BTEC Level 3 Business

Unit 7: Business Decision

Making

A1 – Business Ideas
Learning Outcomes

1. Identify the source of business ideas and the

development of businesses over time.

2. Analyse the impact of trends and competitors on a

business over time

3. Evaluate how businesses adapt to changing

economic climates.
Where do Business Ideas Come From?
Hundreds of thousands of people take the plunge and start up their own
businesses every year. This can be for a variety of reasons, including;

• An identification of a gap in the market

• Analysing the current level of competition within the market

• Analysing current trends and taking advantage of them

• Analysing the likely demand for the product/service and deciding it will be
worthwhile to go into business
Task
If you could set up any business you wanted, what would you
create? Create a graphical representation of your business,
including;

• The name of the business

• The product/service offered
• Why you have chosen this type of business
• How will you segment the market?
• Which trends will you take advantage of?
• How is your business unique?
• Who would compete against you?
• How likely is it that this business will succeed?
Gaps in the Market
A gap in the market arises through research or
opportunity. A gap in the market is a customer need that
is currently not being offered.

Many new businesses, or extensions of existing ones,

emerge in this way. An example of this is
Genius Gluten Free, who are now worth over £10m

• What opportunities in the last decade have helped

businesses identify gaps in the market?

• What new markets are emerging at the moment? How are

businesses responding to these gaps?

• What are the benefits and drawbacks of attempting to fill a

gap in the market?
Competitors
Competitors, if not monitored, have the potential to overtake you
in the market. Most businesses have some form of competition
associated with them.

Mini task – List 10 large companies and their main competitors,

how do they manage to stay on top of their competitors?

Market trends can create competitive markets. The

rise of artisan coffee has created a highly competitive high street
market (Starbucks, Costa Coffee, Café Nero etc.)

One of the most competitive markets is the

Supermarket industry
Current Trends
A business idea can emerge when a gap in the market arises
due to current trends. A growing market worldwide is the
labour saving devices (robot) market. This has seen a rise in
businesses developing and selling household robots.

Trends are heavily influenced through pop culture and more

recently, social media influencers.

Social Media Influencers

What are the current trends this year?

How do you know about these trends?

How long do you think these trends will be around for?

Likely Demand
Business ideas can also arise by anticipating a likely
demand for a product or service. This is influenced by a
number of factors, including;

• Success in events (Olympics, World Cup etc.)

• Government intervention (sugar tax)

• Global concerns (Global warming/ocean pollution)

• Lifestyle changes (veganism)

Developing Business
A business develops over time from a ‘start-up’ to a
well established business with a proven track record
of success.

We are going to explore how a business develops

while considering the following factors;

• Changes in the economic climate

• Trends

• Diversification
Changes in the Economic Climate
Changes in the economic climate drives and influences how a
business develops over time.

Does the UK have an appropriate infrastructure to support our

growing population/economy?

Factors such as the availability of raw materials will effect how a

business operates, why is this?

Legislation such as the Sugar Tax affects the business

environment – What will a business need to do to adapt to these
changes?

Many supermarkets, such as M&S, have adapted to the recession

by offering ‘Dine in for Two’ promotions to bring luxury, romantic
meals to people with lower incomes.
 11

Task
In small groups, research a business from each of the following sectors;

• Supermarkets

• Entertainment

• Financial Services

Identify how the business has adapted to changes in the economic

environment, evaluating how successful they have been at doing this.
Provide evidence through sources such as news articles.
Trends
Industries such as Fashion are heavily influenced
by trends within the market.

The Fashion industry effects other

industries/businesses. Can you think of what they
will effect?

Ocado, a completely online retailer, responded to

the customer demand for convenient “armchair
shopping” This has now grown to a significant
offering from supermarkets.
Diversification for Survival

Diversification can be forced onto a business for

the sake of survival in a challenging market.

Several businesses, such as Blockbuster Video

and Woolworths have fallen victim to not
diversifying their offering to customers, leading to
the businesses collapsing.

Businesses in niche markets may be criticised

and lose customers if they diversify, why is this?