- Created by: Fflur Haf
- Created on: 08-05-19 19:17
There are two common definitions of enterprise in business:
- A business or organisation like Snap Inc (Snapchat).
- The qualities that allow the entrepreneur to take advantage of business opportunities.
- Someone is enterprising if they show initiative and are willing to take a risk by setting up, investing in and running a business.
An entrepreneur is a person who sets up a business and takes on the risk of enterprising activity. They have to be able to:
Take Risks -
- An entrepreneur is someone who takes on the risk of enterprising activity.
Identify Business Opportunities -
- Enterprise involves identifying business opportunities, and then creating a business (or expanding an existing business) to fill a gap in a market.
- There is always a risk of failure, but there is often a large reward for success.
Risk and Reward.
All businesses and the entrepreneurs that start them face risk and reward.
- If a business succeeds, there may be a big financial or emotional reward.
- A business may not succeed for a number of reasons. Starting a business is risky.
Businesses Face Constantly Changing Environments.
Every business is affected by the external environment that it operates in. The business environment is characterised by
- Technological advantages.
- The economy.
- Environmental expectations.
Technological Advantages -
- Advantages in technology can affect every aspect of a business. If there is a technological advancement in the capital used by a company, they may be able to produce the same products and services at a lower cost per unit.
- In the industrial revolution (1780 - 1850), advances in technology reduced the cost of cotton cloth (used in your clothes) by 85%.
The Economy -
- The economic situation describes how well the country and world's overall economy is performing.
- For example, in 2008 there was a financial crash which led to an increase in unemployment in the UK and other countries. Because of this, the customers of most businesses began to spend less money. Customers had less money to spend on luxury products like Gucci handbags or expensive holidays.
- Some industries are heavily impacted by laws (also known as pieces of legislation).
- When legislation (the law) changes, businesses can be forced to change their practices.
- For example, the UK government changed a law and forced cigarette companies to sell their products in plain packaging.
Environmental Expectations -
- In today's business environment, businesses have to change the way they operate to meet environmental expectations.
- For example, in 2018, in the supermarket, Iceland promised not to use plastic packaging in its supermarkets by 2023.
- Automotive (car and lorry) companies may be pressured to make electric vehicles instead of those that use petrol (or diesel fuel).