1.1.1BM SL20 flashcards

Nature of businesses

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Card 1 of 201.1.1

Question

Define a business.

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All 20 Flashcards — Nature of businesses

Card 1example

Question

Define a business.

Answer

A business is an organization that provides goods or services to satisfy customer needs and wants.

💡 Hint

Use: goods or services + needs/wants.

Card 2example

Question

State one key difference between goods and services.

Answer

Goods are tangible and can be stored; services are intangible and cannot be stored.

💡 Hint

Tangible vs intangible.

Card 3example

Question

Define a customer need.

Answer

A need is an essential requirement for survival, such as food, water, or shelter.

💡 Hint

Need = essential.

Card 4example

Question

Exam tip: What must you include to get full marks when defining a business?

Answer

Mention that a business provides goods or services to satisfy customer needs and wants.

💡 Hint

Hit: goods/services + needs/wants.

Card 5example

Question

What is meant by goods?

Answer

Goods are tangible (physical) products that can be touched and stored.

💡 Hint

Tangible = physical product.

Card 6example

Question

State two ways goods and services differ.

Answer

Goods are tangible and can be stored; services are intangible and cannot be stored.

💡 Hint

Tangible + storage.

Card 7example

Question

Give two examples of goods.

Answer

Examples of goods include clothing and smartphones.

💡 Hint

Physical products.

Card 8example

Question

Define a customer want.

Answer

A want is a desire that is not essential for survival but improves quality of life.

💡 Hint

Want = non-essential.

Card 9example

Question

State one example of added value.

Answer

A café adds value by turning coffee beans, milk, and labor into a latte sold at a higher price than input costs.

💡 Hint

Inputs -> product customers pay for.

Card 10example

Question

Give two examples of services.

Answer

Examples of services include healthcare and banking.

💡 Hint

Activities performed for customers.

Card 11example

Question

Give one example of a need and one example of a want in transportation.

Answer

Need: basic public transport to get to work. Want: a luxury sports car.

💡 Hint

Same category, different level.

Card 12example

Question

What is meant by services?

Answer

Services are intangible activities performed for customers and cannot be stored.

💡 Hint

Intangible = not physical.

Card 13example

Question

Give one example of a customer need and one example of a customer want.

Answer

Need: clean water. Want: premium bottled sparkling water.

💡 Hint

Need = essential; want = improves life.

Card 14example

Question

Why can services be harder to standardize than goods?

Answer

Services depend on people and customer experience, so quality can vary between employees, locations, and times.

💡 Hint

Think: customer experience varies.

Card 15example

Question

State one need and one want.

Answer

Need: shelter. Want: a luxury holiday.

💡 Hint

Need essential; want desirable.

Card 16example

Question

Why is the difference between needs and wants useful for businesses?

Answer

It helps businesses design products, set prices, and target customers based on what is essential versus desirable.

💡 Hint

Think: product + price + target market.

Card 17example

Question

Why do all businesses exist in one sentence (IB style)?

Answer

To satisfy customer needs and wants by providing goods or services and adding value through transformation.

💡 Hint

One sentence, include add value.

Card 18example

Question

How can a want become a need over time?

Answer

If society changes so the item becomes essential for normal living or work, such as internet access in many countries.

💡 Hint

Think: social/tech change.

Card 19example

Question

Give one example of a business that provides both goods and services.

Answer

A restaurant provides goods (food) and services (table service).

💡 Hint

Many businesses are mixed.

Card 20example

Question

What does it mean to add value?

Answer

Adding value means transforming inputs into outputs that customers are willing to pay more for than the cost of inputs.

💡 Hint

Inputs -> transformation -> outputs.

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What is a business?

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