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87 Cards in this Set
- Front
- Back
What the purpose of a Business? |
To make and provide goods or services
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What is a Good?
Give an example |
Goods are physical items like ; a hover
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What is a Service?
Give an Example |
Services are non-physical products such as: a hair cut
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How do Businesses provide their service or good? |
By buying resources, such as raw materials, labour and machines
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Where do Businesses buy their resources?
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From a Supplier
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Who do Businesses sell their goods or services to?
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Customers
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What is a Market?
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Markets exist in any situtation when buyers and sellers exchange goods and services
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What do owners need to think about when setting up a Business?
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Is their a Business opportunity?
Will customers use their service or buy their goods? Do they have enough finances to start the business? Could the business make a profit? What would be needed to start the business running? What are the legal aspects i.e taxes? |
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What is a Consumer?
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The person who ultimately uses (or consumes) a product
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What are customer needs?
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The wants and desires of buyers of a good or users of a service
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What types of needs might customers have?
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Convince.
Reasonable Prices. Good range and quality of products. Knowledgeable and friendly customer service. |
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What is Market Research?
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The process of gaining information about customers, competitors and market trends using Primary and Secondary research
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What is another name for Primary Research and Secondary Research?
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Primary Research - Field Research
Secondary Research - Desk Research |
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What is Primary market research?
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Involves a collection of primary data - Information that hasn't been collected someone else.
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What types of Primary Research are their?
What do they involve? |
Surveys, involve asking questions to respondents. A type of survey is questionaires, which are a list of questions to be anwsered by respondents. They are designed to gather information about customer tastes.
Focus Groups, involve small groups of people coming together to talk about products or ideas, which are recorded by a researcher. Observation, involves looking and recording how other businesses behave. Consumer Trials, involve testing products on consumers and anaylsing their responses towards the products. Also in some situtations it could be possible to conduct experiments. |
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What is Secondary Researching?
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Involves the collecting of secondary data, which is information that has already been collected
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Where can you get Secondary Data?
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Market Reports
Government Publications Newspapers and Books Magazine and Articles The Internet CDs and DVDs |
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What is the advantages of Primary Research?
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Provides up to date, relevant and specific data according to your products.
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What is the disadvantages of Primary Research?
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It can be expensive to collect, time consuming and it needs a large sample size to be accurate.
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What is the advantages of Secondary Research?
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It's cheaper than Primary Research, it can be easily found and instantly available. This makes it ideal for a business with a limited budget.
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What is the disadvantages of Secondary Research?
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It might not always be relevant to the businesses needs.
It may not be specific to the products and its often out of date. |
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What two kinds of information can you get from Market Research?
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Quantitative and Qualitative Data
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What is Quantative Data?
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Data that can be measured or reduced to a number
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What is Qualitative?
Why is it hard to analyse |
Information that is about people's feelings and opinions. Its hard to analyse because it can hard to compare two people's opinions.
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Why do Businesses Market Map?
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Market Mapping helps a business understand its products location within the market, and the market's key features
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When will Businesses Market Map?
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After they have identified the segment of market they want to fill
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What do Market Maps illustrate?
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The position a product can take in a market, based on two dimensions that are important to customers
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What types of dimensions could their be on the Market Map?
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Low Price v High Prive
Basic Quality v High Quality Necessity v Luxury Simple v Complex Low-Tech v High-Tech Young v Old |
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What can Market Maps be used to identify?
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"Gaps in the Market" - Occurs when no business is currently serving the needs of customers for a particular product
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How can Businesses fill a "Gap in the Market?"
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Developing a new product.
Selling an existing product in a new place at or at a new price, or promoting it in a new way ti convince customers its what they need |
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Why might their be a "Gap in the Market?"
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Sometimes consumers do not want to buy a specific kind of product that would fit that gap
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How can the "Gap" be a great opportunity for a Business?
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If the Business get the right Marketing Mix, a gap can expand to become a large market.
But the business must be quick to till the gap - before its competitors do. |
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What is Product Range?
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A group of similar products made by a business
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What does Price sensitive mean?
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When the price is very important in the decision about whether to buy or not
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What is the aim of Firms?
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To maximise profits for their shareholders.
Firms want to be monopolies. |
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What is a Monopoly?
Where does it exist? |
A Monopoly is the only supplier of a product or service and had a dominate position is in the market - it can dictate prices to others.
