Business - Edexcel

Learn techniques for taking your GCSE Business exam with example questions, answers and case studies.

Businesses are dynamic, meaning they constantly adapt to respond to consumers’ wants and needs. Entrepreneurs spot gaps in the market and develop new ideas for products and services.

When making business decisions, entrepreneurs will consider the risks and rewards involved. As long as they believe that the potential rewards are greater, they will often take the risks.

Businesses exist to meet customer needs. They do this by organising resources to provide goods and services that customers want. Adding value to goods and services helps a business to sell more.

When businesses are deciding how to develop their products and services, they undertake market research. Market research can either be done by the company itself or taken from elsewhere.

Segmentation is how a business splits up its target market and is based on location, demographics, behaviour, lifestyle, income and age.

The competitive environment relates to how a business is affected by its competition and how it adapts its businesses practices to enable it to compete effectively.

Customer needs are the things that customers require when purchasing a product or service. Businesses must find out about their customer’s needs in order to be successful.

All businesses create aims and objectives to give them goals or targets to achieve. Businesses usually have a mixture of financial and non-financial objectives.

Break-even is the point at which a business is not making a profit or a loss. Businesses calculate their break-even point and are able to plot this information on a break-even graph.

The management of cash and cash flow is important as it can prevent a business from failing. Cash flow is the way that money moves in and out of a business and its bank s.

Businesses need to consider how they will fund their activities when starting up as well as during their day-to-day operations. Various costs need to be covered, such as equipment, stock and paying bills.

There are a number of different options when setting up a new or small business. These may depend on the size of the business, the number of owners and the level of risk owners are willing to take.

Business owners have to consider a number of things when choosing a location for their business. These include what type of business and how close they need to be to their customers, labour, materials and competitors.

The marketing mix is a marketing tool that is made up of the four Ps – product, price, place and promotion. For a successful marketing mix, all elements must work together effectively.

A business plan is an essential part of starting any business. Entrepreneurs create business plans to help them consider all of the elements they are going to need for their new business to be a success.

Businesses need to be aware of their stakeholders. The activities of a business will affect many of their stakeholders. The stakeholders can also influence the decisions that a business makes.

The speed at which technology advances is getting faster. Businesses need to be aware of the technology that is available to them, and how it might influence their sales, costs and marketing.

The government uses legislation to regulate businesses’ behaviour and prevent them from exploiting people. There are laws to protect consumers who buy from businesses and workers employed by businesses.

The economic climate has a big impact on businesses. The level of consumer spending affects prices, investment decisions and the number of workers that businesses employ.

The world is an ever-changing place. While businesses may not be able to control changes in technology, laws or the economic climate, they do need to be aware that any such changes will affect them.

Business growth is important as it enables businesses to increase the scale of their operation and competitiveness. This may be done either internally (organically) or externally (inorganically).

As a business grows, its aims and objectives change. These changes are made in response to market conditions, technology, performance, legislation and internal factors.

In business, globalisation means operating on an international scale to provide or produce goods and services. Almost all of the goods we use are made of parts sourced from around the world.

Businesses are increasingly judged on the contribution they make to society. Behaving ethically, without harming the environment, is an important part of this corporate social responsibility.

It is easier to sell products designed with the needs and wants of consumers in mind. As needs and wants change, businesses must update or replace products that no longer satisfy consumers.

Price often influences purchasing decisions, so getting it right is important. Set the price too high and consumers will not purchase. Set it too low and there is a risk that the business will make losses.

Promotion is a key part of marketing, helping to inform and persuade consumers about products. Promotional activity can be expensive, so it is important that choices are made wisely.

Customers are less likely to buy products that are difficult to find or frequently unavailable. Therefore, getting products to the right place is an important part of the marketing mix.

Combining the elements of the marketing mix will help to inform the decisions that a business makes about its target market and the image it wants to convey.

Businesses compete with rival businesses. Production costs must be kept low so that products can be priced competitively. The ability to do this is affected by production methods and technology.

Businesses must manage their materials effectively. They have a choice between keeping additional stock or using just-in-time stock control. They are affected by the relationship with their suppliers.

Quality is essential to a business’ success. Customers must be happy with the products and services they receive. If they are not, a business is unlikely to gain a good reputation or repeat customers.

Often, customers value good customer service above many other factors when making purchases. Offering good customer service is one way a business can stand out in a crowded and competitive market.

It is important to understand the difference between gross and net profit. Knowing the gross profit margin, net profit margin and average rate of return is essential when making business decisions.

Assessing the performance of a business requires a range of financial and market information. Being able to interpret and use this information is useful when making business decisions.

Businesses use organisational structures to illustrate job roles and responsibilities. Organisational structures show who each employee reports to in their job.

Businesses have many different roles and responsibilities. When recruiting to fill a vacancy, a business must decide whether to recruit internally or externally, and complete relevant documentation.

Training and development are important for businesses. They help businesses to ensure their employees are able to perform well, reach their potential and stay motivated.

Motivation determines how hard employees are willing to work for a business and how productive a business is. A business can motivate its employees through financial and non-financial methods.