1. Identify at least three challenges when setting up a business. Explain why they are challenges.
There are many challenges to a business. Three main challenges may be capital, demographics and human resources are three challenges that am entrepreneur may face when setting up a business. Funding is very important and in order for the structure to take flight, it has to have a good amount of capital. For some businesses loans are an option while others search for a venture capitalist that gives them proper funding. While not the only reason failure happens, capital is usually the catalyst that plays the detrimental role. A lack of insufficient funding can cause no start up or a slow start up and limit business planning a development. It can also cause high debt, which affects business ownership. This could cause a layoff of employees and make them seek other places of employment simply because there is not enough profit to support the works and keep the business afloat. One main purpose of a business is to gain profit, which directly affects its success.
2. Define what a “niche” product is. Give at least three examples of niche products.
A niche product is a product made and marketed for use in a small and specialized but profitable market. Rolls Royce’s Ghost is a high-end exclusive vehicle that incorporates fine British engineering and advanced state of the art technology. The market for this car is small and geared to the wealthy. Chauffeurs mostly drive it. Abercrombie & Fitch’s cologne Fierce is mostly for young men. Vera Wang’s bridal gown the Eleanor is for wealth and petite women.
3. Explain why a niche company might have an advantage in a market. Would price necessarily be an advantage? Explain why or why not.
A niche company might have an advantage in a market because its products are very unique and custom made. Rolls Royce is a perfect example of a company’s advantage in the automobile market. Just its...