It usually exits when one firm has 25% or more of the market |
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What do Consumers want?
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To buy as many goods as possible at the cheapest prices. They want markets to be competive.
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What is a Competitive Market?
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A market where there is a large number of producers selling to a large number of consumers.
Nobody is powerful enough to dictate prices prices so if a firm (business) charges more than consumers will go elsewhere - this forces the producers to be effiecent. |
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What can Competition make firms do?
How can this affect Consumers and Firms? |
Sell the same products at cheaper prices
It will mean that their is less products for consumers The lower prices will reduce firms profits making less money for development if new and better products |
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What factors can competition improve?
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Price: If there are several retailers, each retailer will lower the price in an attempt to win customers
Products range: In order to attract and satisfy customers, companies need to produce products that are superior to their competitors Customer Service: Retailers that provide customers with a helpful and friendly service will win their loyalty |
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What do Governments believe?
How can they promote this? |
The benefits to consumers of competitive markets are more important than the benefits to producers of monopoly markets.
They promote this by setting up organisayions to monitor the competition between businesses |
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What does Market Segment mean?
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Part of a marker that contains a group of buyers with similar buying habits
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How can Businesses judge their potential competition?
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Product Range
Quality Design Brand Brand Image Price |
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What is a Brand?
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A named product which customers see as being different from other products and which they can associate or identify with
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What is Brand Image?
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The idea, impression or image that customers have in their minds about the brand
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What is Added Value?
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The increased worth that a business creates for a product; it is the difference between what a business pays its suppliers and the price that is able to charge for the good/service
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What is Production?
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The business activity of using resources to make goods and services
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What ways can a business Add Value (the source)?
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Convenience - The product could be made more convenient
Speed - Customers may pay note to have a product delivered quickly Branding - Having a strong brand image is important. If the brand is well-known and trusted, customers may be happy to pay more. Brands that are seen as fashionable or 'cool' also tend to be able to charge more form their product Quality - People at often prepared to pay more for a high quality product Design - Having a good design is important. If products are more attractive, distinctive design they tend to be more desirable than basic products. Customers will be prepared to pay more for them |
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What is a Unique Selling Point (USP)?
How can it Add Value? |
A characteristic of a product that makes it different from other similar products being sold in the marker such as design, quality or image.
If the customers value the USP thsg will be willing to pay more for it. |
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What is a Franchise?
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The right given by one business to another to sell goods or services using its name.
It is a joint venture between a Franchisee and a Franchisor |
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What is a Franchisee?
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A business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor
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What is a Franchisor?
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The business that give franchisees the right to sell its product, in a return for w tidee sum of money or a royality payment
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What are the benefits of a Franchise? Why?
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Training - Franchisees usually receive training from the Franchisor. This allows the Franchise to maintain its good name and ensure that the Franchisee operates the Franchise correctly
Equipment - Most Franchises provide equiptment to Franchiees as part of the total package Materials - Franchisors sell their Franchisees some or all of the materials used in production Finding Customers - Many Franchises help new business owners find customers through national advertising. It also provides publicity materials such as posters. The brand name can adlo bring customers because they would already he aware if the business and its reputation Brand Name - Branding cab be cruical to the success of a business. Many big Franchises have regional managers that make sure the Franchisees are running the business properly and that their staff are properly changed. This helps maintain the quality that customers expect. It helps provide consitancy of customer experience wherever the Franchise is located |
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What are the disadvantages of a Franchise?
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Set up and running costs can be high
Profits have to be shared with the franchisors Their is less independence in the decision making as the Franchisee has to follow the rules set out by the Franchisor In some Franchises, the Franchisor can end the Franchise arrangements without giving any reason or pay any compensation |
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What does Enterprise mean?
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A willingness by an individual or a business to take risks, show initiative and undertake new ventures
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What does Entrepreneur mean?
What skills may they have? |
A person who owns and runs their own business and takes risks. They take advantage of Business opportunities.
Risk Taking, Showing Initiative |
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What does Risk mean?
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The chance of damage or loss occurring as a result of making a decision
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What is another term for Businesses?
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Enterprises
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What does Enterprise involve?
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Identifying business opportunities and taking advantage of them. However their is a risk of failure, but the reward is receiving a profit
Starting up a new business or helping another one expand by inputting new ideas Balancing risks against possible rewards |
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What do Entrepreneurs need to gather? Why?
