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it.","mcqOptions":[{"text":"no longer wanted","correct":true,"explanation":"Obsolescence means customers no longer want the product because a better, cheaper or more convenient replacement meets the same need."},{"text":"more expensive to produce","correct":false,"explanation":"Higher production costs may reduce profit, but they do not define obsolescence. The correct term is “no longer wanted”, because customers have moved to a superior replacement."},{"text":"difficult to advertise","correct":false,"explanation":"Weak advertising can reduce sales temporarily, but it does not mean the product is obsolete. Obsolescence occurs when it is “no longer wanted” because a replacement is preferred."},{"text":"legally protected from rivals","correct":false,"explanation":"Legal protection can preserve a product’s market position rather than make it obsolete. The correct term is “no longer wanted”, following customers’ adoption of a better alternative."}]},{"id":"22d6ebfb-4950-4c71-af04-4cee6fc23e6d","cardType":"basic","points":2,"front":"Why can a product become obsolete even though its original need still exists?","back":"Customers meet the same need differently, so they stop buying the old product.","mcqOptions":[{"text":"Customers meet the same need differently, so they stop buying the old product.","correct":true,"explanation":"The underlying need can remain, while customers use a different product or service to satisfy it. That change in behaviour makes the original product obsolete."},{"text":"different needs less often, so they stop buying the old product.","correct":false,"explanation":"Obsolescence does not require the original need to disappear or become less frequent. Customers meet the same need differently, so they stop buying the old product."},{"text":"same product more cheaply, so they stop buying the old product.","correct":false,"explanation":"Buying the same product more cheaply would not explain why the old product is abandoned. The correct explanation is that customers meet the same need differently."},{"text":"same need less successfully, so they stop buying the old product.","correct":false,"explanation":"Customers normally switch because another option meets the need more conveniently, cheaply or effectively. The correct answer is that they meet the same need differently."}]},{"id":"23f11811-eb83-4216-a000-968f4121f647","cardType":"basic","points":2,"front":"How did better technology make rented DVDs obsolete?","back":"Streaming delivered films instantly, removing the DVD's main advantage.","mcqOptions":[{"text":"Streaming delivered films instantly, removing the DVD's main advantage.","correct":true,"explanation":"Streaming used better technology to provide immediate access without visiting a shop or waiting for a disc, removing the convenience advantage that rented DVDs once had."},{"text":"Television advertising delivered films instantly, removing the DVD's main advantage.","correct":false,"explanation":"Television advertising promotes films but does not deliver them for immediate viewing. Streaming delivered films instantly, which removed the main advantage of rented DVDs."},{"text":"DVD production delivered films instantly, removing the DVD's main advantage.","correct":false,"explanation":"Producing DVDs does not make films instantly available to customers. Streaming provided immediate access and therefore made rented DVDs less convenient and increasingly obsolete."},{"text":"Cinema tickets delivered films instantly, removing the DVD's main advantage.","correct":false,"explanation":"Cinema tickets require customers to travel and watch at scheduled venues. Streaming delivered films instantly at home, removing the key convenience advantage of rented DVDs."}]},{"id":"9e713ef0-c2ce-4dfb-a001-de5158417f52","cardType":"basic","points":2,"front":"How can changing consumer wants cause obsolescence?","back":"Products designed for old preferences stop selling when customers' tastes change.","mcqOptions":[{"text":"Products designed for old preferences stop selling when customers' tastes change.","correct":true,"explanation":"Consumer wants are not fixed. When tastes change, products designed around old preferences become less attractive, so sales fall and the products may become obsolete."},{"text":"Products designed for new preferences stop selling when customers' tastes change.","correct":false,"explanation":"Products matching new preferences are more likely to attract customers. Obsolescence affects products designed for old preferences when customers’ tastes move elsewhere."},{"text":"Products designed for stable preferences stop selling when customers' tastes change.","correct":false,"explanation":"Stable preferences would support continued demand rather than cause obsolescence. Products designed for old preferences stop selling when customers’ changing tastes favour alternatives."},{"text":"Products designed for all preferences stop selling when customers' tastes change.","correct":false,"explanation":"A product serving all preferences would be less vulnerable to changing tastes. Obsolescence occurs when products designed for old preferences no longer appeal to customers."}]},{"id":"6c2d7548-3232-4f74-b1af-6caedd6530c4","cardType":"basic","points":2,"front":"How can a change in the law make a product obsolete?","back":"A legal ban can make the product unsellable, forcing customers to use an alternative.","mcqOptions":[{"text":"A legal ban can make the product unsellable, forcing customers to use an alternative.","correct":true,"explanation":"If the law bans production or sale, the product cannot legally remain on the market. Customers must then use an alternative, making the original product obsolete."},{"text":"A legal ban can make the product more profitable, forcing customers to use an alternative.","correct":false,"explanation":"A legal ban prevents lawful sale rather than making a product more profitable. It can make the product unsellable, forcing customers to choose an alternative."},{"text":"A legal ban can make the product more fashionable, forcing customers to use an alternative.","correct":false,"explanation":"Legal prohibition normally reduces availability and demand; it does not make a product fashionable. The product becomes unsellable and customers must use an alternative."},{"text":"A legal ban can make the product easier to produce, forcing customers to use an alternative.","correct":false,"explanation":"A ban restricts legal sale or production rather than simplifying production. The relevant effect is that the product becomes unsellable, so customers switch to an alternative."}]},{"id":"392260e5-1fe2-48e8-9351-fa400ff4013f","cardType":"basic","points":2,"front":"Why does a cheaper substitute push an older product towards obsolescence?","back":"Customers switch when a rival meets the same need for less money.","mcqOptions":[{"text":"Customers switch when a rival meets the same need for less money.","correct":true,"explanation":"A cheaper substitute offers customers the same benefit at a lower price. This encourages switching and reduces demand for the older product, pushing it towards obsolescence."},{"text":"Customers switch when a rival meets the different need for more money.","correct":false,"explanation":"A more expensive product meeting a different need would not normally replace the older product. The rival must meet the same need for less money."},{"text":"Customers switch when a rival meets the same need for more money.","correct":false,"explanation":"Charging more gives customers less financial incentive to switch. The substitute pushes the older product towards obsolescence by meeting the same need for less money."},{"text":"Customers switch when a rival meets the different need for less money.","correct":false,"explanation":"A cheaper product is only a direct substitute if it satisfies the same need. The correct relationship is the same need for less money."}]},{"id":"61fe5c39-6d6a-4928-9106-11ed3d806bbb","cardType":"basic","points":3,"front":"What four forces can push a product towards obsolescence?","back":"

