The Purpose of Business Activity
- The purpose of business activity can be broadly defined as the activities that businesses engage in to produce goods or services that meet customer needs while adding value
The purpose of business activity is to take inputs, add value to them, and create products which meet customer needs
To produce goods or services
- The primary purpose of business activity is to produce goods or services that satisfy a need or demand in the market
- Goods are physical products, such as bicycles and T-shirts
- Services are non-physical items such as hairdressing, tourism and manicures
Meeting customer needs
- The ultimate goal is to create products that meet the needs and preferences of customers and provide value to them
- By meeting customer needs, businesses can build customer loyalty, increase brand awareness, and generate revenue
To add value
- The third purpose of business activity is to add value to products or services
- Value-added features can differentiate products from competitors, create a unique selling point, and increase customer satisfaction
- E.g. a product that is easier to use, has a better design, or is of higher quality than competitors can create a competitive advantage for a business