EDEXCEL A LEVEL BUSINESS

SPECIFICATION CHECKLIST
THEME 1 - MARKETING

1.1.1 THE MARKET o Interaction of supply and demand

o Supply and demand diagrams
o Characteristics of mass and niche markets
o Market size and market share 1.2.4 PRICE ELASTICITY OF DEMAND (PED)
o Brands o Calculation of PED
o Online retailing o Factors influencing PED
o How markets change o Interpretation of numerical values of PED
o Innovation and market growth o Significance of PED to business (implications of pricing)
o Adapting to change o Relationship between PED and total revenue
o How competition affects the market
o Difference between risk and uncertainty 1.2.5 INCOME ELASTICITY OF DEMAND (YED)
o Calculation of YED
1.1.2 MARKET RESEARCH
o Interpretation of numerical values of YED
o Product and market orientation o Factors influencing YED
o Primary and secondary market research data o Significance of YED to businesses
o Limitations of market research, sample size and bias
o Use of ICT to support market research 1.3.1 PRODUCT / SERVICE DESIGN
o Market segmentation o Design mix (function, aesthetics, cost)
o Resource depletion: waste minimisation, re-use &
1.1.3 MARKET POSITIONING
recycling
o Market mapping o Ethical sourcing
o Competitive advantage of a product or service
o Purpose of product differentiation
1.3.2 BRANDING AND PROMOTION
o Adding value to products / services o Types of promotion
o Types of branding
1.2.1 DEMAND
o Benefits of strong branding
o Changes in the prices of substitutes o Ways to build a brand
o Changes in consumer incomes o Changes in branding and promotion to reflect social
o Fashions, tastes and preferences trends
o Advertising and branding
1.3.3 PRICING STRATEGIES
o Demographics
o External shocks o Types of pricing strategy (cost plus, price skimming,
penetration, predatory, competitive, psychological)
o Seasonality
o Factors that determine the most appropriate price
1.2.2 SUPPLY strategy
o Changes in pricing to reflect social trends
o Changes in the cost of production
o Introduction of new technology 1.3.4 DISTRIBUTION
o Indirect taxes
o Distribution channels
o Government subsidies
o Changes in distribution to reflect social trends
o External shocks
1.3.5 MARKETING STRATEGY
1.2.3 MARKETS
o Product life cycle
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o Boston Matrix and the product portfolio o Consumer behaviour & building customer loyalty
o Marketing strategies for different types of market

THEME 1 – MANAGING PEOPLE

1.4.1 APPROACHES TO STAFFING o Creating and setting up a business

o Running and expanding / developing a business
o Staff as an asset; staff as a cost
o Innovation within a business (intrapreneurship)
o Flexible workforce
o Barriers to entrepreneurship
o Distinction between dismissal and redundancy
o Anticipating risk and uncertainty in the business
o Employee /employer relationships environment
1.4.2 RECRUITMENT, SELECTION & TRAINING 1.5.2 ENTREPRENEURIAL MOTIVES AND
o Recruitment and selection process CHARACTERISTICS
o Costs of recruitment, selection and training o Characteristics and skills required
o Types of training o Reasons why people set up businesses (financial &
1.4.3 ORGANISATIONAL DESIGN non-financial)

o Structure (hierarchy, chain of command, span of 1.5.3 BUSINESS OBJECTIVES

control, centralised & decentralised) o Survival
o Types of structure (tall, flat, matrix) o Profit maximisation
o Impact of different organisational structures on o Other objectives (sales maximisation, market share,
business efficiency & motivation cost efficiency, employee welfare, customer satisfaction,
social objectives)
1.4.4 MOTIVATION IN THEORY AND PRACTICE
o Importance of employee motivation to a business 1.5.4 FORMS OF BUSINESS
o Motivation theories (Taylor, Mayo, Maslow, Herzberg) o Sole trader, partnership and private limited company
o Financial incentives to improve employee performance o Franchising, social enterprise, lifestyle businesses,
(piecework, commission, bonus, profit share, online businesses
performance-related pay) o Growth to PLC and stock market flotation
o Non-financial techniques to improve employee
performance (delegation, consultation, empowerment, 1.5.5 BUSINESS CHOICES
team working, flexible working, job enrichment, job
rotation, job enlargement) o Opportunity cost
o Choices and potential trade-offs
1.4.5 LEADERSHIP
1.5.6 MOVING FROM ENTREPRENEUR TO
o Distinction between management and leadership LEADER
o Types of leadership style (autocratic, paternalistic,
democratic, laissez-faire) o Difficulties in developing from an entrepreneur to a
leader
1.5.1 ROLE OF AN ENTREPRENEUR

