The Role of Business Enterprise Explained | Examples From Gymshark - YouTube

In this video we’re going to investigate the role of business enterprise by looking

at what the purpose of a business is and what the role of an entrepreneur is.

Throughout examples will be given from Gymshark and their CEO Ben Francis.

If you are studying business or starting a business, then its important to know the role

business plays and what business exist to do.

Basically, what is the point of a business?.

There are many roles businesses play but for the purpose of this video we are going to

concentrate on the 3 most fundamental.

Which are:

To produce goods or provide a service

to meet the needs of the customer

And finally to add value What do each of these look like in more detail.

Businesses exist to either produce goods or provide a service.

The aim is to create a good or provide a service that he customer wants or needs.

A successful business will provide a good or a service in the hopes of making a profit

from doing so.

As such, the purpose of business activity is to provide goods and services that customers

want, at a price that they are willing to pay.

Goods are tangible items a business makes to sell to customers or other businesses.

Examples of goods are wide ranging from iPhones and headphones to Gym wear & machinery.

Most physical things you can think of are goods, that at one time were produced by a

business and then sold.

Services are intangible meaning that a service does not physically exist.

For example having your haircut is a service but you are not purchasing a physical product

you are paying a business to use the skills they have to cut your hair.

You do not walk away with a product or own anything but have saved time and used someone

else's skills that you do not have in exchange for your money.

Other service include: Internet access

Insurance products Cleaning

Gymshark's role is to provide goods to their customers in the form of gym clothing and

athletic gear.

The business makes a profit by meeting the needs of their customers and because the business

has done this effectively people are willing to pay higher prices and this in turn makes

Gymshark a successful and profitable business.

How does a business meet customer needs?

Once you know the product or service you are going to offer to customers the next role

of business is to meet the needs of the customer.

If the customers needs are not met with the businesses product or service then it will

be unsuccessful as customers have no reason to buy what you are selling.

Successful businesses provide consumers with goods or services that meet their needs.

This can be done through specific features of the product, the quality, the price, or

added extras that come along with buying the product such as same day or next day delivery

or a premium shopping experience, the one you would expect when buying a high end car.

Meeting customer needs is a vital part of turning a business idea into a profitable

business.

Gymshark are customer centred and it is one of the reasons for their success.

In 2015 their website crashed during a black friday sale and the CEO personally hand-wrote

2500 apology letters to customers who were affected along with discounts.

The customers needs are important to gymsahrk and is at the heart of their stay humble hashtag.

They have managed to meet customer needs by sticking to a very and well understood target

market of 18 to 25 year olds with a love of fitness and fashion.

They have never strayed away from this target market which has meant they have a great understanding

of the clothing they want which is both fashionable and functional.

They understand that their customers needs are to look good whilst working out and have

been successful in meeting this need.

Most importantly Gymshark have managed to make the brand culturally relevant making

customers feel fashionable in their brand through influencer marketing and making this

age groups most famous influencers Gymshark athletes.

Gymshark athletes wear and promote the brand across a variety of social media platforms

that are used by Gymshark customers.

This again has helped them meet the needs of the customer who will psychologically feel

better wearing clothes that people they admire and follow also wear.

Making them feel good in their clothes.

All this is wrapped up in high quality customer service and it being at the heart of Gymshark

but also Ben Francis’s philosophy from the start making them a brand customers trust

and value.

The final role of business is to add value.

In my opinion if this is done correctly then this is what can result in huge monetary success.

This process of adding value is taking a good or service and making it more appealing to

the target customer.

When a product is more appealing then the customer is willing to pay more for the product.

When a business does successfully add value then it makes customers more willing to pay

a premium price to acquire the product or use the service.

The more value you can add the more potential profits there are to be made.

For example a Fish & Chip shop adds value to potato's by sourcing, cutting and frying

the potato and making chips.

They then charge the customer for the value they have added to a raw potato.

Yes a customer can replicate what the fish and chipshop has done to some degree.

But the customer expects better quality than they can produce at home, they are also paying

fo the convenience of not having to make the product themselves and having chips that are

ready to eat.

The fish and chipshop is adding value and therefore make a profit from selling these

items.

A business can add value in a variety of ways through; convenience, branding, quality, design

and USP.

I believe Gymshark add value through doing all of these things!

Convenience – This one is as simple as selling their products online directly from them on

their website.

There is no confusion and it is convenient and simple.

The customer can purchase online and sit at home waiting for their delivery.

They can even get next day delivery which again takes the waiting time out of their

purchase.

Gymshark also offer a 90 days return policy and have drop off points to make returns as

simple and convenient as possible for the customer.

