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GCSE Business Theme 1 investigating Small Businesses1.1 Enterprise and Entrepreneurship Key TermsKey term DefinitionProductPhysical items that businesses produce to sell to customers eg Heinz Baked Beans. (Tangible).ServiceNon-physical items provided by businesses eg a hair cutNeedsThe things that are essential for customers and are difficult to live without eg foodWantsNon-essential products that customers desire rather than need.ConsumerThe person who uses the product or serviceDemandThe quantity customers are willing to buy at any given price.Technology ChangeImprovements in technology that allow new products to be developedE-commerceUsing the Internet to do business eg M-CommerceUsing mobile technologies to do business eg amazon app on a phonePayment PlatformsThese allow businesses to take online payments from customers. They are free for customers to use but the seller will need to pay a fee.DemographicThis relates to the breakdown of the population eg age, gender, income etc. St Annes has more old people compared to other areas.ObsoleteDemographics, when a product or service becomes out of date or not used anymore.Adapting existing productsWhere a business looks at their current range and updates it to suit customer demand. eg McDonalds offering saladsOriginal ideasAdapting existing products. Where a business looks to discover a completely new way of satisfying customer needs and wants. Technology can help with the development of this eg robots delivering Amazon stock to the packing petitive AdvantageWhen your business is in a favourable position compared to the competition. Customers will pick you due to this. eg BMW cars and qualityRiskThe chance of loss of money or damage to your business from decisions.LossWhen a business is unable to generate enough revenue to cover all its costs. This may lead to business failure.Lack of SecurityA key risk new businesses take on. There is no guarantee of success and entrepreneurs may feel there is a lot to lose.RewardThe benefits received from running a business. These can be financial such as profit and wealth, or non-financial such as independence.ProfitWhere the business generates enough money to cover all the costs and a surplus is left as profit. What's left from the revenue once all the costs have been paid.IndependenceBeing able to do things by yourself - a key reason for setting up your own business.Calculated RiskWhere the entrepreneur weights up all the risks and rewards before making a decision.EnterpriseEntrepreneurial activityAdding ValueThe difference between the cost of materials to make the product/service and the selling price. Transforming the raw materials so customers will pay more for them. Could include making bread into a sandwich, adding a logo.BrandThe factors that help identify a product such as the name, logo, colours. Can help with adding valueUSPSomething that makes the product or service stand out from the competition eg brand, logo, ingredientsCustomer loyaltyWhen a business manages to get customers to come back to them and buy more of their products and services. Linked to repeat purchase.EntrepreneurSomeone who is willing to take on the risks of setting up as business with the aim of making a profitOrganise resourcesMaking sure the business has enough money to run, enough stock to satisfy customers and enough workers to serve them.Making business decisionsGathering all the information you need before any choices are madeShowing LeadershipEffectively managing the business and staff so that they are willing to do as you say. ................
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