Better technology
Changing consumer wants
Changes in the law
A cheaper substitute

","mcqOptions":[{"text":"

Better technology
Changing consumer wants
Changes in the law
A cheaper substitute

","correct":true,"explanation":"Products can become obsolete because technology improves, consumer preferences change, laws change, or a cheaper substitute appears. These four forces reduce demand for the original product."},{"text":"

Higher wages
Stable consumer wants
Changes in taxation
A larger workforce

","correct":false,"explanation":"These factors may affect business costs or operations, but they are not the four identified forces causing obsolescence. The correct forces include technology, wants, law and cheaper substitutes."},{"text":"

Better packaging
Falling consumer wants
Changes in ownership
A larger market

","correct":false,"explanation":"Better packaging and a larger market do not generally make products obsolete, while ownership changes are not a core force. The four correct forces concern technology, wants, law and substitutes."},{"text":"

More advertising
Fixed consumer wants
Changes in location
A premium substitute

","correct":false,"explanation":"Advertising, fixed wants and location changes do not form the standard explanation of obsolescence. The recognised forces are better technology, changing wants, legal changes and cheaper substitutes."}]},{"id":"f1f9b905-b12f-48b7-9d25-bbaa4696fa80","cardType":"basic","points":3,"front":"What usually happens as obsolescence develops gradually?","back":"

