Urban Outfitters Essay

Submitted By jmal1k
Words: 565
Pages: 3

Urban Outfitters Continuing Case Study Part: Creating a Business
Courtney L. Patrick
D. Lynn Bertsch, PhD, MBA
Introduction to Business, BUS 100
October 31, 2010

1. Identify at least three challenges when setting up a business. Explain why they are challenges. Form or Type of Business, Liabilities and Taxes, and Profits.
-It is very important to an entrepreneur to think about what form or type of business that he or she is going to chose before entering into a business. The reason behind each individual decision determines liabilities and taxes incurred.
-Liabilities will affect you depending on the type or form of business chosen. For example, a Sole Proprietor has unlimited liability, risking their own personal assets. Depending on the form or type of business, you may be double taxed, individually taxed, or either taxed high or low upon net income generated throughout the quarter/year.
-Your profits are also determined based on the type of business chosen. For example, a Corporation accrues more profits than other form of businesses but they also accrue more expenses.

2. Define what a “niche” product is. Give at least three examples of niche products.
-A niche product is a subset of a specialized product created by an individual or individuals.
-A Hybrid Vehicle
-Android Cellular Phones (Smartphone)
-iPAD

3. Explain why a niche company might have an advantage in a market. Would price necessarily be an advantage? Explain why or why not.
-One advantage that a niche company may have in a market is loyal customers. For example, when a customer purchases products from Saks, price doesn’t matter when quality and uniqueness plays a role. Because of customer satisfaction, you don’t have to find these customers, they come to you. I think that price would be an advantage because quality products are expensive. Customers that are very wealthy do not look at the price, they see distinct and creative products and they buy them. A niche product sells itself.
4. Identify and explain three reasons why customers would pay more for exclusivity.
-The fact of limiting the