Edexcel Business A Level Revision

SWOT analysis - An investigation conducted by a business to identify internal strengths and weaknesses and external opportunities and threats within the business, its resources and its environment. S trengths W eaknesses O pportunities T hreats AIM = to discover what the business does better than the competition, what competitors do better, whether the business makes the most of opportunities available and how the business should respond to changes in the external environment. Internal strengths and weaknesses   The business must prioritise those that are important to success. For example, brand image, sales and revenue, market shares and capacity utilisation. They are internal so are within the control of the business They relate to the present situation Strengths = Things the business is good at, giving them a clear advantage over rivals. Distinctive capabilities and resources are also strengths which will help the business achieve its objectives. They also help to ...

Break even - is the point at which a business is not making a profit or a loss i.e. it is just breaking even. Break even output - Is the number of items that a business must sell to reach this point. Contribution - The contribution is the difference between the sales revenue and the variable cost of each unit sold or made. SELLING PRICE - VARIABLE COSTS Margin of Safety - is how much actual/current output is above the break even level of output Profit - ( MAX OUTPUT - Break even) x contribution or TR - TC Loss - TC - TR At break even point total costs must be the same as total revenue TR = TC  Before reaching break-even, the business is performing at a loss . After reaching break even, each additional unit sold will contribute towards a profit . CONTRIBUTION When a sale comes in, the sales revenue will be the amount the item was sold at - selling price. This amount will then be used to cover its own variable costs that went in to making the pro...