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LTP Planning

IGCSE Edexcel Business

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28 views7 pages

LTP Planning

IGCSE Edexcel Business

Uploaded by

t.zeeshan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1 – Business activity and influences on business

1.1 Business objectives

1.1.1 Businesses can have several objectives:


• financial aims and objectives - survival, profit,
sales, market share, financial security
• non-financial aims and objectives - social
objectives, personal satisfaction, challenge,
independence and control.
1.1.2 Why business aims and objectives change as
businesses evolve:
• in response to market conditions, technology,
performance, legislation, internal reasons.

1.2 Types of organisations

1.2.1 The main types of business ownership:


• sole trader
• partnerships
• limited companies (private and public)
• public corporations.
1.2.2 Characteristics relating to size:
• concepts of risk, ownership and limited liability
• public corporations – reasons for and against
public ownership
• ownership, control, sources of finance, use of
profits, stakeholders and shareholders
• appropriateness of different forms of ownership.
1.2.3 Different forms of business organisation:
• franchises
• social enterprises
• multinationals.

1.3 Classification of businesses

1.3.1 Primary, secondary and tertiary activities:


• primary sector – extracting raw materials from
the earth
• secondary sector – converting raw materials into
finished or semi-finished goods
• tertiary sector – provision of a wide variety
of services.
1.4 Business and the international economy

1.4.1 The main factors influencing location decisions and


relocation of a business:
• proximity to market, labour, materials and
competitors
• nature of the business activity
• the impact of the internet on location decisions -
e-commerce and/or fixed premises
• legal controls and trade blocs.

1.5.1 Globalisation
• concept of globalisation
• opportunities and threats of globalisation
for businesses.
1.5.2 The importance and growth of multinationals:
• benefits of a business becoming a multinational
• benefits to a country and/or economy where a
multinational company is located
• possible drawbacks to a country and/or economy
where a multinational is located.
1.5.3 Exchange rate calculation.
1.5.4 The impact of exchange rate changes:
• on international competitiveness
• on importers and exporters.

1.6 Government objectives and policies


1.6.1 Government spending:
• to provide public service
• taxation and constraints on public spending.
1.6.2 How governments can affect business activity:
• infrastructure provision
• legislation
• trade policy - membership of trading blocs, tariffs.
1.6.3 The effect of interest rates on:
• businesses
• consumer spending.

1.7 External factors

1.7.1 The external factors affecting business decisions:


• social
• technological
• environmental
• political.
1.8 What makes a business successful?

1.8.1 Measuring success in business:


• revenue
• market share
• customer satisfaction
• profit
• growth
• owner/shareholder satisfaction
• employee satisfaction.
1.8.2 Reasons for business failure:
• cash flow problems/lack of finance
• not competitive
• failure to adapt to changes in the market.

2– People in Business

2.1.1 Importance of good communication and the problems


of ineffective communication:
• the different communication methods used,
including information technology (IT) and the
benefits and limitations of each method.
2.1.2 Barriers to communication:
• how communication barriers arise
• problems of ineffective communication and how
they can be removed.

2.2 Recruitment and selection process


Types of employment:
• full-time
• part-time
• job share
• casual/seasonal/temporary.
2.2.2 Recruitment documents:
• job description
• person specification
• application form
• curriculum vitae (CV)/résumé.
2.2.3 Internal and external recruitment:
• job advertisement
• shortlisting
• interviewing.

2.3 Training
2.3.1 Importance of training to a business and workers:
• different types of training and the main purpose
o induction
o on-the-job
o off-the-job
• compliance with health and safety laws
• benefits and limitations of training.
2.2.4 Legal controls over employment and their effects:
• equal opportunities – gender, race, disability,
religion, sexual preference, age
• minimum wage laws.
2.4.1 The importance of motivation in the workplace:
• attracting employees, retaining employees,
productivity
• motivational theories of Herzberg, Maslow
and Taylor.
2.4.2 How businesses motivate employees:
• financial methods:
o remuneration
o bonus
o commission
o promotion
o fringe benefits
• non-financial methods:
o job rotation
o job enrichment
o autonomy.

