Gcse Business Pearson Edexcel

just the main ideas, hevily summarised. used to only refresh memory

What is a need?

Something essential for survival, such as food, water, or shelter.

What is a want?

Something a person would like to have but does not need for survival.

What are the four factors of production?

Land, labour, capital, and enterprise

What is enterprise?

The willingness to take risks and organise the other factors of production.

What is added value

The difference between the selling price of a product and the cost of the inputs.

How can a business increase added value?

Through branding, quality, unique features, or customer service.

What is the primary sector?

Businesses involved in extracting natural resources.

What is the secondary sector?

Businesses involved in manufacturing products.

What is the tertiary sector?

Businesses that provide services.

What is a sole trader?

A business owned and run by one person.

State one advantage of being a sole trader.

The owner keeps all the profit.

State one disadvantage of being a sole trader.

The owner has unlimited liability.

What is unlimited liability?

The owner is personally responsible for business debts.

What is a partnership?

A business owned by two or more people.

What is a private limited company (Ltd)?

A business owned by shareholders with limited liability.

A business owned by shareholders with limited liability.

Owners can only lose the amount they invested in the business.

What is a franchise?

A business that buys the right to use another company’s brand and business model.

One advantage of a franchise?

The business has an established brand name.

One disadvantage of a franchise?

Franchise fees must be paid.

What is a business objective?

A target or goal set by a business.

Give three common business objectives.

Profit, survival, and growth.

What is survival as a business objective?

Staying in business and covering costs.

What is market share?

The percentage of total market sales a business has.

What is customer satisfaction?

Meeting customer expectations and needs.

What is a stakeholder?

Any person or group affected by the business.

Give examples of stakeholders.

Customers, employees, suppliers, owners, and the government.

Why do stakeholder objectives conflict?

Different groups want different outcomes from the business.

What is internal growth?

Expansion using the business’s own resources.

What is external growth?

Growth through mergers or takeovers.

What is a merger?

When two businesses join together.

What is a takeover?

When one business buys another.

What is horizontal integration?

Joining with a business at the same stage of production.

What is vertical integration?

Joining with a business at a different stage of production.

State two factors affecting business location

Costs and proximity to customers.

Why might a business relocate?

To reduce costs or expand.

What is e-commerce?

Buying and selling products online.

One advantage of e-commerce?

Businesses can reach a wider market.

One disadvantage of e-commerce?

Cybersecurity risks.

One advantage of technology in business?

Increased productivity.

One disadvantage of technology in business?

High setup costs.

What is recruitment?

The process of hiring employees.

What is a job description?

A document outlining duties and responsibilities.

What is a person specification?

A document showing the skills and qualities needed for a job.

What is internal recruitment?

Hiring someone already working in the business.

One advantage of internal recruitment?

It motivates employees.

What is external recruitment?

Hiring someone from outside the business.

One advantage of external recruitment?

New skills and ideas.

What is induction training?

Training given to new employees.

What is on-the-job training?

Training while working.

What is off-the-job training?

Training away from the workplace.

What is a tall organisational structure?

Q: What is a tall organisational structure? A:

One advantage of a tall structure?

Close supervision.

One disadvantage of a tall structure

Slow communication.

What is a flat organisational structure?

A structure with few levels of management.

One advantage of a flat structure?

Faster communication.

One disadvantage of a flat structure?

Managers may become overloaded.

What is centralisation?

Decision-making kept with senior managers.

What is decentralisation?

Decision-making shared with lower managers.

What is motivation?

The willingness of employees to work hard.

Give two financial methods of motivation

Bonuses and commission.

Give two non-financial methods of motivation.

Praise and promotion opportunities.

Why is motivation important?

It can increase productivity and reduce labour turnover.

What is the marketing mix?

The combination of product, price, place, and promotion.

What does product mean in the marketing mix?

The goods or services being sold.

What does price mean in the marketing mix?

The amount customers pay.

What does place mean in the marketing mix?

Where the product is sold.

What does promotion mean in the marketing mix?

Methods used to advertise and persuade

What is market segmentation?

Dividing customers into groups with similar characteristics.

What is market research?

Collecting information about customers and markets.

What is primary market research?

Research collected first-hand.

What is secondary market research?

Using existing information collected by others.

What is branding?

Creating a unique image or identity for a product.

What is product differentiation?

Making products different from competitors

What is the product life cycle?

The stages a product goes through from development to decline.

What is revenue?

Money received from sales.

What is profit?

Revenue minus total costs.

What are fixed costs?

Costs that do not change with output.

What are variable costs?

Costs that change with output.

What is break-even?

The point where total costs equal total revenue.

What is cash flow?

Money coming into and going out of a business.

What is a cash flow forecast?

A prediction of future cash inflows and outflows.

What is retained profit?

Profit kept in the business for future use.

What is an overdraft?

Borrowing money from a bank through a current account.

What is trade credit?

Buying goods now and paying later.

What is job production?

Producing one item at a time.

What is batch production?

Producing goods in groups.

What is flow production?

Continuous production of identical products.

What is lean production?

Reducing waste and improving efficiency.

What is just in time (JIT)?

Receiving stock only when needed.

One advantage of JIT

Lower storage costs.

One disadvantage of JIT

Risk of running out of stock.

What is quality control?

Checking products after production.

What is quality assurance?

Checking quality during production.

Why is customer service important?

It helps increase customer loyalty and repeat purchases.

What can poor customer service lead to?

Complaints and loss of sales.

What is inflation?

A rise in the general price level.

What are interest rates?

The cost of borrowing money.

What is an exchange rate?

The value of one currency compared to another.

Why are health and safety laws important?

They protect employees and customers.

why do businesses become environmentally friendly?

To improve reputation and reduce environmental damage.