Edexcel Business A Level Revision

Porter's Five Force analysis - A tool to analyse five competitive forces that affect a market and the intensity of competition within a industry or market. Barriers to entry - The obstacles that a business has to face when it is considering competing in an exisiting market It considers the threat of new entrants to a market the bargaining power of suppliers the bargaining power of customers the threat of substitute products the degree of competitive rivalry amongst exisiting competitors. It attempts to provide a simple way to look at all the relevant issues related to the changing competitive environment in which a business operates. Five Forces can be used by a business currently in a market to assess the security of its market position. Or it can be used by a business thinking of entering a market. THREAT OF NEW ENTRANTS Refers to the potential effect of a new business entering the market, presuming that it will gain market share and rivalry will increase. T...

Growth rate - is the rate at which a nation's gross domestic product (GDP) changes/grows from one year to another Gross Domestic Product - The total value of output (goods and services) produced in the UK in a particular time period, used to measure change in economic activity. Emerging economies - An economy with incomes that are growing but are still quite low. Such countries constitute approximately 80% of the global population and represent about 20% of the world's population. BRIC economies - The economies of Brazil, Russia, India and China, which are at a similar stage of economic development. Exchange rates - The price of one currency in terms of another Purchasing Power Parity (PPP) - Allows for differences in the cost of living in different countries, which gives more realistic comparisons of GDP According to the Office for National Statistics, the UK economy has grown by an average of 2.2% every year since 1956. However, emerging economies such as China an...

Growth - A common corporate objective which means expanding the sales revenue of a business, probably in the hope that profits will increase too. Another aim is to achieve increased market share and brand recognition, which overlap gently with increased market power. Increased market share gives greater control today and higher brand recognition gives greater influence over what will happen to the business in the future

Growth - A common corporate objective which means expanding the sales revenue of a business, probably in the hope that profits will increase too. A business will aim to achieve greater market power, which gives it more control over its future, including a greater ability to increase prices. Greater dominance over customers means pricing control ; greater dominance over suppliers gives increasing power to keep purchasing costs down. This allows the business to gain a competitive advantage.

Organisations often need to adapt to their culture for reasons including takeovers or mergers, growth and changes in the market. Difficulties with changing the culture include staff loyalty to exisiting relationships, the failure to accept the need for change, insecurity, loss of power, loss of skills, break-up of work groups and different individual views of how the change should be managed.  Furthermore, there can be an alienation of suppliers, customers and other stakeholders.

Role culture - A business where power depends on the person's status or role in within the business; normally businesses with a high level of detailed rules on how people should interact. Clear rules and procedures result in a clear hierarchy (Bureaucratic relationship) where the organisation functions based on each individuals role within a clearly defined structure. The organisation has a tall structure with long chains of command. Personal power is frowned upon, with allocation of work and responsibility more important than individuals personalities. Benefits include offering employees security and the opportunity to acquire specialist skills, and good employee performance yields appropriate pay and promotion rewards. Drawbacks include the culture being frustrating for ambitious employees and it is overly bureaucratic, which leads to slow-decision making. Power culture - Usually a strong culture in a business that comes from the center and concentrates power among a small nu...