they are often associated with higher quality and reliability. Consumers are willing to pay a premium for branded products they trust.
• (adding value) what are the drawbacks of branding?

  ·  High Costs: Developing and maintaining a strong brand can be expensive. This includes costs for logo design, advertising, brand research, and continuous promotional activities its Time-Consuming: Building a strong brand takes time. It requires consistent effort over a long period to establish brand recognition, loyalty, and trust.

  ·  consistency Challenges: Maintaining brand consistency across all platforms and markets can be challenging. Any deviation from the established brand image can confuse customers and weaken the brand's impact.
• (adding value) what are the benefits of a strong customer service?

  ·  ↗️ Customer Satisfaction: Excellent customer service ensures that customers have positive experience with a business, leading to ↗️ levels of satisfaction. Satisfied customers are more likely to return and make repeat purchases creating Customer Loyalty,amazing customer service build loyalty. Customers feeling valued are likely to stay loyal and continue doing business.

  · Positive WordofMouth: Satisfied customers are more likely to recommend a business. word-of-mouth can lead to new customers and enhanced brand reputation.
• (adding value) what are the drawbacks of good customer service?

  ·  High Costs: exceptional customer service often requires sig financial investment. Includes costs associated with hiring & training, adding customer service tech and maintaining cus serv operations.

  · Consistency Challenges: Maintaining consistent service quality across all channels can be challenging. Inconsistent customer experiences can damage a company's reputation and customer trust. Employee Burnout: Customer service roles can be stressful, leading to burnout. High-stress environments can result in high turnover rates.
• (adding value) what are the benefits of adding features to a product?

  · customer retention: improving a product with new features can keep existing customers. Customers are likely to stick with a brand that evolves and meets their changing needs. Introducing new features can extend the lifecycle(product), keeping it relevant for a longer period. This can delay the need for complete redesigns or new product launches

  ·  Adding in response to trends and tech in the market ensures that a product remains relevant. This can help a business stay competitive in the changing market.
• (adding value) what are the drawbacks of adding features to a product?

  · Increased Complexity: Adding too many features can make a product more complex and difficult to use. can lead to user frustration. Higher Development Costs: Developing new features requires significant investment and resources. This can strain a company’s budget and impact profitability, especially if they do not generate return on investment + More features mean more to maintain and support. This can increase the workload for service and tech support +raise maintenance costs .
• (adding value) what are the benefits of convenience?

  ·       Close location= customers are willing to pay more

  · Time Savings: Convenient products and services save time for consumers, allowing them to focus on other important tasks and activities. This is particularly valuable in busy lifestyles where time is a limited resource.