1 - Business activity and influences on business

Businesses can have several objectives:

• financial aims and objectives - survival, profit, sales, market share, financial security
• non-financial aims and objectives - social objectives, personal satisfaction, challenge, independence and control.

Why business aims and objectives change as businesses evolve:

• in response to market conditions, technology, performance, legislation, internal reasons.

The main types of business ownership:

• sole trader
• partnerships
• limited companies (private and public)
• public corporations.

Characteristics relating to size:

• concepts of risk, ownership and limited liability
• public corporations – reasons for and against public ownership
• ownership, control, sources of finance, use of profits, stakeholders and shareholders
• appropriateness of different forms of ownership.

Different forms of business organisation:

• franchises
• social enterprises
• multinationals.

Primary, secondary and tertiary activities:

• primary sector – extracting raw materials from the earth
• secondary sector – converting raw materials into finished or semi-finished goods
• tertiary sector – provision of a wide variety of services.

The main factors influencing location decisions and relocation of a business:

• proximity to market, labour, materials and competitors
• nature of the business activity
• the impact of the internet on location decisions - e-commerce and/or fixed premises
• legal controls and trade blocs.

Globalisation:

• concept of globalisation
• opportunities and threats of globalisation for businesses.

The importance and growth of multinationals:

• benefits of a business becoming a multinational
• benefits to a country and/or economy where a multinational company is located
• possible drawbacks to a country and/or economy where a multinational is located.

Calculate exchange rates in business contexts, including relevant percentages and percentage changes.

The impact of exchange rate changes:

• on international competitiveness
• on importers and exporters.

Government spending:

• to provide public service
• taxation and constraints on public spending.

How governments can affect business activity:

• infrastructure provision
• legislation
• trade policy - membership of trading blocs, tariffs.

The effect of interest rates on:

• businesses
• consumer spending.

The external factors affecting business decisions:

• social
• technological
• environmental
• political.

Measuring success in business:

• revenue
• market share
• customer satisfaction
• profit
• growth
• owner/shareholder satisfaction
• employee satisfaction.

Reasons for business failure:

• cash flow problems/lack of finance
• not competitive
• failure to adapt to changes in the market.