Edexcel Business A Level Revision

Pull factors - are those that attract a business to a global market. These may include lower levels of competition or an untapped market or customers. Pull factors are the opportunities a business may see for expansion into a foreign market. The factors are linked to the foreign market in which the businesses wishes to operate. Economies of scale are present when unit costs fall as output rises. Globalisation has meant a rise in opportunities for international businesses to reduce unit costs by increasing sales volumes to new and emerging markets, thus being able to buy the raw materials to make the products in bulk. Businesses have also moved production to new markets where costs such as wages are significantly cheaper than in their domestic market. Risk spreading is a benefit from moving into markers in order to reduce dependence on the home market. A wet summer in Britian does not worry Wall's ice cream as it sells ice cream in lots of overseas markets. Therefore they nega...

Push factors - are those that force a business to leave the market in which they currently operate to look for new income streams in the future e.g. operating in a different market. Often businesses look to another country when operations in their current market become difficult. This can include a saturated market or products coming to the end of their product lifecycle. These are mainly reasons a business has to want to grow outside of the domestic country in which it currently operates. Saturated markets are the point at which a market is no longer generating new demand and decline in sales revenue for a firm's products, due to competition, decreased need, obsolescence or alternatives. Businesses will look for growth in overseas markets where there are similar characteristics, for example demographic trends and GDP per capita and where sales revenue will rise again. An example of a UK saturated market is the grocery market, where Tesco attempted to expand into China, Thaila...

Risks - in business are factors that are not expected but can be quantified, such as the risk of your factory being flooded. Uncertainty - is being unsure of the factors influencing sales and therefore being unable to predict what will happen to the business in terms of its profits or growth. A business might try to minimise uncertainty by using marker research to anticipate the likely its decisions will have on its position in the market.

Sales forecast - is an estimation of future sales that may be based on previous sales figures, sales volumes, trends, market surveys and trends or managerial estimates. The purpose of this for the following categories are: Finance Inform cash-flow forecasts i.e. how much money can the business expect to flow in from sales.(sales will directly affect cash inflow and so any change in future sales will alter the cash flow and so any change in future sales will alter the cash flow forecast and the level and availability of working capital) Predict sales volume and sales revenue Assess ability to break-even Help set budgets (if sales are forecasted to increase, the business will need to increase departmental budgets for production and distribution) Profit and Loss forecast (future sales will have a direct bearing on this) People Plan workforce needs for: Sales team Seasonal staff in stores or distribution Peak times Operatives to ensure supply meets demand (the...

Working capital - is the cash needed to pay for the day to day trading of the business. Working capital "oils the wheels" of business. Businesses use cash to finance stocks through the production process It facilitates the smooth flow of production and the supply of goods to customers. In financing debtors, it enables the business to offer credit to customers. The amount of working capital needed depends on... The planned production volumes Forecast cost per unit The length of the production cycle Credit terms allowed to customers Credit terms received from suppliers. A lack of working capital means... Harder to buy in bulk and benefit from discounts Difficulties in offering credit to customer with the danger of losing sales Loss of reputation with suppliers if there are difficulties in settling debts Harder to respond to opportunities Increased danger of overtrading Dealing with working capital shortages... Discount prices Reduce purchases Negotiat...

Two factor theory - concept that employee satisfaction is related to factors which motivate, and factors which can cause dissatisfaction (hygiene factors) Hygiene factors can demotivate employees if absent causing job dissatisfaction. Employees will only turn up to work if their hygiene factors are being fulfilled. These must be satisfied before any attempt is made to improve motivation. Once Hygiene factors have been fulfilled, a business can then start to use Motivating factors to increase the motivation of its employees. They can be a mixture of non-financial and financial rewards. JOB ENRICHMENT Job enrichment attempts to give employees greater responsibility by increasing the range and complexity of tasks they are called upon to complete and giving them the necessary authority. It motivates by giving employees the opportunity to use their abilities to the fullest. He believed that job enrichment was an important motivator because it allows the job to have more dep...