Examples of Entrepreneurs:
Alan Sugar
Richard Branson
Bill Gates
Market Analysis
Niche in the market
Competitors
Market Share/ Market Growth
Time periods
Investigator Price
Start up, market cost ( product/price)
Bank Conditions(Economy)
Effects recession has on smaller business'
- Less competotrs
- less profit/ lower prices
- less investments
- Smaller variety of products
- less customers
- lack of demand
- more cost (overheads, running cost)
- change pricing strategies
- more likely for banks not to lend
- more owner's funds used
- higher failure rate (75% of smaller businesses fail)
- resources more expensive
- prices for supplies increase
- less trade credit- minimize risk
Business start-up
- passion/hobbie
- to make a profit
- gap in the market
- work on hours
- own boss (independance)
- Improve circumstances
- Enjoy feeling of risk
- Cashing in on a business idea
- Discovery of a gap in the market
- Providing assistance to the economy
- New business idea- provide a legacy
- Jobs for unemployed
Possible problems with ( start-up)
- Lack of investment
- Competitors(too much competition)
- Lacks of risks
- Location
- Inflation( prices to high)
- lack of security
- employment
- market mix( product, prices, place & promotion)
- Marketing
- Economies of scales
Markets
- Market-Any place or process bringing buyers and sellers with a view to agreeing a price.
- The bases of how an economy operates- through production and subsequent exchange.
Considerations for starting business in a market
- Types of market
- Size of the market
- Cost of resources/ overall costings
- Marketing mix( Product, price, place, promotion)
- Pricing strategies
- Promotion
- Distribution
- E-commerce( selling online)
- Cost to break-even
- Target Market
- Advertising- sponsorship
- Tax implications
- Promotional activities- Above/ bellow the line
- Running cost e.g. Electricity, Gas, Water
- Copywrite
- Customer Satisfaction- Measured through quality
- Morals/ ethics(fair trades)
- Stakeholders e.g. Government, community, customers
- Wages for staff/ training of staff(minimum wage)
- Laws- health & safety, government laws (discriminantion)
Customers & Sales- Big vs Small
Small
- Smaller cost
- Lower tax rate
- Less variety
- less sales
- Better quality product( job production)
- More customer loyalty
Big
- Larger income
- Higher tax rate
- More sales
- Retain smaller percentage of profit
- Higher market shares
The size of the market
- Profits made by business
- Market share of business
- Value of Sales
- Number of employees
- Volume of sales
A large market means lots of potential customers.
A small market means potential profits could be limited.
Market Share & market growth
Market share- Worked out as a percentage.
Firms with large market shares have greater power over suppliers and distributions.
They can demand preferential treatment & better rates.
Sales of the product X 100%
Total market size
Market growth
- Market growth refers to an increase in the size of the market for a particular product.
If the market is shrinking, how would it effect competitors?
- Less competition
- Fierce competition
- Larger opportunity profit
- Price increases
- Liquidation of companies
- Less room for venture
Why enter a growing market?
More chances of success
More money to be made
Higher demand
Less fierce competition
Less chance of failure
Benefit from economies of scale more
Room for expansion
Expansion
- Company develops
- Overseas(multi-national)
- More products
- Sales increase
- More customers
- More employees
- Location
- More brand awareness
- More accessible
Market Segments
- A market segment is an identifiable group with similar needs and want wants within a market.
Examples:- Age- Based on a particular age group e.g. over 18's
- Gender- Differs between male & females and unisex
- Income- E.g. Rolex and Porsche highly priced
- Socio- economic groupings- Based on income and jobs e.g. A,B,C,D,E
- Demographics- Area you live in (Poverty/rich area) Religion
- Purchase occasion- Bought on occasion e.g. flowers, birthday cards.