2.5 Organisation structure and employees


2.5.1 Organisational charts for different types of business:
• hierarchical and flat
• centralised and decentralised.
2.5.2 Roles and responsibilities of employees in terms of
compliance and accountability:
• span of control
• chain of command
• delegation.
2.5.3 The different functional areas within a business:
• human resources – workforce planning,
recruitment and selection, training, health and
safety, staff welfare, employment issues, industrial
relations, disciplinary and grievance procedure,
dismissal, unfair dismissal and redundancy
• finance – wages/salaries, cash-flow forecasting,
budgets and accounting
• marketing – market research, product planning,
pricing, sales promotion, advertising, customer
service, public relations, packaging and distribution
• production – manufacturing the product, designing
new products, quality control and stock control.

3– Business finance

3.1.1 The need for finance:


• short-term needs
• long-term needs
• to start up or expand.
3.1.2 Internal sources of finance:
• personal savings
• retained profit
• selling assets.
3.1.3 External sources of finance:
• overdraft and trade payables
• loan capital, share capital, including stock market
flotation (public limited companies)
• venture capital
• crowdfunding.

3.2 Cash flow forecasting

3.2.1 The importance of cash to a business:


• to pay suppliers, overheads and employees
• to prevent business failure (insolvency)
• the difference between cash and profit.
3.2.2 Calculation and interpretation of cash-flow forecasts:
• cash inflows
• cash outflows
• net cash flow
• opening and closing balances.

3.3 Costs and break-even analysis

3.3.1 The concept and calculation of:


• revenue
• fixed and variable costs
• total costs
• profit and loss.
3.3.2 The concept of break-even and calculation of
break-even (from formula or diagram):
• break-even level of output.
3.3.3 Interpretation of break-even charts:
• the impact of changes in revenue and costs
• limitations of break-even charts.

3.4 Financial documents

3.4.1 The purpose of statements of comprehensive income:


• main features – sales, cost of sales, gross profit,
expenses, operating profit
• the use of statements of comprehensive income in
decision making (students will not be required to
construct an income statement)
• the nature of profit and its importance.
3.4.2 The purpose of statements of financial position:
• main features – current and non-current assets,
current and non-current liabilities, capital
employed
• interpret a statement of financial position
(students will not be required to construct a
statement of financial position).
3.5 Accounts analysis

3.5.1 Calculating and analysing accounting ratios:


• gross profit margin
• operating profit margin
• markup
• return on capital employed (ROCE)
• current ratio
• acid test ratio.
(Formulae for use in this qualification can be found in
Appendix 4. Students will be provided with these
formulae in the examination.)
3.5.2 Liquidity:
• the concept and importance of liquidity
• comparisons with previous years and/or with other
business organisations.
3.5.3 The use of financial documents:
• assess the performance of the business
• inform decision making.

2 – Marketing
4.1 Market research
4.1.1 The purpose of market research:
• to identify and understand customer needs
• to identify gaps in the market
• to reduce risk
• to inform business decisions.
4.1.2 Methods of market research:
• primary research:
o survey
o questionnaire
o focus group
o observation
o test marketing
• secondary research:
o internet
o market reports
o government reports.
4.1.3 The use of data in market research:
• qualitative and quantitative data
• the role of social media in collecting market
research data
• the importance of the reliability of market
research data.
4.2 The market
4.2.1 Importance of marketing:
• satisfying customer needs
• building customer relationships
• keeping customer loyalty
• market orientation and product orientation
• market share and analysis
• niche and mass marketing.
4.2.2 Responding to changes in the market:
• changing customer needs
• changing customer/consumer spending patterns
• increased competition.
4.2.3 How businesses use market segmentation to target
customers:
• identifying market segments:
o location
o demographics
o lifestyle
o income
o age.

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