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1 - Business activity and influences on business

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  1. 1.1 Business objectives

    1. 1.1.1Business objectives

      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.

    2. 1.1.2Changing business aims and objectives

      Why business aims and objectives change as businesses evolve: • in response to market conditions, technology, performance, legislation, internal reasons.

  2. 1.2 Types of organisations

    1. The main types of business ownership: • sole trader • partnerships • limited companies (private and public) • public corporations.

    2. 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.

    3. Different forms of business organisation: • franchises • social enterprises • multinationals.

  3. 1.3 Classification of businesses

    1. 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.

  4. 1.4 Decisions on location

    1. 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.

  5. 1.5 Business and the international economy

    1. Globalisation: • concept of globalisation • opportunities and threats of globalisation for businesses.

    2. 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.

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

    4. The impact of exchange rate changes: • on international competitiveness • on importers and exporters.

  6. 1.6 Government objectives and policies

    1. Government spending: • to provide public service • taxation and constraints on public spending.

    2. How governments can affect business activity: • infrastructure provision • legislation • trade policy - membership of trading blocs, tariffs.

    3. The effect of interest rates on: • businesses • consumer spending.

  7. 1.7 External factors

    1. The external factors affecting business decisions: • social • technological • environmental • political.

  8. 1.8 What makes a business successful?

    1. Measuring success in business: • revenue • market share • customer satisfaction • profit • growth • owner/shareholder satisfaction • employee satisfaction.

    2. Reasons for business failure: • cash flow problems/lack of finance • not competitive • failure to adapt to changes in the market.