edemis International College & mont21school
< Montessori community >
Pearson Edexcel International GCSE in Business (4BS1)
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 Decisions on location
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 Business and the international economy
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 Internal and external communication
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
2.2.1   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.

2.2.4   Legal controls over employment and their effects:
· equal opportunities – gender, race, disability, religion, sexual preference, age
· minimum wage laws.

2.3 Training
2.3.1   Importance of training to a business and workers: · different types of training and the main purpose / induction / on-the-job / off-the-job
· compliance with health and safety laws
· benefits and limitations of training.

2.4 Motivation and rewards
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:
·· remuneration
·· bonus
·· commission o promotion
·· fringe benefits
· non-financial methods:
·· job rotation
·· 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 Business finance – sources
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.
4. 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:
·· survey
·· questionnaire
·· focus group
·· observation
·· test marketing
· secondary research:
·· internet
·· market reports
·· 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:
·· location
·· demographics o lifestyle
·· income o age.

4.3 The marketing mix
4.3.1   Product:
· development of a new product/service
· the difference between goods and services
· packaging and its importance
· product life cycle – main phases and extension strategies
· managing and reviewing the product portfolio (Boston matrix).

4.3.2   Price:
· the main pricing strategies and when they might be applied:
  cost plus
  penetration o competition o skimming

4.3.3   Place – distribution channels:
· methods of distribution
·· retailers
·· e-tailers (e-commerce).

4.3.4   Promotion:
· promotion strategies for different market segments:
·· advertising o sponsorship
·· product trials o special offers o branding
· above the line and below the line promotion techniques
· public relations – improving company image/brand
· the use of technology in promotion:
·· targeted advertising online
·· viral advertising via social media
·· e-newsletters
· the importance of a brand.

5. Business operations
5.1 Economies and diseconomies of scale
5.1.1   Economies of scale:
· internal (falling average total costs as output increases)

· external (falling average total costs due to external factors).

5.1.2   Diseconomies of scale:
· limits of growth.

5.2 Production
5.2.1   Production processes:
· different types:
·· job
·· batch
·· flow
· labour and capital intensive production
· the impact of different types of production
· calculation of productivity and the impact of productivity improvements.

5.2.2   Principles of lean production:
· just-in-time (JIT)
· Kaizen
· the importance of using resources effectively.

5.2.3      Impact of technology in production:
· use of robotics
· balancing cost, productivity, quality and flexibility.

5.3 Factors of production   
5.3.1   Changing relationships between enterprise, capital, land, and labour:
· difference between capital-intensive and labour-intensive activities.

5.4 Quality
5.4.1   The concept of quality and its importance in:
· the production of goods and the provision of services:
·· quality control
·· total quality management (TQM)
· allowing a business to gain a competitive advantage.
Component/paper code: 4BS1/01 and 4BS1/02
Paper 1: Investigating small businesses Paper codes 4BS1/01.
50% of the total International GCSE.
Availability: June.

Content summary: This paper will draw on topics taken from the whole of the subject content. The question scenarios are based on a small business – up to 49 employees.

Assessment: Examination of 1 hour and 30 minutes, consisting of four compulsory questions,
each worth 20 marks – total of 80 marks in Paper 1. The sub-questions are a mixture of multiple-choice, short-answer, data-response and open-ended questions. Calculators may be used in the examination.

Paper 2: Investigating large businesses Paper code 4BS1/02.
50% of the total International GCSE.
Availability: June.

Content summary: This paper will draw on topics taken from the whole of the subject content. The question scenarios are based on a large business – more than 250 employees.

Assessment: Examination of 1 hour and 30 minutes, consisting of four compulsory questions,
each worth 20 marks – total of 80 marks in Paper 2. The sub-questions are a mixture of multiple-choice, short-answer, data-response and open-ended questions. Calculators may be used in the examination.

Made on