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The correct resources, so they can start or expand a business
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What is a good Business idea?
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One that provides a good/service that other businesses aren't providing, but customers are willing to pay for; filling a market gap
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Where do Entrepreneurs often get their Capitol from?
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They tend to use their own but sometimes they increase this with investment from a bank
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What is a key Resources for a Business? Why?
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Captiol, to buy the equipment and pay workers.
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What will a good Entrepreneur do?
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Take calculated risks - They'll do research, plan carefully to increase the success rate and evaluate up the consequences of failure. If the risk is worth taking, the Entrepreneur will go ahead with the new business venture
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What qualities would they have?
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Thinking Ahead - to identify opportunities for the future
Initiative - to seek out or seize business opportunities drive and determination - to be motivated and turn ideas into practice Decisiveness - so they don't shy away from making tough decisions Networking Skills - to identify who van provide capitol or other resources Leadership and Persuasive - to motivate other people to support their ideas Taking Calculated Risks - and to profit from their enterpise activities Plan Carefully - to minimise the risk of failure Learn from Mistake - and to see mistakes as part of "learning to succeed" |
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What is Creative Thinking?
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The process in which entrepreneurs come up with new and unique ideas
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What can Creative Thinking result in?
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A new product
New process that cuts costs or improves quality |
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What do these ideas give a Business?
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A competitbe advantage
Help make their goods/service stand out in the Market |
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What techniques may an Entrepreneur use to improve their creative thinking?
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Lateral (Creative) Thinking - thinking differently to try and find jre and unexpected ideas
Deliberate Creativity - the intentional creation of new ideas through recognised and accepted techniques Blue-Sky Thinking - involves a participants, who are encouraged to think of as many ideas as possible about an issue or problem |
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What is part of the process of Creative Thinking?
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Business should ask the right questions, when coming up with a new idea - For example when looking at a successful product and asking - why, why not, how, where, when, what, what if?
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What Thinking technique does the 'Six Thinking Hats' relate to? Why?
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Blue-Sky Thinking as this technique involves putting ideas in paper. 'Six Thinking Hats', is a technique that helps orgainse and focus those ideas
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What is 'Six Hat Thinking'?
How do groups use this technique? |
'Six Hat Thinking' takes six different types/styles of thinking.
Groups who use this technique put on 'hats' one at a time to think about a problem |
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What are the 'Six Hat Thinking'? What do they involve?
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White Hat - thinking about facts
Red Hat - thinking about emotions and gut feelings Black Hat - thinking about the problems and difficulties of the idea Yellow Hat - thinking about the positive aspects of an idea Green Hat - Creative Thinking. It is about Lateral Thinking Blue Hat - 'thinking about thinking'. The person who organises or is managing the thinking process is engaging in Blue Hat Thinking |
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How do new Businesses come about?
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Some business ideas are developed by people who use the product
Some business ideas are developed by people who already have good understanding of their product Many business ideas are developed by research departments in medium to large companies |
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What is an Invention?
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The discovery of new processes and potential new products, typically after a period of resarch
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What is an Innovation?
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The process of transforming inventions into products that can be sold to customers
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Why are Inventions and Innovations risky?
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As many Inventions never get to the point when they are sold. Innovations also leads to failure
Also people may try to copy your Invention |
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What can Business do to protect their products from being copied?
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Apply for patents and copy rights to protect their ideas
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What other things can a Business register?
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Brand, Tradename or Trademark which prevents others from using them
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What is a Patent?
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Right it ownership of an invention or process when it is registered with the government. Anyone copying a patent idea can be taken to court and dued for damages
Patents last for a set number of years |
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What is Copyright?
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Legal ownership of intellectual property such as books, music and films which prevents others from copying them. Copyright give the right to control to produce, control and copy the works soley to the individual or company that produce the work originally
Copyrights also last for a set number of years, but they last longer that patents |
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What is a Trademark?
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The symbol, sign, or other features of a product or business that can be protected in law
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What is a Calculated Risk?
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The probability or numerical of a risk occurring in a business
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What do Businesses do when preparing to Start-up?
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Create a Business Plan
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What is a Business Plan?
What can they be used for? |
A document that outlined all aspects of the future business
Business Plans can be used to weigh up the downsides and upsides of setting up a business |
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What are Downsides?
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The disadvantages of a course of action, including what can go wrong
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What are Upsides?
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The advantages of a course of action, including what can go wrong
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