The Role of Business Enterprise
Business: Edexcel GCSE, topic 1.1.3
What Purpose do Businesses Serve?
Businesses supply goods, services or a combination of both.
Goods
- Goods are physical products such as a PlayStation console or Coca Cola soft drinks.
Services
- Services are non-physical actions performed by a business to help a customer.
- Snapchat is an example of this; they provide a digital platform for people to send photos to one another. They don’t actually provide a physical good (except Spectacles - do they even exist anymore?).
Goods and services
- Some businesses provide both goods and services.
- Restaurants, for example, provide goods in the form of physical food but also services in the form of waiters and waitresses and an atmosphere where customers can enjoy their meal.
B2B and B2C
- It is also important to note that some businesses sell products or services to customers (B2C – business to customer) while others sell to other businesses (B2B – business to business).
- DHL sells logistics (delivery and supply chain) support to other businesses like Jaguar Land Rover.
What Do Businesses Do?
Businesses can serve either customers’ needs or wants. Some businesses are called distributors - they buy products from manufacturers and sell them onto businesses or customers.
Customers' needs
- Customers' needs are the things that people can't live without.
- For example, Severn Trent provides water to people's homes in the United Kingdom.
Customers’ wants
- Some businesses exist to serve customers’ wants. They don’t need these products and services but want them.
- E.g. television, jewellery or parties.
Test yourself on The Role of Business Enterprise
Which of the following can businesses sell to customers?
Snap Inc (Snapchat) is a business that provides what?
If someone wants to rent an apartment for a party, does Airbnb serve customers' wants or needs?
What are customers' needs?
What do most businesses in the UK try to serve primarily?