Sales fall
Prices are cut to maintain volume
Margins shrink
The product is withdrawn

","mcqOptions":[{"text":"

Sales fall
Prices are cut to maintain volume
Margins shrink
The product is withdrawn

","correct":true,"explanation":"Gradual obsolescence usually reduces sales first. Businesses may cut prices to preserve volume, but margins then shrink until continuing to sell the product is no longer worthwhile."},{"text":"

Sales rise
Prices are raised to maintain volume
Margins expand
The product is relaunched

","correct":false,"explanation":"Obsolescence normally weakens demand rather than increasing sales and margins. The usual sequence is falling sales, price cuts, shrinking margins and eventual withdrawal."},{"text":"

Sales remain fixed
Prices are cut to increase margins
Margins expand
The product is exported

","correct":false,"explanation":"Price cuts usually reduce margins, not increase them, and stable sales do not show gradual obsolescence. The correct sequence ends with the product being withdrawn."},{"text":"

Sales fall
Prices are raised to maintain margins
Margins shrink
The product is expanded

","correct":false,"explanation":"Businesses commonly cut prices to try to maintain sales volume, not raise them to protect margins. As obsolescence develops, the product is eventually withdrawn."}]},{"id":"ff848ae2-7e12-44b5-8f06-4ce96d576a77","cardType":"basic","points":2,"front":"Why did Blockbuster's costs remain high while its revenue fell?","back":"It still paid rent on every shop while customers switched to streaming.","mcqOptions":[{"text":"It still paid rent on every shop while customers switched to streaming.","correct":true,"explanation":"Blockbuster’s physical shops created continuing fixed costs, especially rent, even as streaming reduced customer visits and revenue. This widened the gap between costs and income."},{"text":"It still paid commission on every stream while customers switched to DVDs.","correct":false,"explanation":"Blockbuster’s problem was its physical shop network, not commissions on streaming while customers returned to DVDs. It still paid rent as customers switched to streaming."},{"text":"It still paid advertising for every film while customers switched to cinemas.","correct":false,"explanation":"Advertising was not the key unavoidable cost explaining Blockbuster’s decline. The important issue was continuing rent on every shop while customers moved to streaming."},{"text":"It still paid royalties on every download while customers switched to television.","correct":false,"explanation":"Blockbuster was not mainly burdened by royalties on downloads as customers moved to television. Its shop rents remained high while streaming took customers away."}]},{"id":"bd7da5f3-15fc-416b-8fde-5d40c9a329cd","cardType":"basic","points":1,"front":"What happened to the need for watching films at home when rental DVDs declined?","back":"The need survived; customers changed from rented discs to streaming.","mcqOptions":[{"text":"The need survived; customers changed from rented discs to streaming.","correct":true,"explanation":"People still wanted to watch films at home. The need survived, but customers adopted streaming instead of rented discs as technology offered a more convenient solution."},{"text":"The need disappeared; customers stopped watching films at home.","correct":false,"explanation":"The decline of rental DVDs did not remove the desire to watch films at home. The need survived while customers changed from rented discs to streaming."},{"text":"The need survived; customers changed from films to cinemas.","correct":false,"explanation":"Cinema viewing is not the same as watching films at home. The need survived because customers changed from rented discs to home streaming."},{"text":"The need changed; customers stopped using entertainment services.","correct":false,"explanation":"Customers did not stop seeking entertainment when rental DVDs declined. They continued watching films at home, changing from rented discs to streaming."}]},{"id":"4a2c5f8c-5a76-437b-8935-4f5d0e7d5d6c","cardType":"cloze","points":null,"front":"An entrepreneur can build on obsolescence by [ ] product that meets the old need better.","back":"An entrepreneur can build on obsolescence by selling the replacement product that meets the old need better.","mcqOptions":[{"text":"selling the replacement","correct":true,"explanation":"An entrepreneur can benefit from obsolescence by offering the new product that satisfies the old need more effectively, such as streaming replacing rented DVDs."},{"text":"repairing the outdated","correct":false,"explanation":"Repairing an outdated product may serve a small remaining market, but it does not describe selling the superior replacement. The correct fill is “selling the replacement” product."