1.1 Enterprise & Entrepreneurship (Edexcel GCSE Business): Flashcards
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Why do new business ideas come about?
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Why do new business ideas come about?
New business ideas come about due to changes in technology, changes in what consumers want, and products and services becoming obsolete.
Define original idea.
An original idea is a new and unique concept that is not based on an existing product, service or idea.
True or False?
New business ideas can only come from completely original concepts.
False.
New business ideas can come from original ideas or by adapting existing products, services or ideas.
Define obsolete (product or service).
An obsolete product or service is one that has become outdated due to changes in technology or consumer demand.
How can advances in technology create new business ideas?
Advances in technology create opportunities to develop innovative new products and services that reach and serve customers in new ways.
Original ideas often arise when entrepreneurs identify a in the market.
Original ideas often arise when entrepreneurs identify a gap in the market.
True or False?
A change in what consumers want can create opportunities for new businesses.
True.
Consumer demand changes over time, creating opportunities to develop new products and services that meet those changing needs.
Entrepreneurs recognise created by changes in the market.
Entrepreneurs recognise opportunities created by changes in the market.
Why can a product becoming obsolete lead to a new business idea?
When a product becomes outdated (obsolete), it creates opportunities to develop new products and services that meet customer needs in new ways.
How can a new business idea come about without being completely original?
By adapting an existing product, service or idea — making it better or more suitable for a different market or customer base.
What are the three main risks of business activity?
The three main risks are business failure, financial loss, and lack of security.
What are the three main rewards of business activity?
The three main rewards are business success, profit, and independence.
Define business failure.
Business failure occurs when a business cannot meet its financial obligations or generate enough revenue to sustain its operations.
True or False?
Only new businesses face the risk of business failure.
False.
Business failure affects businesses of all sizes — both new and established.
Define independence (as a reward of business).
Independence allows a business to make its own decisions rather than being subject to the demands of external stakeholders.
Give three ways an entrepreneur can reduce business risk.
Risk can be reduced by managing cash flow, conducting market research, and setting clear aims and objectives.
Define profit (as a reward of business).
Profit is a measure of a business's success that lets it reinvest in growth, pay dividends and provide financial stability.
True or False?
Business success only means making a profit.
False.
Business success is achieved when a business meets its objectives, such as generating revenue, achieving profitability or expanding its operations.
Why is financial loss a risk for a business?
Financial loss can lead to reduced profitability, reduced competitiveness, and a reduced ability to invest in growth.
A lack of security includes threats to a business's data, property and physical security.
A lack of security includes threats to a business's data, intellectual property and physical security.
What are the three purposes of business activity?
The three purposes are to produce goods or services, meet customer needs, and add value.
Define adding value.
Adding value is the difference between the price charged to the customer and the cost of the inputs used to create the product or service.
What is the difference between goods and services?
Goods are physical products, whereas services are non-physical items.
Define entrepreneur.
An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success.
What are the three main characteristics of an entrepreneur?
An entrepreneur organises resources, makes business decisions, and takes risks.
Name three methods a business can use to add value.
A business can add value through branding, convenience, quality, design and unique selling points (USPs).
A product that is easier to use or of higher quality than rivals can create a competitive for a business.
A product that is easier to use or of higher quality than rivals can create a competitive advantage for a business.
True or False?
An entrepreneur can succeed by organising resources alone.
False.
An entrepreneur must also make business decisions and take risks, not just organise resources.
Why do businesses aim to meet customer needs?
Meeting customer needs helps a business build customer loyalty, increase brand awareness and generate revenue.
An entrepreneur must gather and coordinate the needed to start and operate a business.
An entrepreneur must gather and coordinate the resources needed to start and operate a business.
True or False?
Adding value allows a business to differentiate its product from competitors.
True.
Value-added features differentiate a product, create a unique selling point and increase customer satisfaction.
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