Edexcel Business A Level Revision

Global merger - is an agreement between two companies from different countries to join forces permenantly. They will become a MNC and these types of merger are likely to increase the power of the new business. Joint Venture - a separate business entity created by two or more parties acting as a collective tp set up a new business venture, involving shared ownerships, returns and risks. Patents -  a government authority or licence conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention. Reasons for a global merger or joint venture; Spreading risk Entering new market/trade bloc Acquiring national/international brand name/patents Securing resources/supplies Maintaining/increasing global competitiveness. SPREADING RISK OVER DIFFERENT COUNTRIES/REGIONS By operating in a number of countries, a business reduces the risk associated with one individual country. This is because all countries will ...

Production - A process of workers combining various material inputs and know-how in order to make something for consumption by the customer, known as the output. Production can also be defined as the total amount of output produced in a time period. The more that can be produced in a specific period of time, the more efficient the business becomes in using its resources. There are 9 factors that have to be considered when assessing a country as a production location; Costs of production Skills and availability of labour force Infrastructure Location in trade bloc Government incentives Ease of doing business Political stability Natural resources Likely return on investment COSTS OF PRODUCTION In highly competitive mass markes, having low costs of production will be a significant advantage. This means low wage cost will see FDI to the country in order to take advantage of the labour force and its low wage costs. This allows businesses to drive costs down, allowing the...

Tactical decision - A short-term response by a business to opportunities or threats. Strategic decision - A long-term plan of action to achieve business aims and objectives Strategic decisions on human resources may include long term plans to build up a workforce, for example hiring more staff to build cars on a production line. This scenario would impact on both the physical and financial resources of the business as it is likely it would have to invest in new machinery (physical) and train and house the new employees to ensure they were productive (financial). All this takes a great deal of planning and time, so cannot be easily reversed.

Portfolio analysis is a method of analysing a business' product according to their potential. It is based on the Boston matrix, which assesses each product in terms of the market growth in its segment plus its market share. It can be used to priorities resources such as cash to put behind its marketing spending. It may also be the starting point for selling off some brands to focus on others. The aim is to provide a framework for a business to look at the opportunity cost of investing in its different product, for example where to spend limited marketing budget for the greatest return. This can be developed into international portfolio analysis, which can look at a country's attractiveness, for example market size, compared with its strength, for example market share. For more on Boston Matrix, go to... http://edexcelbusinessalevel.blogspot.co.uk/2017/01/product-portfolio-boston-matrix.html

Maximum capacity - the maximum amount of output achievable if all resources are fully utilised. Capacity Utilisation - measures what proportion or percentage of the theoretical maximum possible outcome is actually produced. Under - utilization of capacity - means that some resources are not being used and production is not as high as it could be Over - Utilisation - means that the business is trying to produce more than its capital equipment was design for Unit costs - TOTAL COSTS (FC + VC) / CURRENT OUTPUT Within an individual business, capacity utilisation shows how much of the company's resources are actually in use. If all available resources, all labour, machinery and space are in use at any one time, the business cannot produce any more output and is said to be at 100% capacity utilisation. In the long run capacity CAN BE INCREASED by acquiring more resources e.g. bigger premises, more machinery, introducing a 3rd shift In the long run capacity CAN BE REDUCED...