Branding – Like I mentioned earlier in the customer needs section.

Branding is a key contributor to Gymshark's success and is undoubtably where they add

a massive amount of value to their products.

Branding encourages customers to pay more for a product that can be very similar in

quality to competitors but is now worth more because of what the logo is associated with.

Gymshark have built a network of influencers (Gymshark athletes) that make the brand desirable

to the target market.

Similar products are available from other brands yet Gymshark has managed to build a

billion dollar brand via excellent targeted branding.

They have added value to the brand by associating it with successful fitness professionals and

people that customers admire and trust which in turn makes customers trust the brand and

makes them willing to pay more for the items Gymshark produces.

(to learn more about there branding success then have a look at our video on market segmentation

at Gymshark which is linked above).,

Quality – this is another way a business can add value.

Just look at Marks and Spencer's compared to Aldi.

Each sell food but one adds value and charges more for the promise of better quality.

If the customers believes this to be true then they will pay higher prices for that

added value of quality.

This is similar to Gymshark but tends to be harder to see in clothing than in food.

Gymshark produces clothing that is good quality but at higher prices than brands such as Primark

and Boohoo, because they charge more than competitors they need to deliver on quality

as this is an expectation from the customer.

Design - The features that a product has or the way that it is presented can add value.

Gymshark add value this way by having different collection that all have products within them

that have different features to other collections.

For example their adapt collection is designed to be flexible, comfortable with a lighter

feel.

Whereas their energy collection is designed for high intensity workouts and comes with

features such as sweat wicking material, seamless materials and breathable fabrics.

Despite these design differences they are just gym clothes at a basic level but Gymshark

have been able to add value by differentiating them through the design and features that

they have.

This leads to Unique selling point (USP) A unique selling point is something that makes

a good or service stand out from the competition.

These features of the adapt collection for women and the 315 seamless range for men are

marketed to give Gymshark clothing a USP and designed to differentiate them from the run

of the mill gym clothing brand.

They have added value by saying yes other brands produce gym wear but ours is different.

If you want these collections, designs, materials and fashionable products then you can only

get them form us.

Gymshark have managed to add value in many ways and is why the business is now valued

at over 1 billion dollars.

Why be an entrepreneur, & what role do entrepreneurs play?

an entrepreneur: organises resources, makes business decisions, takes risks.

Taking risks in the hopes of making financial gain can be a key reason for someone wanting

to be an entrepreneur.

Often working for someone is seen as a safe bet.

As there are no financial risks with being employed as there can be with entrepreneurship.

You don’t invest money into employment just time in exchange for an hourly wage or salary.

In the case of an entrepreneur they are investing their time and money and putting that money

at risk in the hopes of making more money and having more freedom than they would in

employment.

Often times and entrepreneur needs to take a risk to get started, whether that is leaving

their current job to pursue a business idea, dropping out of university as many successful

entrepreneurs have done or putting personal savings at risk to purchase items for the

start up.

Each of these carry a degree of risk.

Ben Francis started Gymshark with his own savings and later dropped out of university

to pursue entrepreneurship.

He took a risk in the hopes of becoming a successful entrepreneur.

Another role of an entrepreneur is to organise resources.

They bring together things such as; land, labour & capital in order to create something

of their own.

They use the resources they have access to create a new company.

Initially Gymshark owner Ben Francis manufactured his gym clothing in his parent’s garage

on a made-to-sell basis using a sewing machine and screen printer he purchased with his savings.

He brought together the resources he had in terms of machineary, equipment, his labour

and an investment from his savings to create Gymshark.

Now Gymshark employs hundreds of people and this labour is used to produce goods on a

much larger scale than Ben initially did in his parent garage.

He has used these things to create something of his own and provide goods to over 180 countries

worldwide.

Finally entrepreneurs need to make business decisions.

Hopefully good decisions.

These decisions will help the business grow, ben decided what to produce, how much to produce,

whether to sell direct to consumer, whether to invest in a larger hq and initially whether

to drop out of university to put more time and effort into the business.

These decisions are part of being an entrepreneur.

Not all decisions will be correct but unlike employment the decisions are down to the entrepreneur

and the more good decisions made ultimately result in great business success.

Gymshark is now a global brand and this willingness to take a risk, organise resources and make

good business decisions has resulted in Gymshark becoming a major brand, employing 100s of

staff, having headquarters in the UK and USA and being valued at over 1 billion dollars.

The risk of pursuing entrepreneurship certainly seems to have paid off for Ben Francis of

Gymshark.

Thanks for watching the video we really do appreciate you watching to the end and if

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