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...

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...