WJEC Eduqas A Level Business Study Guide

Specification Overview and Assessment Structure

• Qualification Details: The WJEC Eduqas GCE A Level in Business is a linear qualification designed for teaching from 2015 and first award from 2017. It is regulated by Ofqual (Qualification Accreditation Number: 601/4868/8) but not available to maintained schools and colleges in Wales.
• Assessment Philosophy: The specification uses contemporary contexts to nurture enthusiasm, focusing on the strategic, complex, and interrelated nature of business from local to global perspectives.
• Component 1: Business Opportunities and Functions
  • Structure: Written examination, $2$ hours $15$ minutes, $80$ marks ($33\frac{1}{3}\%$ of total).
  • Format: Section A (short-answer questions) and Section B (data response questions).
  • Scope: Covers new business start-ups, small and medium-sized enterprises (SMEs), and core business functions (Marketing, Finance, People, Operations).
• Component 2: Business Analysis and Strategy
  • Structure: Written examination, $2$ hours $15$ minutes, $80$ marks ($33\frac{1}{3}\%$ of total).
  • Format: Compulsory data response and structured questions.
  • Scope: Uses Component 1 as a foundation, focusing on analytical techniques (decision-making models, investment appraisal) and strategic decision-making.
• Component 3: Business in a Changing World
  • Structure: Written examination, $2$ hours $15$ minutes, $80$ marks ($33\frac{1}{3}\%$ of total).
  • Format: Section A (case study questions) and Section B (choice of one synoptic essay from three).
  • Scope: Focuses on the dynamic external environment, including PEST factors, globalization, and risk management.

Component 1: Business Opportunities and Functions

• Enterprise and SMEs
  • Definitions: Explaining the meaning of enterprise and SMEs.
  • Role of the Entrepreneur: Investigating motives (financial and non-financial), characteristics, skills, and their impact on the primary, secondary, and tertiary sectors of the UK economy.
• Business Plans: Understanding the components and evaluating the importance of a plan to an entrepreneur.
• Markets and Competition
  • Types: Mass vs. niche, local vs. global, trade vs. consumer, product vs. service.
  • Market Structure: Features and impacts of perfect competition, monopolistic competition, oligopoly, and monopoly ($1$ firm dominating).
  • Demand and Supply: Constructing and interpreting diagrams to show equilibrium, price, and quantity changes. Factors shifting curves include consumer tastes and income.
  • Elasticity: Understanding Price Elasticity of Demand (PED) and Income Elasticity of Demand (YED) (calculations not required in Component 1).
• Business Revenue, Costs, and Break-even
  • Types of Costs: Fixed, variable, semi-variable, direct, and indirect (overhead).
  • Calculations:
    • $\text{Total Costs} = \text{Fixed Costs} + \text{Variable Costs}$
    • $\text{Contribution per unit} = \text{Selling Price} - \text{Variable Cost per unit}$
    • $\text{Break-even point} = \frac{\text{Fixed Costs}}{\text{Contribution per unit}}$
  • Break-even Charts: Plotting the margin of safety and conducting "what-if" analysis.
• Marketing
  • Product Life Cycle: Stages (Research, Introduction, Growth, Maturity, Decline) and extension strategies.
  • Boston Matrix: Tool for managing product portfolios based on market share and growth.
  • Pricing Strategies: Penetration, skimming, cost-plus, competitive, psychological, and contribution-based pricing.
  • Promotion: Above the line (mass media) and below the line (targeted) strategies.
• Finance
  • Sources of Finance: Internal (retained profit, sale of assets) vs. external (loans, share capital, venture capital, debt factoring).
  • Cash Flow: Constructing and interpreting forecasts; evaluating strategies to improve liquidity.
  • Income Statement: Calculating Gross Profit and Net Profit; ratios ($\text{Margin} = \frac{\text{Profit}}{\text{Sales Revenue}} \times 100$).

Component 2: Business Analysis and Strategy

• Sales Forecasting
  • Quantitative: Calculating a three-point moving average, scatter graphs, lines of best fit, and extrapolation.
  • Qualitative: Delph method, brainstorming, and intuition.
• Financial Performance Analysis
  • Balance Sheet: Components like working capital, capital employed, and depreciation (straight-line method).
  • Ratios:
    • $\text{ROCE} = \frac{\text{Operating Profit}}{\text{Capital Employed}} \times 100$
    • $\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$
    • $\text{Acid Test Ratio} = \frac{\text{Current Assets} - \text{Stock}}{\text{Current Liabilities}}$
    • $\text{Gearing} = \frac{\text{Long-term Liabilities}}{\text{Capital Employed}} \times 100$
• Strategy and Growth
  • Models: SWOT analysis, Porter’s Five Forces, and the Ansoff Matrix.
  • Growth Methods: Organic vs. external (mergers/takeovers); horizontal and vertical integration.
• Decision-Making Models
  • Decision Trees: Calculating expected value and net gain to evaluate risks.
  • Critical Path Analysis (CPA): Identifying the shortest completion time for a project.
  • Cost Benefit Analysis (CBA): Including social costs and benefits in decision-making.
• Investment Appraisal
  • Payback Period: Time taken to recover the initial investment cost.
  • Average Rate of Return (ARR): Percentage return over the life of the investment.
  • Net Present Value (NPV): Using discounted cash flow (DCF) to account for the time value of money.

Component 3: Business in a Changing World

• Change and Risk Management
  • Change: Managing resistance using Lewin’s three-step process; evaluating J. Storey's approaches.
  • Risk: Distinguishing between insurable and uninsurable risks; contingency planning vs. crisis management.
• PEST Factors
  • Political: Fiscal policy (taxation) and monetary policy (interest rates).
  • Economic: Business cycle (GDP), inflation, exchange rates, and unemployment.
  • Social: Demographic changes and cultural shifts.
  • Technological: Impacts of automation, CAD/CAM, and robotics.
• Globalization and International Trade
  • Trade: Free trade vs. protectionism (tariffs and quotas); the role of trading blocs.
  • Multinationals: Impact on host countries and strategies like "glocalisation" (adapting products for local needs).
  • European Union: Impact of the Single Market and the costs/benefits of the Eurozone membership.

Assessment Objectives (AO)

• AO1: Knowledge: Demonstrate knowledge of terms and theories ($24-26\%$ weighting).
• AO2: Application: Apply knowledge to various business contexts ($24-26\%$ weighting).
• AO3: Analysis: Analyze internal/external influences and their impacts ($24-26\%$ weighting).
• AO4: Evaluation: Evaluate information to make evidence-based judgements ($24-26\%$ weighting).