Edexcel Business A Level Revision

Competitive advantage -  A sustainable advantage over the competitors in the long term, gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher price. Specialisation - When a business concentrates on a product or task and in many cases means producing only a small number of products. Specialisation is particularly important when competing in international markets as it can create a competitive advantage for the business and act as a barrier to stop others from entering the market. Specialisation increases output as economic units become more effective and efficient in what they produce due to: Greater understanding of the requirements of production Each economic unit can specialise in what they are best at Efficient use of time as there is no switching between tasks Technical economies of scale such as capital equipment is used to produce goods and services The increased output can...

Zero based budgeting - means no budget is set and no money is allocated to cover costs. Managers must be prepared to bid for and justify spending on their departments. This forces them to examine all their costs. Advantages of Zero based budgets Disadvantages of Zero based budgeting Resources should be allocated more efficiently Can be more expensive Easier to adapt as circumstances change Can be more time consuming Gives more flexibility in response to changes in the market or economy Forceful managers may be more successful in attracting funds than others who may have more worthwhile projects Forces managers to think and plan more carefully Because of the expense, some businesses use zero-based budgeting every few years, or use a mixture of zero and historical e.g. departments receive a base budget and have to negotiate the rest.