AQA GCSE Business 8132

3.1.1 Business in the Real World (Component 1)

Purpose of Business: Businesses make goods and sell them to customers, who then own them. This includes computers, food and clothes. Services are intangible actions that cannot be stored. Businesses provide services to customers, who have access to them for a period of time.

^{Reasons to start a business}

• to produce a good (producteg Coca-Cola and Cadbury)
• to provide a service (eg Premier Inn and Talk Talk
• to distribute products, (eg Tesco and Asda(shop/retailer)
• to benefit society, (eg charities and social enterprises - no profit?)
• to fill a gap in the market (eg opening a hair salon in a village which has no other hairdresser)
• to fulfil a business opportunity

What are the differences

Goods: Tangible items that can be used and stored. Businesses make goods and sell them to customers, who then own them. This includes computers, food and clothes.

Services: Intangible actions that cannot be stored. Businesses provide services to customers, who have access to them for a period of time. Examples include hairdressing, train journeys and internet access.

Customer Wants: Wants are things that people would like to have but can survive without. Wants are unlimited, and might include event tickets, designer accessories, holidays, laptops, mobile phones and cars.

Customer Needs: Needs are things required in order to survive. These life-essential things include clothing, food, shelter, warmth and water.

Dynamic Nature of Business - PESTLE (Macro Environment)

To understand what makes a business dynamic, it is necessary to understand the market in which the business or enterprise operates. All business environments change constantly and are impacted by several different national and international factors.

• P POLITICAL: Political factors include tax policy, environmental regulations, trade restrictions and reform, tariffs, and also political stability. These factors determine the extent to which a government may influence an industry or a company
• E ECONOMIC:Economic factors can have a big impact on the success of a business. These include interest rates, inflation and GDP (Gross Domestic Product). Things affecting businesses at the moment are the rise in the cost of living. Electricity and gas prices are increasing so people have less money to spend on things they want. Interest rates are also increasing to try and halt the rate of inflation.
• S SOCIAL: Social factors include age distribution, population growth rate, employment levels, income statistics, education and career trends, and religious beliefs, as well as cultural and social conventions.
• T TECHNOLOGICAL: Keep up with rapid changes in technology, including advertising methods (moving from magazine advertising to social media advertising), production, e-commerce and m-commerce.   
• L LEGAL: Businesses will be affected by new legislation. When the law changes to ensure a minimum wage for employees it meant an increase in costs for businesses, but it meant workers (employees) would have more money to spend on things they want (disposable income)
• E ENVIRONMENT: Businesses have to be aware of how strongly their customers feel about environmental and ethical issues i.e., recycled and/or recyclable packaging, products not…