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Edexcel-A-Level-Business-Advance-Information-
QUANTITATIVE AND NUMERICAL SKILLS
Quantitative / Numerical Skills PAPER 1 Themes 1&
PAPER 2
Themes 2&
PAPER 3
Synoptic QS1: calculate, use and understand ratios, averages and fractions QS2: calculate, use and understand percentages and percentage changes QS3: construct and interpret a range of standard graphical forms QS4: interpret index numbers QS5: calculate cost, revenue, profit and break-even QS6: calculate investment appraisal outcomes and interpret results QS7: interpret values of price and income elasticity of demand QS8: use and interpret quantitative and non-quantitative information in order to make decisions QS9: interpret, apply and analyse information in written, graphical and numerical forms
TOPIC SUMMARY BY PAPER
Topic PAPER 1 Themes 1&
PAPER 2
Themes 2&
PAPER
Synoptic 1.1.1 THE MARKET Characteristics of mass and niche markets Market size and market share Brands Online retailing How markets change Innovation and market growth Adapting to change How competition affects the market Difference between risk and uncertainty 1.1.2 MARKET RESEARCH Product and market orientation Primary and secondary market research data Limitations of market research, sample size and bias Use of ICT to support market research Market segmentation 1.1.3 MARKET POSITIONING Market mapping Competitive advantage of a product or service Purpose of product differentiation Adding value to products / services 1.2.1 DEMAND Changes in the prices of substitutes Changes in consumer incomes Fashions, tastes and preferences Advertising and branding Demographics External shocks Seasonality 1.2.2 SUPPLY Changes in the cost of production Introduction of new technology Indirect taxes Government subsidies External shocks 1.2.3 MARKETS Interaction of supply and demand Supply and demand diagrams 1.2.4 PRICE ELASTICITY OF DEMAND (PED)
Themes 1& Themes 2&
PAPER
Synoptic Types of training 1.4.3 ORGANISATIONAL DESIGN Structure (hierarchy, chain of command, span of control, centralised & decentralised) Types of structure (tall, flat, matrix) Impact of different organisational structures on business efficiency & motivation 1.4.4 MOTIVATION IN THEORY AND PRACTICE Importance of employee motivation to a business Motivation theories (Taylor, Mayo, Maslow, Herzberg) Financial incentives to improve employee performance (piecework, commission, bonus, profit share, performance-related pay) Non-financial techniques to improve employee performance (delegation, consultation, empowerment, team working, flexible working, job enrichment, job rotation, job enlargement) 1.4.5 LEADERSHIP Distinction between management and leadership Types of leadership style (autocratic, paternalistic, democratic, laissez-faire) 1.5.1 ROLE OF AN ENTREPRENEUR Creating and setting up a business Running and expanding / developing a business Innovation within a business (intrapreneurship) Barriers to entrepreneurship Anticipating risk and uncertainty in the business environment 1.5.2 ENTREPRENEURIAL MOTIVES AND CHARACTERISTICS Characteristics and skills required Reasons why people set up businesses (financial & non-financial) 1.5.3 BUSINESS OBJECTIVES Survival Profit maximisation Other objectives (sales maximisation, market share, cost efficiency, employee welfare, customer satisfaction, social objectives) 1.5.4 FORMS OF BUSINESS Sole trader, partnership and private limited company Franchising, social enterprise, lifestyle businesses, online businesses Growth to PLC and stock market flotation 1.5.5 BUSINESS CHOICES Opportunity cost Choices and potential trade-offs 1.5.6 MOVING FROM ENTREPRENEUR TO LEADER Difficulties in developing from an entrepreneur to a leader 2.1.1 INTERNAL FINANCE
Themes 1& Themes 2&
PAPER
Synoptic Owner’s capital: personal savings Retained profit Sale of assets 2.1.2 EXTERNAL FINANCE Sources of finance (family & friends, banks, peer-to-peer funding, business angels, crowd funding, other businesses) Methods of finance (loans, share capital, venture capital, overdrafts, leasing, trade credit, grants) 2.1.3 LIABILITY Implications of limited and unlimited liability Finance appropriate for limited and unlimited liability businesses 2.1.4 PLANNING Relevance of a business plan in obtaining finance Interpretation of a simple cash flow forecast & calculations based on changes in the cash-flow variables Use and limitations of a cash-flow forecast 2.2.1 SALES FORECASTING Purpose of sales forecasts Factors affecting sales forecasts (consumer trends, economic variables, actions of competitors) Difficulties of sales forecasting 2.2.2 SALES, REVENUE AND COSTS Calculation of sales volume and sales revenue Calculation of fixed and variable costs 2.2.3 BREAK-EVEN Contribution (selling price – variable cost per unit) Break-even point Using contribution to calculate break-even point Margin of safety Interpretation of break-even charts Limitations of break-even analysis 2.2.4 BUDGETS Purpose of budgets Types of budget (historical figures, zero-based) Variance analysis Difficulties of budgeting 2.3.1 PROFIT Calculation of profit (gross, operating, net) Measuring profitability (gross profit margin, operating profit margin, net profit margin) Ways to improve profitability Distinction between profit and cash
Themes 1& Themes 2&
PAPER
