The Dynamic Nature of Businesses
Business: Edexcel GCSE, topic 1.1.1
Why Do New Business Ideas Come About?
New business ideas come about because of the dynamic (changing) nature of business:
Technology
- Changes in technology can lead to new product ideas that were not before possible.
- For example, 10 years ago Virtual Reality would not have been possible before, but due to advances in technology it now is.
Changes in consumer wants
- A lot of ideas are thought up as a way to satisfy customers' wants.
- When customers' wants are changing, new business ideas are thought up to satisfy these new wants.
- For example, GTech designed a cordless vacuum to fulfil customer wants.
Products and services becoming obsolete
- Technological advances can mean that certain products and services become obsolete. This can lead to new ideas.
- For example, the DVD became almost obsolete because people could watch TV/movies online and the blu-ray became more popular.
How Do New Business Ideas Come About?
There are 2 types of ideas for new businesses. Some people have original ideas and build completely new products and some people adapt existing products.
Original ideas
- Original ideas have not been thought of before. They are usually very different from anything else that is currently on the market (for sale).
- The introduction of autonomous cars is an example of this.
- These products are thought up because there is a gap in the market.
Adapting existing products (or services)
- These new ideas make changes to current products to improve them in a way that no one had thought of before.
- New technology may make the adaptations possible.
- For example, Dyson didn’t come up with the idea of a vacuum cleaner, but he did adapt (change) the design to improve how it worked. Dyson's dual cyclone vacuum cleaner was designed to not need a replaceable bag, whilst not losing suction.
Test yourself on The Dynamic Nature of Businesses
What changes lead to new ideas?
What are the 2 types of ideas for new businesses?
Which of the following statements is true?