High quality comprehensive and simple notes written over the 2 years which secured a grade 9 in GCSE Business Studies. Notes tailored specifically to the specification with no unnecessary complications to make your revision simple and effective. Can work as class or revision notes
Why new business ideas come about:
- changes in technology
- E-commerce
- E-commerce is any business transaction that takes place using the internet
- businesses selling to consumers
- businesses selling to other businesses
- consumers selling to other consumers directly (eg auction sites)
- allowed businesses to sell to different countries and customers on a much wider scale
- M-commerce
- Any business transaction that takes place through a mobile device.
- Businesses try to increase popularity by developing their own mobile apps
- Includes transactions via websites
- used in regular shops where payment can be made via a smartphone.
- Social media
- Businesses and customers can interact
- Able to create more personal relationships with customers
- Simple, cheap and effective
- Creates brand awareness
- can also pay businesses, celebrities or influencers to promote their brand or product by
sharing photos of themselves wearing or using a product or service
- cheaper than traditional advertising
- Allows business to reach target market
- used to attract new and retain existing customers.
- changes in what consumers want
- Demographics Changes
- Demographics are the different characteristics that make up a population, or a
business’ customer base.
- age
- gender
- disability
- nationality
- religion
- ethnicity
- income levels
- Help them decide on the target market
- Changes demographic can impact upon consumer wants
, - Consumer wants changing over time
- Changes in lifestyles and technology change what consumers want
- Entrepreneurs respond and provide for this through their products and services
- customers’ tastes regularly change, as do trends in society
- This requires new products or adaptation
- Businesses have to constantly monitor the market, technology and their
competitors to ensure they are keeping up with constantly changing consumer
demands.
- products and services becoming obsolete.
- Obsolete means ‘out of date’
- As products become obsolete, new products replace them.
- Most products have a limited lifespan and, at some point, will no longer be available to buy.
- This lifespan is known as the product life cycle.
- Introduction
- Growth
- Maturity
- Decline
- One of the main reasons why products become outdated is technological advancement
How new business ideas come about:
- original ideas
- adapting existing products/services/ideas.
1.1.2 Risk and reward .
The impact of risk and reward on business activity:
- Risk:
- business failure
- lack of cash flow.
- don’t have enough money coming in to cover costs
- poor revenue caused by:
- a lack of market research to find out what customers want
- running out of raw materials
- poor management, with not enough thought given to the consequences of
decisions on how to manage the business
- financial loss
- personal money or money borrowed from a bank or an investor
- If the business is not profitable then the entrepreneur, and any lenders, risk losing the
money
- lack of security
- Often have to give up existing jobs in order to run business
- Can’t depend on regular income
, - Reward:
- Business success
- Can mean different things:
- a growing business
- a positive reputation
- winning business awards
- becoming a well-known business person
- Ideas becoming popular
- Profit
- profits can be put back into the business
- help it survive and grow
- incentive for an entrepreneur to start a business,
- they can earn more money than they would if they worked for someone else
- Independence
- make their own decisions
- control their own working hours
1.1.3 The role of business enterprise .
The role of business enterprise and the purpose of business activity:
- to produce goods or services
- meets the needs of its customers
- Goods
- Goods are tangible items that can be used and stored
- Services
- Services are intangible actions that cannot be stored
- Decisions made to reduce risk:
- Land
- Naturally occurring resources (eg. land/water)
- Labour
- Human effort, skills or knowledge
- Capital
- Equipment and money
- Enterprise
- Willingness to take risks
- to meet customer needs/ wants
- Needs are required for survival:
- Clothing
- Water
- Food
- Shelter
- Warmth
- Wants: desired but can live without
- to add value: convenience, branding, quality, design
- Difference between production price and selling price
The role of entrepreneurship:
- organises resources
- makes business decisions
- takes risks
, 1.2 Spotting a business opportunity .
1.2.1 Customer needs .
Identifying and understanding customer needs:
- Customer needs:
- Price
- Important for price to match quality
- Quality
- The standard of what is being offered
- Choice
- Range to suit different customers
- Convenience
- Easier, quicker and less hassle for customers
- ie. online ordering
- the importance of identifying and understanding customers:
- generating sales
- Generating sales is easier when a business knows customers wants
- Enables business to provide a product/service that directly meets customers’
requirements.
- business survival
- Main aim of new, small business
- Usually relates to the business continuing to operate for at least 12 months
- Generating sales (through understanding customers) = business has greater chance of
survival
- Important to keep up with the changing requirements of customers
- Businesses must adapt their products and services to suit changing
requirements
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