Edexcel Business A Level Revision

Production - A process of workers combining various material inputs and know-how in order to make something for consumption by the customer, known as the output. Production can also be defined as the total amount of output produced in a time period. The more that can be produced in a specific period of time, the more efficient the business becomes in using its resources. There are 9 factors that have to be considered when assessing a country as a production location; 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 COSTS OF PRODUCTION In highly competitive mass markes, having low costs of production will be a significant advantage. This means low wage cost will see FDI to the country in order to take advantage of the labour force and its low wage costs. This allows businesses to drive costs down, allowing the...

Market attractiveness - A measure of the potential value of a particular market in a country. It can include short-term or long-term profit and growth rate of the market. A range of tools can be used to assess market attractiveness for a country, such as the Boston Matrix, PESTLE and Porter's Five Forces. Disposable income - the total income of an individual has available to spend after paying income taxes and the addition of benefits. Ease of doing business - how accessible markets are for a business Infrastructure - the physical systems that a country (or business) require to operate efficiently Political Stability - an absence of excessive fluctuations in the economy. There are several key issues to consider when assessing the market attractiveness, for example; Levels and growth of disposable income Ease of doing business Infrastructure Political stability Exchange rate LEVELS AND GROWTH OF DISPOSABLE INCOME Changes in disposable income are believed to have...

A key difference between offshoring and outsourcing is that the offshored element of the business is still part of the same global business but outsourcing means a completely separate business takes over the work. Offshoring - When a company moves various operations to another country for reasons such as lower labour costs or more favourable economic conditions in that other country. The key reasons for this is cost minimisation as the production process can be undertaken at a reduced costs in comparison to the domestic economy. Closeness to market will reduce transport costs for businesses and might allow for easier access to consumers, particularly if operating in the country being targeted e.g. Jaguar Land Rover have set up production in China. As well as this they will take advanatge of economies of scale from operating in larger international markets and having access to more specialised suppliers and services.  However, offshoring includes the fact that public and emp...