The Dynamic Nature of Business Flashcards

All 11 cards in this deck

Name the three reasons why new business ideas come about.

Changes in technology; changes in what consumers want; products and services becoming obsolete.

How can changes in technology lead to new business ideas?

Technology allows new products to be created, and entrepreneurs then look to create demand for the new product.

How can changes in what consumers want lead to new business ideas?

Existing products may no longer meet customer needs, so an entrepreneur spots a new business opportunity in the market.

What does it mean if a product or service is obsolete?

It is no longer used or needed because it has been replaced by something newer or more advanced.
e.g. DVDs replaced by media-streaming services.

What are the two ways new business ideas come about?

Original ideas, and adapting existing products, services or ideas.

What is an invention?

Creating something that did not previously exist.

What is innovation?

The successful commercialisation of an invention, or adapting a product over time to improve its features.

Give one advantage of adapting an existing product instead of creating an original idea.

Any one of: the business already understands the market; lower development costs; it takes less time and creative input to launch.

Give one drawback of adapting an existing product rather than creating an original idea.

It may not be as innovative, so it may not fully meet changing customer needs and customers may buy a competitor's new product instead.

Give two causes of changes in what consumers want.

Any two of: fashion trends; the state of the economy; an ageing or otherwise changing population; new lifestyles and leisure habits; new technology.

What is planned obsolescence?

Deliberately designing a product to have a short life, so that customers replace it with a newer version.