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THEME 2 - FINANCE

2.1.1 INTERNAL FINANCE 2.2.3 BREAK-EVEN

o Owner’s capital: personal savings o Contribution (selling price – variable cost per unit)
o Retained profit o Break-even point
o Sale of assets o Using contribution to calculate break-even point
2.1.2 EXTERNAL FINANCE o Margin of safety
o Interpretation of break-even charts
o Sources of finance (family & friends, banks, peer-to-
peer funding, business angels, crowd funding, other o Limitations of break-even analysis
businesses)
2.2.4 BUDGETS
o Methods of finance (loans, share capital, venture
capital, overdrafts, leasing, trade credit, grants) o Purpose of budgets
o Types of budget (historical figures, zero-based)
2.1.3 LIABILITY o Variance analysis
o Implications of limited and unlimited liability o Difficulties of budgeting
o Finance appropriate for limited and unlimited liability
businesses 2.3.1 PROFIT
o Calculation of profit (gross, operating, net)
2.1.4 PLANNING
o Measuring profitability (gross profit margin, operating
o Relevance of a business plan in obtaining finance profit margin, net profit margin)
o Interpretation of a simple cash flow forecast & o Ways to improve profitability
calculations based on changes in the cash-flow variables o Distinction between profit and cash
o Use and limitations of a cash-flow forecast
2.3.2 LIQUIDITY
2.2.1 SALES FORECASTING
o Measuring liquidity (current ratio, acid-test ratio)
o Purpose of sales forecasts o Ways to improve liquidity
o Factors affecting sales forecasts (consumer trends, o Working capital and its management (importance of
economic variables, actions of competitors) cash)
o Difficulties of sales forecasting
2.3.3 BUSINESS FAILURE
2.2.2 SALES, REVENUE AND COSTS
o Internal and external causes of business failure
o Calculation of sales volume and sales revenue o Financial and non-financial factors
o Calculation of fixed and variable costs

THEME 2 – RESOURCE MANAGEMENT

2.4.1 PRODUCTION, PRODUCTIVITY AND 2.4.2 CAPACITY UTILISATION

EFFICIENCY
o Calculation of capacity utilisation
o Methods of production (job, batch, flow, cell) o Implications of under- and over-utilisation of capacity
o Productivity: calculating output per unit of input per o Ways of improving capacity utilisation
time period
o Factors influencing productivity 2.4.3 STOCK CONTROL
o Link between productivity and competitiveness o Interpretation of stock control diagram
o Factors influencing efficiency o Buffer stocks
o Distinction between labour- and capital-intensive o Implications of poor stock control
production
o Just in time (JIT) management of stock

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o Waste minimisation o Quality (control, assurance, circles, Total Quality
o Competitive advantage from lean production Management)
o Continuous improvement (Kaizen)
2.4.4 QUALITY MANAGEMENT o Competitive advantage from quality management

THEME 2 – EXTERNAL INFLUENCES

2.5.1 ECONOMIC INFLUENCES o Consumer protection

o Employee protection
o Inflation
o Environmental protection
o Exchange rates
o Competition policy
o Interest rates
o Health & safety
o Taxation and government spending
o Business cycle 2.5.3 THE COMPETITIVE ENVIRONMENT
o Effect of economic uncertainty on the business o Competition and market size
environment

