°Entering New markets.  °New products.   °Investing in new technology. 

-slow.     -Takes long time for investment to be returned.   -limited growth=Depends on sales forecasts. 

Give 3 disadvantages of internal growth. 

°Merger=Businesses willingly merge.        °Takeover=Business buys majority of shares. 

+quick.   +Businesses share risk & resources.    +Increased Market share.   +Reduced competition. 

-Expensive. -Difficult to join.   -Staff may be unhappy=Low motivation & increased staff turnover.   -Managers may not be experienced to deal with other business. 

Give 4 disadvantages of External growth. 

Business raises capital by selling shares publically on a stock exchange. 

+Quickly raise finances through share capital.       +Limited liability.       +Easier to get loans=incorporated business.             +Can negotiate better prices with suppliers. 

Give 4 advantages of Public Limited Companies. 

-Risk of takeover.   -Loss of control.   -Expensive to set up.   -finances viewed by public.   -increased public attention.   

Give 5 disadvantages of Public limited companies. 

°Owner investment.    °Retained profit.    °Selling assets. 

Give 3 forms of internal sources of finance. 

+No interest costs.   +control is maintained.   +Doesn’t need to be payed back. 

Give 3 advantages of Owner investment and Retained profit. 

-Once used up, cannot be used for emergencies. 

Give a disadvantage of Owner investment and retained profit. 

-Profits may take too long to build up for investment. 

Give an extra disadvantage of retained profit

+Creates space for more useful things e.g. offices space, storage= saves cash on expansions.    +Doesn’t need to be payed back. 

-Assets may be needed in the future.   -Once money is gone, it cannot be used for emergencies.   -May not be enough for investment. 

°leasing=Renting assets.      °Loan.    °Hire purchase.   °Bank overdraft.   °Trade credit.   °Family & friends.   °Venture capital=cash given by investors.    °Grant=Fixed sum awarded by government if meets criteria.   °Share capital

Give 9 forms of External sources of finance. 

+Arranged quickly.  +Repaid over long period. 

-Interest costs.   -Difficult for new businesses to access. 

+Large sums raised in short amount of time. 

-Risk of takeover. -Dividends have to be payed. 

+large sums in short amount of time.   +Offer help and advice. 

-lose control.   -Investor may have different vision for businesses future. 

+low interest. +Cash may not have to be payed back. 

-Money lost if business fails.   -Arguments may occur. 

+Large sums not required to pay up front.   +leasing company responsible for repairs. 

-Expensive way to obtain assets. -Assets not owned. 

Deposit payed & installments payed monthly until whole sum price of asset is payed. 

+Expensive assets can be purchased & payed over time= no damage to cash flow

-Interest charged.   -Not owned until final payment is made. 

Fixed sum awarded by government if business meets criteria. 

-Business may not meet criteria.   -Time consuming to apply for. 

°New technology=New inventions.      °New competitors=Adapt products to be more competitive.      °Market Demands=prices change.     °Legislations may force to change products & services.   °Internal reasons=new owners with new objectives. 

Give 5 reasons why business objectives change. 

°Increase market share.   °Increase profits & sales.   °Expand product range.   °Enter new markets.   °Take over businesses.   °Increase staff workforce.  °Open new stores

How business objectives change: 7 targets for a GROWING BUSINESS. 

°Decrease product range.   °Exit markets.   °Maintain market share.   °Maintain sales to break even & profits.   °focus on survival.   °Reduce staff.   °close stores.  °Reduce costs. 

How business objectives change: 8 Targets for STRUGGLING BUSINESSES. 

Customers can buy from foreign companies= Increases competition. 

New markets that UK businesses can sell in= Increased profits, sales, & opportunities. 

Business can locate overseas & profit from cheap labour= save costs= Competative. 

Impact of Globalisation: Multinationals (operates in multiple countries)

+New markets.   +Cheaper labour costs.   +Access to new technology & resources.   

-Threat by foreign competition.    -Cultural differences= adapt products, prices, & presentation to cultural tastes=Time consuming, expensive. 

Protect domestic businesses by: preventing dumping of cheap goods on DOMESTIC MARKETS, Raise revenue from tariffs, Prevent entry of undesirable goods. 

°Quotas=Physical limits.    °Tariffs=Taxes on imports.   °Non-tariff= Quality & safety standards.   °Subsides= Money to help domestic businesses.  °Trade block= promoting free trade between group of countries e.g. EU. 

+Save costs on location & staff.   +Accessible 24/7 to customers.   +Promote through social media=reduce costs. +Access to international markets. 

