1.1a The Purpose and Nature of Business

To provide goods and services

Goods are physical objects, e.g. a sandwich. A service is something done for you, e.g. cutting your hair.

To fill a gap in the market

Where a business provides a product or service which nobody else does.

Case study: Nintendo

• Nintendo was started in 1889. It produced hand-made playing cards.
• By 1953, customers wanted plastic cards featuring Disney characters, so Nintendo changed its core products to suit the changed market, but this was short-lived.
• By the mid-1960s, playing card popularity had declined — people wanted toys made using new plastic-moulding techniques. So Nintendo moved to producing toys.
• In 1970, Nintendo releases Japan’s first electronic toy — a "beam gun". Improving technology and customer tastes increase demand, and in 1971 Nintendo adapted their "beam gun" to be used with the Magnavox Odyssey, an early video game system. Similar products followed.
• The 1973 worldwide oil crisis resulted in a shortage and massive price increases of plastic. Nintendo moved away from making toys.
• In 1978, rival video game company Taito releases the hugely popular Space Invaders. Customer interest is focussed on arcade games. Not to be outdone, Nintendo releases its own arcade machines a year later. In 1981, it releases Donkey Kong to huge success.
• 1983 sees the release of the Nintendo Entertainment System (NES). Over the following decades, Nintendo releases various systems with upgraded specifications, building a strong reputation for quality games, including the best-selling Game Boy in 1989.
• By 2006, Nintendo is technologically outclassed by rivals Sony and Microsoft. Instead of trying to compete with the graphics of PlayStation and Xbox, Nintendo releases the Wii — it's unique motion-controlled interface and family-friendly games are popular with "casual" gamers, but not "core" gamers.
• The follow-up to the Wii, the Wii U, is launched. The product is designed to appeal to "core" gamers. It was mis-understood by customers and is considered a commercial failure.
• Following the Wii U’s failure, the Switch is launched in 2017. It builds on the success of the Wii and DS range of successful hand-held consoles.
  As you can see, Nintendo has adapted its business many times to suit changing customer preferences, technological progress, competition, and global affairs.