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1.1.1

Enterprise lesson

AS Level 1.1: Enterprise & Business Activity

Cambridge International 9609 | Strategic Foundation

AO1: Knowledge

Precision Definitions

AO2: Application

GreenGen Context

AO3: Analysis

Chain of Consequence

AO4: Evaluation

Strategic Judgment

The Boardroom Brief: GreenGen Ltd

📊 The Strategic Context

Company Profile

GreenGen Ltd manufactures solar-powered phone chargers in a rapidly growing renewable energy market.

The Entrepreneur: Sarah Chen

Investment: $50,000 life savings
Risk: Personal bankruptcy if business fails
Ownership: 100% equity stake

The Intrapreneur: Tom Martinez

Role: Product Development Manager
Proposal: "Pro" version with fast-charging capability
Funding: Company R&D budget ($20,000)
Risk: Job security if project fails

Current Operations

Material Costs: $15 per unit (Plastic $5, Solar Panel $10)
Selling Price: $50 per unit
Monthly Production: 500 units
Recent Profit: $10,000 available for reinvestment

🎯 Strategic Concepts

Adding Value

The difference between the price of the finished product and the cost of inputs involved in making it.

Formula: Selling Price - Material Costs

Factors of Production

Land: Natural resources
Labour: Human effort & skills
Capital: Manufactured resources (machines)
Enterprise: Risk-taking & organization

Opportunity Cost

The benefit of the next best alternative foregone when making a decision.

Risk vs Uncertainty

Risk: Can be calculated (e.g., 20% chance of rain)
Uncertainty: Cannot be quantified

📋 Key Takeaways: Enterprise & Business Activity

Core Definitions (AO1):

  • • Adding Value: Selling Price - Input Costs
  • • Entrepreneur: Starts NEW business with own capital
  • • Intrapreneur: Innovates WITHIN existing business
  • • Opportunity Cost: Benefit of next best alternative foregone

Strategic Application (AO2-AO4):

  • • Added value can increase via price OR cost strategies
  • • Risk profiles differ: bankruptcy vs job loss
  • • Every decision involves trade-offs (opportunity cost)
  • • Context matters: GreenGen operates in renewable energy market

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