},{"text":"banning the alternative","correct":false,"explanation":"Banning alternatives would not normally create a legitimate business opportunity and does not meet the old need better. The correct approach is selling the replacement product."},{"text":"copying the original","correct":false,"explanation":"Copying the original product does not necessarily improve how the need is met. Entrepreneurs can build on obsolescence by selling the replacement product that meets the need better."}]},{"id":"bd7b43c6-710a-429d-82d3-0a333af2c412","cardType":"cloze","points":null,"front":"An entrepreneur can profit from customers changing products by [ ], such as fitting home charging points.","back":"An entrepreneur can profit from customers changing products by serving the switch itself, such as fitting home charging points.","mcqOptions":[{"text":"serving the switch itself","correct":true,"explanation":"When customers adopt a new product, businesses can provide supporting services needed during the change. Fitting home charging points is an example of serving the switch itself."},{"text":"delaying the switch itself","correct":false,"explanation":"Delaying customer adoption does not meet the new practical needs created by changing products. The opportunity is serving the switch itself, such as installing charging points."},{"text":"reversing the switch itself","correct":false,"explanation":"Reversing the change would work against customers’ new choices rather than support them. Entrepreneurs can profit by serving the switch itself with related services."},{"text":"advertising the old product","correct":false,"explanation":"Advertising the old product does not provide the infrastructure customers need when changing products. Fitting charging points is an example of serving the switch itself."}]},{"id":"1fdd31d2-aa09-4370-90f2-885712ad8f12","cardType":"cloze","points":null,"front":"An entrepreneur can serve what is left behind by selling to a [ ].","back":"An entrepreneur can serve what is left behind by selling to a loyal group with few large rivals.","mcqOptions":[{"text":"loyal group with few large rivals","correct":true,"explanation":"A declining market may still contain loyal customers who continue buying. If few large rivals serve them, a small business can focus on this remaining niche."},{"text":"new market with many small rivals","correct":false,"explanation":"A new market with many small rivals is not what remains behind after a product becomes obsolete. The opportunity is a loyal group with few large rivals."},{"text":"price-sensitive group with many large rivals","correct":false,"explanation":"Many large rivals would make the remaining customers difficult and costly to attract. A loyal group with few large rivals offers the more defensible niche."},{"text":"temporary group with no repeat customers","correct":false,"explanation":"Customers with no repeat purchases do not provide the loyalty needed to sustain a niche business. The correct target is a loyal group with few large rivals."}]},{"id":"4ffbf8d6-352d-4d97-a5e5-027a05866524","cardType":"basic","points":2,"front":"Why might a replacement business have lower costs than the business it displaces?","back":"It may avoid the old firm's shops, stock and staff.","mcqOptions":[{"text":"It may avoid the old firm's shops, stock and staff.","correct":true,"explanation":"A replacement business may use a more efficient model, such as online sales, so it does not need the old firm’s physical shops, inventory levels or workforce."},{"text":"It may avoid the old firm's customers, brand and sales.","correct":false,"explanation":"A replacement business still needs customers and sales, and may build a brand to compete. Lower costs come from avoiding shops, stock and staff."},{"text":"It may avoid the old firm's products, prices and profits.","correct":false,"explanation":"These are outcomes or commercial decisions, not the main physical costs a replacement business can avoid. The relevant savings are shops, stock and staff."},{"text":"It may avoid the old firm's advertising, demand and revenue.","correct":false,"explanation":"A viable replacement business still requires demand and revenue, while advertising may remain necessary. Its cost advantage can come from avoiding shops, stock and staff."}]},{"id":"bc943b92-b87d-451e-a37d-5f86c2bc708a","cardType":"basic","points":2,"front":"How do lower costs help a replacement business overtake an older firm?","back":"The entrant can charge less, speeding up customer switching.","mcqOptions":[{"text":"The entrant can charge less, speeding up customer switching.","correct":true,"explanation":"Lower operating costs give the entrant room to reduce prices while remaining viable. The price advantage encourages customers to leave the older, more expensive business."