Pearson Edexcel International A Level Business (432) Assessment of a country as a production location a) Factors to consider: • costs of production • skills and availability of labour force • infrastructure • location in trade bloc • government incentives • ease of doing business • political stability • natural resources • likely return on investment. Written by Sarah Hilton for Revisionstation

This is an essay planning sheet for Edexcel A level business but it’s in Word so it could be adapted to any board. I use these at revision time with U6 students together with past papers and the model marked answers. They use these to plan answers to the longer questions and it helps to cement the techniques for exams of using the case study as evidence to support their points.

2.3.1 Planning a business and raising finance 2 INTERNAL FINANCE This complete lesson will include: a) Owner’s capital: personal savings b) Retained profit c) Sale of assets This lesson is written by Sarah Hilton at Revisionstation

This lesson includes a PowerPoint and a worksheet and covers: a) Calculation of sales volume and sales revenue b) Calculation of fixed and variable costs Written by Sarah Hilton for Revisionstation

2.3.1 Profit a) Calculation of: o gross profit o operating profit o profit for the year (net profit) b) Statement of comprehensive income (profit and loss account): o measuring profitability: calculation of gross profit margin, operating profit margin, and profit for the year (net profit) margin o ways to improve profitability c) Distinction between profit and cash 2.3.2 Liquidity a) Statement of financial position (balance sheet): o measuring liquidity: calculating current ratio and acid test ratio o ways to improve liquidity b) Working capital and its management: the importance of cash 2.3.3 Business failure a) Internal and external causes of business failure: o financial factors o non-financial factors

2.2.1 Sales forecasting a) Purpose of sales forecasts b) Factors affecting sales forecasts: o consumer trends o economic variables o actions of competitors c) Difficulties of sales forecasting 2.2.2 Sales, revenue and costs a) Calculation of sales volume and sales revenue b) Calculation of fixed and variable costs 2.2.3 Break-even a) Contribution: selling price – variable cost per unit b) Break-even point: o total fixed costs + total variable costs = total revenue c) Using contribution to calculate the break-even point d) Margin of safety e) Interpretation of break-even charts f) Limitations of break-even analysis 2.2.4 Budgets a) Purpose of budgets b) Types of budget: o historical figures o zero based c) Variance analysis d) Difficulties of budgeting

a) Market mapping b) Competitive advantage of a product or service c) The purpose of product differentiation d) Adding value to products/services

a) Product and market orientation b) Primary and secondary market research data (quantitative and qualitative) used to: identify and anticipate customer needs and wants quantify likely demand gain insight into consumer behaviour c) Limitations of market research, sample size and bias d) Use of ICT to support market research: websites social networking databases e) Market segmentation

2.1.1 Internal finance a) Owner’s capital: personal savings b) Retained profit c) Sale of assets 2.1.2 External finance a) Sources of finance: o family and friends o banks o peer-to-peer funding o business angels o crowd funding o other businesses b) Methods of finance: o loans o share capital o venture capital o overdrafts o leasing o trade credit o grants 2.1.3 Liability a) Implications of limited and unlimited liability b) Finance appropriate for limited and unlimited liability businesses 2.1.4 Planning a) Relevance of a business plan in obtaining finance b) Interpretation of a simple cash-flow forecast and calculations based on changes in the cash-flow variables c) Use and limitations of a cash-flow forecast

1.5.1 Role of an entrepreneur a) Creating and setting up a business b) Running and expanding/developing a business c) Innovation within a business (intrapreneurship) d) Barriers to entrepreneurship e) Anticipating risk and uncertainty in the business environment 1.5.2 Entrepreneurial motives and characteristics a) Characteristics and skills required b) Reasons why people set up businesses: o financial motives: profit maximisation and profit satisficing o non-financial motives: ethical stance, social entrepreneurship, independence and home working 1.5.3 Business objectives a) Survival b) Profit maximisation c) Other objectives: o sales maximisation o market share o cost efficiency o employee welfare o customer satisfaction o social objectives 1.5.4 Forms of business a) Sole trader, partnership and private limited company b) Franchising, social enterprise, lifestyle businesses, online businesses c) Growth to PLC and stock market flotation 1.5.5 Business choices a) Opportunity cost b) Choices and potential trade-offs 1.5.6 Moving from entrepreneur to leader a) The difficulties in developing from an entrepreneur to a leader

Pearson Edexcel International A Level Business (331) 2 Theories of corporate strategy a) Development of corporate strategy: • Ansoff’s Matrix • Porter’s Strategic Matrix. b) Aim of portfolio analysis. c) Effect of strategic and tactical decisions on human, physical, and financial resources. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (332) 1 Growth a) Objectives of growth: • economies of scale (internal and external) • increased market power over customers and suppliers • increased market share and brand recognition • increased profitability. b) The distinction between inorganic and organic growth. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (332) 2 Organic growth a) Methods of growing organically. b) Advantages and disadvantages of organic growth. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (331) 4 Impact of external influences a) PESTLE (political, economic, social, technological, legal and environmental). b) The changing competitive environment. c) Porter’s five forces. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (331) 3 SWOT analysis a) SWOT analysis • internal considerations: strengths and weaknesses • external considerations: opportunities and threats. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (333) 1 Quantitative sales forecasting a) Calculation of time-series analysis: moving averages (three period/four quarter). b) Interpretation of scatter graphs and line of best fit: extrapolation of past data to future. c) Limitations of quantitative sales forecasting techniques. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (333) 3 Decision trees a) Construct and interpret simple decision-tree diagrams. b) Calculations and interpretations of figures generated by these techniques. c) Limitations of using decision trees. Written by Sarah Hilton by Revisionstation

Pearson Edexcel International A Level Business (333) 2 Investment appraisal a) Simple payback. b) Average (accounting) rate of return. c) Discounted cash flow (net present value only). d) Calculations and interpretations of figures generated by these techniques. e) Limitations of these techniques. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (332) 4 Problems arising from growth a) Diseconomies of scale. b) Internal communication. c) Overtrading. Written by Sarah Hilton for Revisionstation

Pearson Edexcel International A Level Business (332) 3 Inorganic growth a) Mergers and takeovers: • reasons for mergers and takeovers • distinction between mergers and takeovers • horizontal and vertical integration • conglomerates • financial risks and rewards. b) Advantages and disadvantages of inorganic growth. Written by Sarah Hilton for Revisionstation