-Trads barriers can apply over the internet. 

°Change technology e.g. sockets    °Change taste.   °Change components to meet safety regulations. 

How businesses change marketing mix to compete internationally: Product= give 3 changes

°consider tariffs     °Adapt to foreign incomes.   °Comply with tax laws. 

How businesses change marketing mix to compete internationally: Price= give 3 changes. 

Change location of products to local preferences & often at preferred local time. 

How businesses change marketing mix to compete internationally: Place

Make sure colours, gestures, and phrases are acknowledged. 

How businesses change marketing mix to compete internationally: Promotion

Moral principles that guide behaviours of individuals & businesses. Business puts moral values above profits. 

When something is given up to achieve something else. 

°Pay workers fair wages instead of exploiting them.   °Invest in more expensive renewable energy.   °Be honest & treat customers fairly. 

-Don’t make as much profit.   -Raise costs in order to meet tradeoffs. 

Organisations that try to change the behaviour or operations of a business. 

Ensure that products are safe & ethically produced= environmentally friendly. 

Want businesses to pair fair wages & pay fair to suppliers. 

Want businesses to source local products & not exploit their location. 

Want accurate information on packaging & to obey advertising legislation. 

°Traffic congestion    °Air, noise, & water pollution. 

Give 2 Short term impacts on environment by a business. 

°Climate change.   °Depletion of land & natural resources= deforestation. 

Give 2 long term impacts on the environment by a business. 

°Renewabke energy.   °Source local products to reduce food miles.   °Biodegradable packaging.   °Replenishing & conserving natural resources.  

Give 4 ways a businesses can reduce environmental impacts. 

°CHEAPER.    °BRANDING.      °BETTER CUSTOMER SERVICES.   °BETTER FUNCTION.   °QUALITY.    °ECO FRIENDLINESS.    °WIDER PRODUCT RANGE. 

How can a business differentiate its products? Name 7 ways. 

Development, Introduction, Growth, Maturity, Decline. 

No sales, Lots of costs, Negative cash flow. 

Increase sales, Negative cash flow, Promoting. 

Rapid sales, Positive cash flow, increasing market share. 

Highest sales, Sales slow down as markets becomes saturated as rivals bring out Similiar competing products. 

°Targeting new markets or segments.   °Increase product range.      °Modifying product.      °Increasing promotion by price offers. 

•price gives customers indication of quality.            •Changes in price in a competitive market have an influence of demand.            •Branded products have higher price. 

Charging a high price & lowering it over time.= Customers are more prepared to pay as it is a superior product. 

Product launched with a low price that its increased gradually to let customers try it. 

Calcukating cost on producing product & adding on a percentage profit. 

•Branding=Products from a stronger brand can demand higher prices due to deaireability.    •Costs of the business.   •Technology=New tech lowers costs of production.      •Competition.     •Market segments.   •Product life cycle

•Advertising.   •Sponsorship.   •Product trials.   •Special offers.  •Public relations (branding)

+Provides brand exposure.  +Good reputation. 

-Gives little information about business -Expensive.                                            -If event gets bad publicity, brand image will suffer. 

+Encourages customers to buy even if they didn’t plan to.                             -Expensive to give away free samples. 

Give an advantage and disadvantage of Product trials. 

+Boost short term sales.   +Clear stock levels.   

+Adds value to the product.   +Develops loyalty to the brand. 

Give 2 advantages of public relations (branding)

-Takes long time to develop strong brand.   -Brand image can be damaged by bad publicity which will affect sales. 

Give 2 disadvantages of Public relations (branding)

•E newsletters.  •Apps.  •Social media. •Targeted advertising (cookies)

Route that the product takes from manufacturing to where it is sold to consumers. 

+Customers can browse & try products +Retailers provide help & advice.       +Customers enjoy experience of shopping. 

+Save costs on location & staff.       +Accessible to customers 24/7.   +Large access to international customers.         +Small businesses can compete with larger businesses without needing much retail space. 

Costs a lot to create, so price will be higher to provide satisfactory margin. 

Must be held in a suitable establishment to enhance brand image. 

Unique features & strong brand are highly desirable. Costs needed to differentiate product & time needed to establish strong brand. 

Set prices lower than competitors= less profit per unit. 

English (UK)

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Diana Williamson

United Kingdom

DEFAULT (England)

Business

AQA GCSE Business Paper 2

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AQA GCSE Business Paper 2 Study Guide PDF - Tips, Topics, and Past Papers

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