},{"text":"The entrant can charge more, speeding up customer switching.","correct":false,"explanation":"Higher prices would usually discourage switching unless they reflected a clearly superior benefit. Lower costs help the entrant charge less and attract customers from the older firm."},{"text":"The entrant can sell less, speeding up customer switching.","correct":false,"explanation":"Selling less does not directly persuade customers to switch and may reduce revenue. The cost advantage allows the entrant to charge less, making switching more attractive."},{"text":"The entrant can hire more, speeding up customer switching.","correct":false,"explanation":"Hiring more staff generally increases costs rather than creating a price advantage. Lower costs help the entrant charge less, which can speed up customer switching."}]},{"id":"6d78f630-c430-407c-b26e-ef9fbb63dac9","cardType":"cloze","points":null,"front":"A fall in how often repeat customers buy signals that they have found [ ].","back":"A fall in how often repeat customers buy signals that they have found another way to meet the need.","mcqOptions":[{"text":"another way to meet the need","correct":true,"explanation":"If repeat purchases become less frequent, customers may have adopted a different product or service that satisfies the same need. This is a warning sign of possible obsolescence."},{"text":"a stronger desire to buy the product","correct":false,"explanation":"A stronger desire would normally increase purchase frequency rather than reduce it. Falling repeat purchases suggest customers have found another way to meet the need."},{"text":"a higher price for the product","correct":false,"explanation":"A higher price can reduce purchases, but this clue specifically indicates customers have found an alternative way to satisfy the need. That alternative signals obsolescence."},{"text":"a shortage of competing products","correct":false,"explanation":"A shortage of alternatives would usually leave customers more dependent on the original product. Falling repeat purchases suggest they have found another way to meet the need."}]},{"id":"f35afb55-0597-4a42-98c8-5f81de4e0422","cardType":"cloze","points":null,"front":"If sales hold only when the price is cut, [ ] even if sales volume remains steady.","back":"If sales hold only when the price is cut, revenue per unit falls even if sales volume remains steady.","mcqOptions":[{"text":"revenue per unit falls","correct":true,"explanation":"A price reduction lowers the amount earned from each sale, so revenue per unit falls even when the number of units sold stays unchanged."},{"text":"cost per unit rises","correct":false,"explanation":"A price cut does not automatically increase production cost per unit; it reduces income from each sale. The correct conclusion is that revenue per unit falls."},{"text":"profit per unit rises","correct":false,"explanation":"Keeping sales volume steady does not offset the lower selling price for each unit, so profit per unit cannot be assumed to rise. The correct term is revenue per unit falls."},{"text":"market share per unit falls","correct":false,"explanation":"Market share measures a business’s proportion of total sales, not the income earned from one product. The price cut means revenue per unit falls."}]},{"id":"fdacf60d-195a-4f41-a8c7-6d5c05aacb79","cardType":"basic","points":2,"front":"Why is a new technology becoming affordable a warning sign for an existing product?","back":"It is the point when ordinary customers can switch to the new technology.","mcqOptions":[{"text":"It is the point when ordinary customers can switch to the new technology.","correct":true,"explanation":"When new technology becomes affordable, it is no longer limited to early adopters. Ordinary customers can switch, making the existing product more vulnerable to obsolescence."},{"text":"It is the point when only large businesses can switch to the new technology.","correct":false,"explanation":"Affordability for only large businesses would not yet threaten most sales. The warning sign is that ordinary customers can switch to the new technology."},{"text":"It is the point when suppliers can switch to the new technology.","correct":false,"explanation":"Supplier adoption alone does not show that customers will abandon the existing product. The important warning is that ordinary customers can switch to the new technology."