Business Revision 2 PDF

**Define entrepreneur**: An entrepreneur is a person who undertakes a business venture and assumes the risk of its success or failure. **Distinguish between an entrepreneur and innovation**: An entrepreneur starts a business and takes on the risk, while *innovation* is about creating a new or impro...

**Define entrepreneur**: An entrepreneur is a person who undertakes a business venture and assumes the risk of its success or failure. **Distinguish between an entrepreneur and innovation**: An entrepreneur starts a business and takes on the risk, while *innovation* is about creating a new or improved product, service, or process. **Enterprise skills, behaviour, and capabilities:** - **Identify six skills that an entrepreneur possesses**: 1. Risk management 2. Decision-making 3. Problem-solving 4. Communication 5. Networking 6. Strategic thinking\   - **Identify four characteristics of an entrepreneur**: 1. Willingness to take risks 2. Creativity 3. Determination 4. Adaptability\   - **Define business opportunities and identify three opportunities for success**: 1. *Business Opportunity*: Circumstances that allow a business to thrive. 2. Opportunities: 1. **Market Opportunity**: Filling a gap in the market. 2. **Technological Developments**: Using new technologies. 3. **Global Markets**: Expanding internationally.\ \ \ ** ** 1. **Define marketing**: Marketing goes beyond selling and advertising; it involves understanding and satisfying customer needs, much like other business departments (e.g., operations, HR). 2. **Why is marketing important?**: Marketing helps businesses understand and meet customer needs, ensuring the right products are available at the right time and price. 3. **Link between marketing and business objectives**: Marketing helps achieve business objectives by: - Increasing profit through higher sales. - Expanding market share. - Growing the business with new or related products. - Maximizing customer service. 4. **Market segmentation**: Divides the market into customer groups with similar needs, allowing businesses to focus resources effectively. 5. **Two common marketing campaign objectives**: - Increase brand awareness. - Generate sales or leads.\   **The Marketing Mix:** - **Total product concept**: Considers the overall value of a product, beyond just its core function, to meet customer needs. - **Three pricing strategies**: - *Cost-based pricing*: Based on production costs plus a margin. - *Competitor-based pricing*: Based on competitors' pricing. - *Value-based pricing*: Based on perceived customer value. - **Three types of placements**: - *Direct distribution*: Selling directly to customers. - *Retail distribution*: Selling through stores. - *Online distribution*: Selling through e-commerce. - **Three ways to promote products**: - *Publicity/Public Relations*: Free media coverage to enhance brand image. - *Personal Selling*: Direct customer interactions. - *Advertising*: Paid promotions through media to increase awareness.   - **Types of Business Locations**: - *Shopping Centres*: High foot traffic, ideal for attracting shoppers. - *Retail Shopping Strips*: Visible, street-level shops for walk-in customers. - *Online Store*: No physical location, sells directly online. - *Home-Based Business*: Run from home, low-cost option for startups. - **Advantages and Disadvantages**: - *Shopping Centres*: - **Pros**: Lots of customers. - **Cons**: High rent, competition. - *Retail Strips*: - **Pros**: Good visibility. - **Cons**: Nearby competitors. - *Online Store*: - **Pros**: Low costs, wider reach. - **Cons**: No physical presence. - *Home-Based*: - **Pros**: Flexible, low-cost. - **Cons**: Limited access for customers. - **Factors Affecting Location Choice**: - *Visibility*: Important for attracting customers, especially retail. - *Cost*: Rent varies; some locations cost more. - *Proximity to Suppliers*: Closer suppliers mean lower transport costs. - *Proximity to Customers*: Easy access and parking are helpful. - *Competitors Nearby*: May reduce your customer base. - *Complementary Businesses Nearby*: Attracts more customers (e.g., furniture + electronics stores together). - **Local Council Zoning**: - Councils divide land into residential, commercial, and industrial zones to avoid business activities disrupting homes.   - **Types of Business Resources**: - *Natural Resources*: Raw materials from nature, like water, wood, and minerals. - *Labour*: Human effort, skills, and time used in the business. - *Capital*: Man-made tools, equipment, and machinery that help production. - **Example**: *Kmart* - *Natural Resources*: Cotton for clothes, plastic for toys. - *Labour*: Store staff, managers, delivery drivers. - *Capital*: Cash registers, shelving, and store equipment.   **usiness Performance** - **Effectiveness vs. Efficiency**: - *Effectiveness*: Indicates how well a business achieves its goals and objectives. - *Efficiency*: Assesses how well a business uses its resources to reach its goals, focusing on minimizing waste, using fewer inputs, or maximizing output. - **Key Performance Indicators (KPIs)**: - KPIs are metrics used to assess business performance. - Common KPIs: - *Staff Turnover*: Measures the rate at which employees leave and need replacing. - *Staff Absenteeism*: Tracks how often employees fail to attend work as scheduled. - *Customer Complaints*: Counts the number of times customers report dissatisfaction. - *Workplace Accidents*: Measures unplanned events disrupting workflow, impacting safety. - **2023 KPI Data Analysis**: - *Staff Turnover*: Increased from 5% to 9%, possibly indicating lower job satisfaction or internal challenges. - *Staff Absenteeism*: Jumped from 3% to 11%, showing a rise in attendance issues that could impact productivity. - *Customer Complaints*: Fell from 14 to 4, suggesting better customer satisfaction. - *Workplace Accidents*: Decreased from 3 to 0, reflecting improved workplace safety and potentially boosting morale.