Edexcel Business A Level Revision

Foreign Direct Investment (FDI) - The transfer of funds by a foreign business to purchase and acquire physical capital,  such as factories and machines. TRADE OPPORTUNITIES Opens up new markets which increases wealth in countries such as China who want western brands British provenance (" the place of origin or earliest known history of something. "). For example, fashion, finance, cars, arts, education etc. Additionally, BRICS countries can help with supplying materials and resources to British companies to help their provenance. Access to raw materials Greater movement of goods and services between countries Opportunities for cheaper production and therefore cheaper unit costs Greater investment opportunities such as Foreign Direct Investment (FDI) Increased profits for businesses. Trade opportunities will arise in new markets leading to an increase in demand and increased revenue and profit. The owners of businesses will see and increase in income e.g. through hi...

Dynamic markets - Markets which are constantly changing. The environment is dynamic, for example buyers may choose to buy less of one product and more of another. It can grow, change and decline very quickly Some markets are quite stable and change little over time. For example, the market for Kelloggs cornflakes has changed very little, although there are far more competing products than there were when they were invented in 1894. Market size and market share do not change much and there is little innovation. Other markets are far more dynamic, subject to rapid and continuous changes. All businesses must adapt to the changing nature of their markets. Reasons for dynamic markets constantly changing: Social trends Changes in technology Competitiveness Trends Consumer tastes Fashion Rising/Falling incomes Arrival of a superior product offered by competition External shocks Business have to adapt their marketing in response to these changes... If they do not keep up, the...

Pricing is often one of the most difficult things to get right in business. There are several factors a business needs to consider in setting a price: COMPETITORS – a huge impact on pricing decisions. The relative market shares (or market strength) of competitors influences whether a business can set prices independently, or whether it has to follow the lead shown by competitors COSTS – a business cannot ignore the cost of production or buying a product when it comes to setting a selling price. In the long-term, a business will fail if it sells for less than cost, or if its gross profit margin is too low to cover the fixed costs of the business. THE STATE OF THE MARKET FOR THE PRODUCT ( SUPPLY AND DEMAND) – if there is a high demand for the product, but a shortage of supply, then the business can put prices up. THE STATE OF THE ECONOMY (EXTERNAL SHOCKS) – some products are more sensitive to changes in unemployment and workers wages than others. Makers of luxury pr...

Demand  curve (for a good or a service) - the quantity that customers are willing and able to buy at a given price in a given period of time. Demand - the willingness and/or ability of consumers to purchase goods at a given price ☆ BASIC LAW OF DEMAND ☆ Demand varies inversely with price - lower prices make products more affordable for consumers. Causes of Changes in Demand • PRICE - For more (normal goods), a fall in price should result in an increase in demand. The extent of the change depends on the price elasticity of demand. • INCOMES   - As incomes rise, demand should normally rise. However, for inferior goods, demand will fall as consumers choose better alternatives that are now affordable. The extent of the change depends on the income elasticity of demand. • FASHIONS, TASTES & PREFERENCES - Demand for products that are fashionable or trendy will experience sharp fluctuations • ADVERTISING & BRAND - A key purpose of advertising and br...