as business studies revision unit one

unit one revision for AQA (though i think its the same for most exam boards) for bsuiness studies

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Chapter 1- Enterprise
Enterprise : Almost any business or organisation can be called an enterprise but the term usually refers to the
process by which new businesses are formed and new products and services created and brought to the market.
Enterprise skills: Skills that allow an individual or organisation to respond effectively to changing market
situations, including problems-solving skills, thinking and acting innovatively and creatively, and understanding
the importance of risk and uncertainty. The definition of enterprise capability used by the Department for
Children, School and Families includes innovation, creativity, risk management, risk taking and a `can-do' attitude.
Entrepreneurs: Individuals who have an idea that they develop buy setting up a new business and encouraging it
to grow. They take the risk and the subsequent profits that come with success or the losses that come with
Characteristics of an entrepreneurs:
The ability to spot and take advantage of opportunities
Relevant skills and expertise
Vision, creativity and innovation
Willingness to take risks
Opportunity cost: The `real cost' of taking a particular action or the next best alternative forgone, i.e. the next
best thing that you could have chosen but did not.
Chapter 2: Generating and protecting business ideas
Spotting trends and anticipating their impact
Identifying a market niche
Copying ideas from other countries
Taking a scientific approach (inventing )
Franchise : when a business gives another business the right to supply its product or service.
Benefits of operating as a franchise
Least amount of risk so high chances of survival
Maybe easier to gain finance as less risk
Lower advertising (national)
Franchisee usually has exclusive right in his or her area, as the franchisor will not sell any other
franchises in the same region
Relationships with suppliers are likely to have been established by the franchisor.

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Franchisor offers support and training ,
Possible pit falls.
Costs my be higher
Is one franchise gets a bad reputation they all do
Franchise agreement often restricts how the business should be run
Franchisees are required to sign non-competition clauses, agreeing not to set up competing businesses
in the franchisor's industry for a significant period after the end of the franchise agreement.
A % of profits given to franchisor
Copyright : legal protection against copying for authors, composers and artists.…read more

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Adding value: the process of increasing the worth of resources by modifying them
Value added: sales revenue minus the cost of bought in materials, components and services.
Chapter 4 -developing business plans
Business plan : a report describing the marketing strategy, operational issues and financial implications of
a business start up
Useful in clarifying objectives and thinking idea thoruhg
Enables owners to know precisely what needs to be done in order to meet objective
Essentitial in persuading lenders to invest capital
Monitor progress.…read more

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Primary market research :
Focus groups
Test marketing
Secondary market research
Government publications
Company records
Market research organisations
Loyalty cards
The internet
Qualitative market research : The collection of information about the market based on subjective factors
such as opinions and reasons.…read more

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The importance of market segment s
Whether the business is targeting a specific group of customers
The firm's understanding of its customer base.
Chapter 6 ­ understanding markets
The market L a place where buyers and sellers come together
Local markets most common form of market for consumer goods. Individuals tend to buy products
within a limited geographical area, close to where they live.…read more

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Reaching the chosen segment with marketing
Recognizing changes in the segment with marketing
Recognizing changes in the segments interested in the products
Meeting the needs of customer s not included in the chosen segment
Market size: the volume of sales of a product or the value of sales of a product
Market growth : the percentage change in sales over a period of time
Factor influencing growth
Economic growth
The nature of the product
Changes in taste
Social changes
Market share: the percentage or…read more

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Private limited company: a small to medium sized business that is usually run by the family or the small
group of individuals who own it.…read more

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Structure Advantages Disadvantages
Sole trader Easy and cheap to set up Unlimited liability
Fe w legal formalities Limited collateral to support
Able to respond quickly to changes applications for loans
in circumstances Limited capital for investment and
Owner takes all the profit and expansion
hence there is good motivation Difficulties when the owner wishes
Independence to go on holiday or is ill
More privacy than other legal Limited skills as the owner needs to
structures, as financial details do be a `jack of all trades'…read more

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Suppliers tend to be more willing more emphasis on short term
to offer credit to public limited financial results, not long term
companies. performance.…read more

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Chapter 8 ­ raising finance
Ordinary share capital ­ money given to a company by share folders in return for a share certificate that
gives them part of the company and entitles them to a share of the profits
Known as risk capital or equity capital. If the business is successful , each shareholder receives a
Ordinary share capital appeals to investors who are prepared to take a risk in return for higher
rewards.…read more


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