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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. 1.2.1Business ownership types

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

    2. 1.2.2Business size characteristics

      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. 1.2.3Business organisation forms

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

  3. 1.3 Classification of businesses

    1. 1.3.1

      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. 1.4.1

      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. 1.5.1Globalisation

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

    2. 1.5.2Importance and growth of multinationals

      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. 1.5.3Exchange rate calculation

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

    4. 1.5.4Impact of exchange rate changes

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

  6. 1.6 Government objectives and policies

    1. 1.6.1Government spending

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

    2. 1.6.2How governments affect business activity

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

    3. 1.6.3Effects of interest rates on businesses and consumers

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

  7. 1.7 External factors

    1. 1.7.1

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

  8. 1.8 What makes a business successful?

    1. 1.8.1Measuring success in business

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

    2. 1.8.2Reasons for business failure

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