2.5.2 LEGISLATION

THEME 3 – BUSINESS DECISIONS AND STRATEGY

3.1.1 CORPORATE OBJECTIVES o Objectives of growth (economies of scale, increased

market power, increased market share and brand
o Development of corporate objectives from mission recognition, increased profitability)
statement / corporate aims o Problems arising from growth (diseconomies of scale,
o Critical appraisal of mission statements / corporate internal communication, overtrading)
aims
3.2.2 MERGERS AND TAKEOVERS
3.1.2 THEORIES OF CORPORATE STRATEGY
o Reasons for mergers and takeovers
o Ansoff’s Matrix o Distinction between mergers and takeovers
o Porter’s Strategy Matrix o Horizontal and vertical integration
o Aim of portfolio analysis o Financial risks and rewards
o Achieving competitive advantage through distinctive o Problems of rapid growth
capabilities
o Effect of strategic and tactical decisions on human, 3.2.3 ORGANIC GROWTH
physical and financial resources
o Distinction between inorganic and organic growth
3.1.3 SWOT ANALYSIS o Methods of growing organically
o Internal considerations: strengths and weaknesses o Advantages and disadvantages of organic growth
o External considerations: opportunities and threats 3.2.4 REASONS FOR STAYING SMALL
3.1.4 IMPACT OF EXTERNAL INFLUENCES o Small business survival in competitive markets
(product differentiation and USPs, flexibility in responding
o PESTLE (political, economic social, technological, legal to customer needs, customer service, e-commerce)
and environmental)
o Changing competitive environment 3.3.1 QUANTITATIVE SALES FORECASTING
o Porter’s Five Forces o Calculation of time-series analysis (moving averages –
3 period / 4 quarter)
3.2.1 GROWTH

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o Interpretation of scatter graphs and line of best fit o Ethics of strategic decisions (trade-offs between profit
(extrapolation of past data to future) and ethics)
o Limitations of quantitative sales forecasting techniques o Pay and rewards
o Corporate social responsibility (CSR)
3.3.2 INVESTMENT APPRAISAL
o Simple payback 3.5.1 INTERPRETATION OF FINANCIAL
o Average (Accounting) Rate of Return - ARR STATEMENTS
o Discounted Cash Flow (Net Present Value (NPV) only) o Statement of comprehensive income (profit and loss
o Calculations and interpretation of figures generated by account)
investment appraisal techniques o Statement of financial position (balance sheet)
o Limitations of investment appraisal techniques
3.5.2 RATIO ANALYSIS
3.3.3 DECISION TREES o Calculation of gearing ratio
o Constructions and interpretation of simple decision o Calculation of return on capital employed (ROCE)
tree diagrams o Interpreting ratios to make business decisions
o Calculations and interpretations of figures generated
by decision tree diagrams 3.5.3 HUMAN RESOURCES
o Limitations of decision trees o Calculation and interpretation of labour productivity
3.3.4 CRITICAL PATH ANALYSIS o Calculation and interpretation of labour turnover and
retention
o Nature and purpose of Critical Path Analysis o Calculation and interpretation of absenteeism
o Completion and interpretation of simple networks to o Human resource strategies to increase productivity and
identify the critical path retention and to reduce labour turnover and absenteeism
(financial rewards, employee share ownership,
3.4.1 CORPORATE INFLUENCES consultation strategies, empowerment strategies)
o Corporate timescales: short-termism versus long-
termism 3.6.1 CAUSES AND EFFECTS OF CHANGE
o Evidence-based versus subjective decision making o Causes of change (changes in organisational size, poor
business performance, new ownership, transformational
3.4.2 CORPORATE CULTURE leadership, market & other external factors (PESTLE)
o Strong and weak cultures o Possible effects of change on competitiveness,
productivity, financial performance, stakeholders
o Classification of company cultures (power, role, task,
person) 3.6.2 KEY FACTORS IN CHANGE
o How corporate culture is formed
o Organisational culture
o Difficulties in changing an established culture
o Size of organisation
3.4.3 SHAREHOLDERS VERSUS STAKEHOLDERS o Time / speed of change
o Internal and external stakeholders o Managing resistance to change
o Stakeholder objectives 3.6.3 SCENARIO PLANNING
o Stakeholder and shareholder influences
o Identifying key risks through risk assessment (natural
o Potential for conflict between profit-based
disasters, IT systems failure, loss of key staff)
(shareholder) and wider objectives (stakeholder)
o Planning for risk mitigation (business continuity,
3.4.4 BUSINESS ETHICS succession planning)

