Business Studies, Edexel, Building a business

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Unit 1
Marketing ­ The function that links the company with customer tastes to get the right
product at the right place at the right time. Marketing decisions are made based on market
research and are carried through the marketing mix.
Product Trial and Repeat Purchase
Factors for success:
Distribution is achieved, shops stock product
Product trial getting people to trail the product for the first time
Repeat purchase; getting customers to repeatedly buy the product again and again.
Problems with product trials:
Negative reaction because of the price/design
Expensive costing of the trial
Not enough exposure at the launch
Incorrect target audience
If the product is a flop (not enough sales)
If customers are persistent with their current brand loyalty, unwilling to change
If the company doesn't have a good enough reputation or big enough brand image
Product life cycle
Development Launch Growth Maturity Saturation Decline
Development: Where the designers finish the product before it is released onto the mass
Launch: The product is launched, backed by advertising and promotion.
Growth: Sales and profits will rise, more and more people become aware of the product.
Maturity: peak in sales, many buyers are repeat purchasers and have customer loyalty,
profitable enough to finance the development of new products, develop extension strategies
to elongate the mature stage.
Saturation: when competitors bring out imitation which reduce sales, plenty of choice in the
market, difficult to grow sales.
Decline: big drop in sales, due to competition or a drop in demand.
Product portfolio: the range of products that a business sells

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Boston Matrix: analysises a portfolio on the basis of the growth rate of the whole market and
the relative market of the product within that market.
Stars have high market share ina fats growing market. (best)
Cash cows have a high market share in a slow growing market. (reliable, 2nd best)
Problem children have low market shares in fast gorwing markets. (not going anywhere)
Dogs have low market shares in a slow groing market.…read more

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Unit 2
Design and Research development
Product differentiation: how a product stands apart from its competitors, USP
Prototypes: A working model of a possible finished product.
Research and Development: The research into new developments and methods to improve
design, functionality and cost.
The design mix:
Function: how well it works, constantly improved
Cost: cheaper costs = less overall costs of production,
Appearance: stylish and attractive products are more likely to sell, designs must suit
the preference of the target market.…read more

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Cost-effective operations and competitiveness
Productivity = total output / number of workers
Ways of reducing costs:
Improved purchasing
Better design
Cutting overhead costs
Effective customer service
Customer service: the experience that a customer gets when dealing with a business and the
extent to which the experience meets and exceeds customer needs and expectations.…read more

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The trade descriptions act and consumer protection for unfair trading:
Giving false information
Failing to give important information
Acting aggressively…read more

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Unit 3
Improving Cash flow
Cash Flow: the movement of money into and out of a business
Trade Credit: When a supplier gives a customer a period of time to pay off an invoice
De-stocking: reducing the levels of stock in a business
Changing Cash inflows:
Increasing sales revenue
Improved cash flow from customers
Issuing new shares
Selling off physical assets
Changing Cash Outflows:
Reducing the orders of stocks
Delaying paying invoices
Leasing rather than buying assets
Improving profit
Profit: occurs when revenue…read more

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Ways of increasing revenue:
Improving marketing
Better products
Break-even charts
Break-even point: The level of output where total revenues are equal to total costs.
Variable costs: Costs which change directly with the number of products made by a business
Margin of safety: The amount of output between the actual level of output and the
break-even level of output.…read more

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Advantages and Disadvantages:
Availability of finance…read more

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Unit 4
Organisational Structure
Subordinate: workers in a hierarchy who work under the control of a more senior worker.
Chain of command: The path down where orders are passed; in a company, this goes from the
board of directors down to other workers in the organisation.
De-layering: removing layers of management and workers in the hierarchy.
Empowerment: giving more responsibility to workers further down the hierarchy.…read more

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Wages: Tend to be paid for a fixed number of hours
Basic pay: Pay for working the basic working week.
Salary: Pay which is expressed as a yearly figure, per annum.
Commission: Where earnings are dictated by how much they sell.
Bonus: Addition to the basic wage or salary, for achieving a target.
Fringe benefits: Payments above the wage salary, in the form of a valuable asset, such as a
company car instead of money or a bonus.…read more



This reduces the edexcel unit 1 GCSE to the minimum information required and presents it in a straightforward and simple way. Very good for last minute revision or can be adapted to suit personal use eg change into posters, mind maps etc

Ben Rose

Very helpful but would also like to see GCSE Edexcel Business studies: Introduction to business

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