Businesses, Competition, and New Ideas

Topics

1. 1.1 What Is a Business?What a business is, how it creates and captures value, and the customers it serves.
2. 1.2 Markets and Competitive AdvantageHow markets work and how a business builds an advantage that competitors cannot easily copy.
3. 1.3 PESTEL Factors and the Business EnvironmentThe political, economic, social, technological, environmental, and legal forces that shape a business from the outside.
4. 1.4 How Do Business Ideas Originate?Where business ideas come from, the risk of bringing a product to market, and the design-thinking process.
5. 1.5 VisionCore values, vision and mission statements, and the goals of businesses, social enterprises, and nonprofits.
6. 1.6 Business EthicsHow businesses encourage ethical behavior and how leaders respond to ethical dilemmas.
7. 1.7 Organization, Roles, and ResponsibilitiesTypes of business organization, and how large businesses structure leadership and specialized departments.
8. 1.8 Supply ChainsHow goods move from raw materials to the customer, and how strategy shapes supply chain decisions.

The snack box

A student buys candy in bulk at a supermarket and sells it bar by bar in a school corridor. Across Unit 1 that backpack turns into a real operation: a rival arrives and destroys his pricing, a campus ban destroys his market, and he rebuilds at a weekend soccer league with a pre-ordered snack box for teams. By the end of the unit he has values, a partner, written rules, a permit, and a supply chain that reaches another hemisphere.

The candy seller, the student who founds the business and runs it from a backpack, then a cooler · The cousin, the helper who works Saturdays and becomes a partner in 1.7 · The rival seller, the second student who opens a competing backpack at a lower price in 1.2 · The new principal, the authority whose campus food ban closes the corridor market in 1.3 · The wholesale parent, the supplier who offers cheap bulk stock and an unreliable van · The cookie parent, the artisan producer selling hand-decorated cookies at the park in 1.8

1. He buys a twenty-bar box for ten dollars and sells each bar for a dollar fifty in the corridor, capturing a dollar a bar. One buyer would have paid two dollars, so the buyer keeps fifty cents of benefit too.

   A business of any size produces and distributes products, and value creation and value capture are two different things. · 1.1

2. A second student opens at a dollar twenty-five with identical bars. Three days of undercutting settle the corridor at one dollar, halving his capture. He escapes the price fight by adding cold drinks no rival carries.

   Buyers and sellers pushing against each other set a market price, and differentiation is how a business leaves a pure price contest. · 1.2

3. A notice bans all food sales on campus, and one decision from outside the market ends the contest both sellers were fighting. He runs the six factors over a weekend soccer league instead and finds five in his favor and one permit standing in the way.

   Outside forces settle which firms can survive in a market, and the framework converts them into a checklist. · 1.3

4. Watching the sideline, he writes down three problems in a notebook. Twenty parent interviews later, seventeen describe the same halftime scramble, so he tests one pre-ordered snack box on one team. Seven families order against a hypothesis of five.

   Design thinking validates the problem first and the idea second, while the mistakes are still cheap. · 1.4

5. Two offers arrive the same week: a funded candy-only cart that would drop the fruit families asked for, and the league's far field table that pays less and runs on trust. He writes three values on the cooler lid and takes the far field.

   Core values and core competencies decide which opportunities a business pursues, and vision and mission put both in writing. · 1.5

6. A week of chocolate spoils in a hot car and the damage is invisible until after purchase. Concealing it earns about forty dollars, disclosing it earns about fifteen. He sells the melt bars at half price under a hand-written sign.

   Leaders total the gains and losses for each stakeholder group, or resolve the tie with the vision. · 1.6

7. The cousin asks for half the profit and a handshake makes them partners. A parent asks who pays if the cooler lid breaks a phone, and neither of them knows, because the handshake divided the profits and never mentioned the debts.

   Legal structure fixes ownership and who answers for the debts, while roles fix who performs the work. · 1.7

8. Counting stock on a Sunday, he traces one bar backwards through a supermarket, a distributor, a warehouse, a factory, and a cocoa farm in another hemisphere. He splits his own order between a cheap unreliable supplier and a dependable one, and notices that his vendor permit is an exclusive agreement.

   A supply chain runs from raw materials to the customer, and the competitive advantage strategy a business chose decides how it builds one. · 1.8

What is free and what is paid

• Free: every lesson video, the notes, worked examples, the glossary, this unit’s story and the diagnostic.
• Free with an account: progress tracking and saved flashcard state.
• Paid: the unit question bank with every wrong answer explained, the FRQ scoring guides, and the common-mistakes layer.

The unit cheat sheet covers 7 sections, and this unit is 20-30% of the exam.