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THEME 4 – GLOBAL BUSINESS

4.1.1 GROWING ECONOMIES o Extending the product life cycle by selling in multiple
markets
o Growth rate of UK economy compared to emerging
economies 4.2.2 ASSESSMENT OF A COUNTRY AS A
o Growing economic power of countries within Asia, MARKET
Africa & other regions
o Factors to consider (levels and growth of disposable
o Implications of economic growth for individuals and income. Ease of doing business, infrastructure, political
businesses (trade opportunities for businesses, stability, exchange rate)
employment patterns)
o Indicators of growth (GDP, literacy, health, Human 4.2.3 ASSESSMENT OF A COUNTRY AS A
Development Index HDI) PRODUCTION LOCATION
4.1.2 INTERNATIONAL TRADE AND BUSINESS o Factors to consider (costs of production, skills &
GROWTH availability of labour force, infrastructure, location in
trade bloc, govt incentives, ease of doing business,
o Exports and imports political stability, natural resources, likely return on
o Link between business specialisation and competitive investment)
advantage
o Foreign direct investment (FDI) and link to business 4.2.4 REASONS FOR GLOBAL MERGERS OR
growth JOINT VENTURES
4.1.3 FACTORS CONTRIBUTING TO INCREASED o Spreading risk over different countries / regions
GLOBALISATION o Entering new markets / trade blocs
o Acquiring national / international brand names /
o Reduction of international trade barriers / trade patents
liberalisation
o Securing resources / supplies
o Political change
o Maintaining / increasing global competitiveness
o Reduced cost of transport and communication
o Increased significance of global (transnational) 4.2.5 GLOBAL COMPETITIVENESS
companies
o Impact of movements in exchange rates
o Increased investment flows (FDI)
o Competitive advantage through cost competitiveness /
o Migration (within and between economies) differentiation
o Growth of global labour force o Skill shortages and their impact on international
o Structural change competitiveness

4.1.4 PROTECTIONISM 4.3.1 MARKETING

o Tariffs o Global marketing strategy and global localisation
o Import quotas (glocalisation)
o Other trade barriers (government legislation, domestic o Different marketing approaches
subsidies) (domestic/ethnocentric, mixed/geocentric,
international/polycentric
4.1.5 TRADING BLOCS o Application and adaptation of the marketing mix (4Ps)
o Expansion of trading blocs (EU, ASEAN, NAFTA) to suit global markets
o Impact on businesses of trading blocs 4.3.2 NICHE MARKETS
4.2.1 CONDITIONS THAT PROMPT TRADE o Cultural diversity
o Push factors (saturated markets, competition) o Features of global niche markets
o Pull factors (economies of scale, risk spreading) o Application and adaptation of the marketing mix (4Ps)
to suit global niches
o Possibility of offshoring and outsourcing

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4.3.3 CULTURAL / SOCIAL FACTORS 4.4.2 ETHICS
o Considerations for businesses (cultural differences, o Stakeholder conflicts
different tastes, language, unintended meanings, o Pay and working conditions
inappropriate/inaccurate translations, inappropriate
o Environmental conditions (emissions, waste disposal)
branding and promotion
o Supply chain considerations (exploitation of labour,
4.4.1 IMPACT OF MNCs child labour)
o Marketing considerations (misleading product
o Impact of MNCs on the local economy (local labour,
labelling, inappropriate promotional activities)
wages, working conditions and job creation)
o Impact of MNCs on the national economy (FDI flows, 4.4.3 CONTROLLING MNCs
balance of payments, technology and skills transfer,
consumers, business culture, tax revenues and transfer o Factors to consider (political influence, legal control,
pricing) pressure groups, social media)

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