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1. What is Business? - Includes a PDF poster of a mindmap with all key information from the chapter, best viewed using Google to zoom in on smaller text
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Taylor’s & Scientific Management Business A-level Theory, AQA Business A-level, AS-Level Business, Edexcel, Cambridge
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Competition can reduce demand & increase costsDifferent types of Competition:
Perfect Competition = all firms compete on equal basis, charge similar prices
Oligopoly = small number of large firms dominate the market, charge similar prices,
focus on marketing to get ahead
Monopoly = one business has complete control over its market, there is no competition
- can increase prices without demand falling and low marketing costs A
Labour Supply Interest Rates - determine cost of borrowing money
High unemployment = good supply in labour, business can Affect return on savings
hire staff easily, pay low wages = keeps costs low and Fee paid for borrowing as a %
people are productive to protect their jobs Affect consumer spending - amount of disposable income
Low unemployment = shortage of labour, those available Depends on product - e.g. cars rely on borrowing so are sensitive
might not have the skills for the roles, needing training =
increased
Response to demographic change AIM TO ...
Seasonal Supply and Demand Demographic change can influence demand - different offer the highest quality possible
Weather & holidays - seasonal demand for toys or demographic consumers buy different products give excellent customer service Busin
suncream Example: UK’s growing elderly population so software developers have a good image and reputation
Variation in supply - e.g. strawberries in the summer are aiming brain training apps at elderly to expand market develop new products ahead of competition
Strategies: cutting prices to increase demand and get rid of Also has lead to increase demand of doctors and nurses = offer a diverse range
stock, preserving food increased cost of NHS be sustainable
invest in local community / social products
THE EXTERNAL ENVIRONMENT - POLITICAL FACTORS
Incomes and economic Factors Governments try to increase low demand in economy - cut taxes, raise benefits, central banks
Recession = businesses need to reduce costs - reduce reduce interest rates = increased disposable income
wages or redundancies = lower incomes demand increases Governments try to reduce demand if it’s too high- raise taxes, central banks increase interest
Economic boom= greater costs due to increased wages or rates to raise cost of borrowing disposable income
increased demand and production costs Governments can influence demand for particular products by using taxes- reduce carbon
Changing incomes = effect some products based on if they emissions by raising tax on high carbon emission vehicles and low on low emission - increased
are necessities or luxuries taxes on products leads to reduce demand because people try to find cheaper alternatives
1 - What Is Bu
Reasons shareholders invest
Capital gain ROLE OF SHAREHOLDERS
Involvement in running of business PLC Shares can be bought by individuals, companies or
Belief and support of the aims and institutions
objectives Ltd - family or friends buy shares
Help or support a company to survive or Main role= provide funds
grow Make some decisions
Venture Capitalists - invest because they AGM - annual general meeting - legal requirement for DIFFERENT FORMS OF BUSINESS
think it will be a success; take big financial PLCs, shareholders get to vote on matters, MS with over
risk 50% of shares has most power
Have the right to a dividend
UNLIMITED LIABILITY LIMITED LIABILITY
Business and owner seen as one by Owners aren’t personally respons
the law of the business
Business debts become personal Shareholders have limited liability
debts limited company has a separate le
Huge financial risk from its owners
Constantly changing share prices Forced to give up things like houses The most they can lose is money
Ltd - price of share decided by owners, traded privately and based on current performance and cars to pay off debt company
PLC - determined by supply and demand: more buyers= high price, more sellers= lower price To gain limited liability they have t
incorporated - registered with the
Factors influencing supply and demand companies
Performance of company
Speculation - rumours of new products or cost saves might be a pull SOLE TRADERS
Current share price - low share price might mean a bargain for future gain and high shares owned and run by one individual
might be sold for capital gain may operate alone or employ other people
Interest rates - Low interest rates = reward for saving money is reduced so demand for shares ADVANTAGES:
may increase because investments will gain more than savings Advantages: Benefits of limited liability and conf
The economy - Strong economy = people have more money to invest, Weak economy = people Easier to setup and control expand
can’t afford to take the risk Minimal legal formalities Able to access a wider range of bo
Most popular business structure in the UK opportunities
Confidentiality as accounts don’t have to be published
Disadvantages: DISADVANTAGES:
bit riskier as there is no legal separation between business assets Financial info public on the Compan
and personal assets. Follow more legal rules
Can be difficult to raise finance.
Workload pressures
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