Synoptic Competition policy Health & safety 2.5.3 THE COMPETITIVE ENVIRONMENT Competition and market size 3.1.1 CORPORATE OBJECTIVES Development of corporate objectives from mission statement / corporate aims Critical appraisal of mission statements / corporate aims 3.1.2 THEORIES OF CORPORATE STRATEGY Ansoff’s Matrix Porter’s Strategy Matrix Aim of portfolio analysis Achieving competitive advantage through distinctive capabilities Effect of strategic and tactical decisions on human, physical and financial resources 3.1.3 SWOT ANALYSIS Internal considerations: strengths and weaknesses External considerations: opportunities and threats 3.1.4 IMPACT OF EXTERNAL INFLUENCES PESTLE (political, economic social, technological, legal and environmental) Changing competitive environment Porter’s Five Forces 3.2.1 GROWTH Objectives of growth (economies of scale, increased market power, increased market share and brand recognition, increased profitability) Problems arising from growth (diseconomies of scale, internal communication, overtrading) 3.2.2 MERGERS AND TAKEOVERS Reasons for mergers and takeovers Distinction between mergers and takeovers Horizontal and vertical integration Financial risks and rewards Problems of rapid growth 3.2.3 ORGANIC GROWTH Distinction between inorganic and organic growth Methods of growing organically Advantages and disadvantages of organic growth 3.2.4 REASONS FOR STAYING SMALL Small business survival in competitive markets (product differentiation and USPs, flexibility in responding to customer needs, customer service, e- commerce) 3.3.1 QUANTITATIVE SALES FORECASTING Calculation of time-series analysis (moving averages – 3 period / 4 quarter)
Themes 1& Themes 2&
PAPER
Synoptic Interpretation of scatter graphs and line of best fit (extrapolation of past data to future) Limitations of quantitative sales forecasting techniques 3.3.2 INVESTMENT APPRAISAL Simple payback Average (Accounting) Rate of Return - ARR Discounted Cash Flow (Net Present Value (NPV) only) Calculations and interpretation of figures generated by investment appraisal techniques Limitations of investment appraisal techniques 3.3.3 DECISION TREES Constructions and interpretation of simple decision tree diagrams Calculations and interpretations of figures generated by decision tree diagrams Limitations of decision trees 3.3.4 CRITICAL PATH ANALYSIS Nature and purpose of Critical Path Analysis Completion and interpretation of simple networks to identify the critical path 3.4.1 CORPORATE INFLUENCES Corporate timescales: short-termism versus long-termism Evidence-based versus subjective decision making 3.4.2 CORPORATE CULTURE Strong and weak cultures Classification of company cultures (power, role, task, person) How corporate culture is formed Difficulties in changing an established culture 3.4.3 SHAREHOLDERS VERSUS STAKEHOLDERS Internal and external stakeholders Stakeholder objectives Stakeholder and shareholder influences Potential for conflict between profit-based (shareholder) and wider objectives (stakeholder) 3.4.4 BUSINESS ETHICS Ethics of strategic decisions (trade-offs between profit and ethics) Pay and rewards Corporate social responsibility (CSR) 3.5.1 INTERPRETATION OF FINANCIAL STATEMENTS Statement of comprehensive income (profit and loss account) Statement of financial position (balance sheet) 3.5.2 RATIO ANALYSIS Calculation of gearing ratio Calculation of return on capital employed (ROCE)
Themes 1& Themes 2&
PAPER
Synoptic Structural change 4.1.4 PROTECTIONISM Tariffs Import quotas Other trade barriers (government legislation, domestic subsidies) 4.1.5 TRADING BLOCS Expansion of trading blocs (EU, ASEAN, NAFTA) Impact on businesses of trading blocs 4.2.1 CONDITIONS THAT PROMPT TRADE Push factors (saturated markets, competition) Pull factors (economies of scale, risk spreading) Possibility of off-shoring and outsourcing Extending the product life cycle by selling in multiple markets 4.2.2 ASSESSMENT OF A COUNTRY AS A MARKET Factors to consider (levels and growth of disposable income. Ease of doing business, infrastructure, political stability, exchange rate) 4.2.3 ASSESSMENT OF A COUNTRY AS A PRODUCTION LOCATION Factors to consider (costs of production, skills & availability of labour force, infrastructure, location in trade bloc, govt incentives, ease of doing business, political stability, natural resources, likely return on investment) 4.2.4 REASONS FOR GLOBAL MERGERS OR JOINT VENTURES Spreading risk over different countries / regions Entering new markets / trade blocs Acquiring national / international brand names / patents Securing resources / supplies Maintaining / increasing global competitiveness 4.2.5 GLOBAL COMPETITIVENESS Impact of movements in exchange rates Competitive advantage through cost competitiveness / differentiation Skill shortages and their impact on international competitiveness 4.3.1 MARKETING Global marketing strategy and global localisation (glocalisation) Different marketing approaches (domestic/ethnocentric, mixed/geocentric, international/polycentric Application and adaptation of the marketing mix (4Ps) to suit global markets 4.3.2 NICHE MARKETS Cultural diversity Features of global niche markets Application and adaptation of the marketing mix (4Ps) to suit global niches 4.3.3 CULTURAL / SOCIAL FACTORS
Themes 1& Themes 2&
PAPER
Synoptic Considerations for businesses (cultural differences, different tastes, language, unintended meanings, inappropriate/inaccurate translations, inappropriate branding and promotion 4.4.1 IMPACT OF MNCs Impact of MNCs on the local economy (local labour, wages, working conditions and job creation) Impact of MNCs on the national economy (FDI flows, balance of payments, technology and skills transfer, consumers, business culture, tax revenues and transfer pricing) 4.4.2 ETHICS Stakeholder conflicts Pay and working conditions Environmental conditions (emissions, waste disposal) Supply chain considerations (exploitation of labour, child labour) Marketing considerations (misleading product labelling, inappropriate promotional activities) 4.4.3 CONTROLLING MNCs Factors to consider (political influence, legal control, pressure groups, social media)