},{"text":"It is the point when competitors must switch to the new technology.","correct":false,"explanation":"Competitors may adopt technology without customers changing their buying habits. Obsolescence becomes a warning when ordinary customers can switch to the new technology."}]},{"id":"ce332ce8-1b4a-4f10-befc-da6aa7148978","cardType":"basic","points":2,"front":"Why does a law with a deadline warn a business about obsolescence?","back":"It gives a date by which the product will become unsellable.","mcqOptions":[{"text":"It gives a date by which the product will become unsellable.","correct":true,"explanation":"A legal deadline creates a definite point after which the business may no longer sell the product. This makes the risk of obsolescence clear and time-bound."},{"text":"It gives a date by which the product will become unprofitable.","correct":false,"explanation":"A law may prohibit sales rather than merely reduce profit. The deadline warns that the product will become unsellable by a specified date."},{"text":"It gives a date by which the product will become unpopular.","correct":false,"explanation":"Legal deadlines concern what may legally be sold, not whether customers like the product. The correct warning is that the product will become unsellable."},{"text":"It gives a date by which the product will become unavailable.","correct":false,"explanation":"The product might remain available in stock but still be illegal to sell. The deadline identifies when it will become unsellable, not simply unavailable."}]},{"id":"41ff3794-a275-4f09-afdb-e6fd8866342d","cardType":"basic","points":2,"front":"Why do younger customers never buying a product signal continuing decline?","back":"The decline will continue as older customers stop buying.","mcqOptions":[{"text":"The decline will continue as older customers stop buying.","correct":true,"explanation":"If younger customers are not replacing older buyers, the customer base is ageing without replenishment. Sales are likely to keep declining as older customers stop buying."},{"text":"The decline will continue as older customers increase buying.","correct":false,"explanation":"Older customers buying more would support sales rather than explain continuing decline. The likely pattern is that sales fall as older customers stop buying."},{"text":"The decline will continue as younger customers increase buying.","correct":false,"explanation":"Increasing purchases by younger customers would replace lost older buyers and slow decline. The signal is that older customers will eventually stop buying without younger replacements."},{"text":"The decline will continue as competitors stop selling.","correct":false,"explanation":"Competitors stopping sales could reduce market choice and potentially help the business. Continuing decline is signalled by older customers stopping buying when younger customers never enter the market."}]},{"id":"ca7e7ce4-e8c9-4213-a673-673760027a13","cardType":"basic","points":2,"front":"Why does obsolescence create an opportunity for entrepreneurs?","back":"It leaves customers with a proven need and money to spend on a replacement or related service.","mcqOptions":[{"text":"It leaves customers with a proven need and money to spend on a replacement or related service.","correct":true,"explanation":"Obsolescence removes an existing solution while leaving the underlying customer need. Entrepreneurs can meet that proven demand with a replacement product or a related service."},{"text":"It leaves customers with a proven need and money to spend on a luxury or unrelated service.","correct":false,"explanation":"Customers are likely to spend on solving the need created by obsolescence, not on something unrelated. The opportunity is for a replacement or related service."},{"text":"It leaves customers with a proven need and money to spend on a cheaper version of the obsolete product.","correct":false,"explanation":"A cheaper version may still fail if the original product is legally or technologically obsolete. Entrepreneurs should offer a replacement or related service that meets the continuing need."},{"text":"It leaves customers with a proven need and money to spend on a competitor’s existing product only.","correct":false,"explanation":"Obsolescence can create space for new solutions, rather than restricting customers to an existing competitor. The opportunity is to provide a replacement or related service."}]}]}],"examCountdown":{"examDate":"2027-05-12","paperLabel":"Paper 1"},"heading":"1.1.1b Why new business ideas come about: obsolescence","title":"1.1.1b Why new business ideas come about: obsolescence Flashcards","topbar":{"backHref":"/gcse/business/edexcel/flashcards"},"topicSidebar":"$L39"}]}],"topicId":"8e4a1a3c-3d5d-4625-8a39-e2a75bbc58a4","walled":"$L3a"}],"$L3b","$L3c"]