Edexcel Business A Level Revision

The changing competitive advantage  means that most markets are continually evolving, with businesses entering and leaving the market. In every market businesses are trying to keep at the cutting edge of product development and changes in customer tastes and fashions. The competitive environment or market structure involves all the external factors that either compete with  or have an impact on a business.  It is constantly changing, it is dynamic and a business that fails to monitor these changes and take action  runs the risk of losing market share or even failure. Direct competitors – Businesses are likely to have direct rivals who produce very similar products and  services, Domino competes directly with Papa John’s, Nationwide with Halifax, Asda with Tesco and so on.  They are competing for the same consumer and will try to find more effective ways of competing. Indirect competitors – are not direct rivals but they are competing for the sam...

PESTLE - is a method used to analyse external influences on a business, in particular Political, Economic, Social, Technological, Legal and Environmental influences. External environment - is all of those factors outside of their control of a business that will impact on its day to day operations, decision making and strategies. Fiscal Policy - They ways the government can adjust spending and taxation to influence the national economy Monetary policy - The ways the government, via the Bank of England, can alter how much money is circulating in the economy and the level of interest rates to create stable prices and a set inflation target. PESTLE can be used by a business to make the most of factors that are seen as beneficial and minimise the impact of factors that have a negative impact. The advantage of PESTLE is that like SWOT it can help identify area of opportunity and threat. A disadvantage is that time and money need to be spent gathering data to perform the analysis. Un...

Stakeholder - a person, group or organisation that has interest or concern in the activities or decision making of a business. Shareholders - defined as any person, company or other institution that owns at least one of a company's shares. They're often one of the source of finance for the business; their financial risk is limited to the value of their shareholding. STAKEHOLDER INFLUENCES The stakeholder concept suggests that a business' responsibilities are towards all of its stakeholders. Therefore the business must consider all of its stakeholders in it decisions and objectives, for example consult with stakeholders before making strategic decisions. They must also treat stakeholders fairly e.g. prompt payment to suppliers, fair pay and conditions for employees, as well as addressing the business' impact on the wider community such as environment footprint. Stakeholder influences should be seen as a genuine concern and not just a PR exercise.  Stakeholders ...

Evidence-based (scientific-based) decision making - where a business makes strategic decisions after analysing and evaluating relevant evidence. Businesses will make full use of quantitative sales forecasting, decision trees, investment appraisals and other methods that help quantify any decision being made. Subjective decision making - is less structured and more about the experience and intuition of the business's owners and managers. Decisions from this perspective may require a more entrepreneurial, risk-taking managerial approach. Subjective Evidence-Based Based on intuition, hunch, gut feeling and experience Based on evidence and data Quicker decisions can be made Outcomes can be simulated or tested in advance May be necessary in a fast moving environment or to avoid missing opportunities Decisions are objective Dominant leaders may push decisions forward, leading to a ...

Interest Rates - is the price of borrowed money. Getting a loan will mean repaying with interest. If you borrow £10,000 at an interest rate if 5%, the repayment will, by the end of the year, be £10,000 + £500 (5%) i.e. £10,500. Interest rates vary depending on the level of risk involved in the loan. At any one time there are a variety of different interest rates operating within the external environment; for example: Interest rates on savings in bank and other accounts Borrowing interest rates Mortgage interest rates (housing loans) Credit card interest rates and pay day loans Interest rates on government and corporate bonds   Interest rates increase… Interest rates decrease… ·        Businesses are less likely to borrow money expand ·          Investment may increase; existing businesses may expand ·        ...