GCSE Business Studies
This resource is from the old specification (A*-C)
- Created by: CHEESECAKE
- Created on: 03-04-17 11:53
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- Business Studies
- Unit 1
- Unit 2
- Expanding a Business
- Methods
- Internal (organic) growth
- The business grows by hiring more staff and equipment to increase its output
- External growth
- When the business merges or takes over another organisation
- Combining two firms increases the scale of operation
- When the business merges or takes over another organisation
- Franchising
- Where a business leases its idea to franchises
- New branches can open internationally e.g. McDonalds
- Where a business leases its idea to franchises
- Internal (organic) growth
- Reasons
- Increase the sales of the business
- increased profits
- profits will not increase if the business has to lower its prices
- increased profits
- Increase the market share
- if sales grow faster than total market sales then share price will increase- retailers are more prepared to stock the businesses products
- Economies of scale
- Reducing the costs of producing each product and therefore being able to buy large quantities of material with bulk discounts
- Difficult to manage large businesses and could increase cost of making each product
- Reducing the costs of producing each product and therefore being able to buy large quantities of material with bulk discounts
- Feeling more secure as a business
- Customers trust large businesses to a higher extent compared to smaller businesses
- Large businesses can make losses and be forced out of business
- Customers trust large businesses to a higher extent compared to smaller businesses
- Increase the sales of the business
- Methods
- Legal structure
- private limited companies (ltd)
- cannot publically advertise its shares for sale
- often owned by family members
- possible to put restrictions on who buys the shares
- public limited companies (plc)
- adv.
- shares can go to the general public so more possible investors
- more money earned by selling shares and the money can be used to finance the companies expansion
- more media coverage because of more shareholders. more interest - cheap publicity
- more status than ltd's. This can impress customers.
- investors are willing to buy shares as they can be sold easily
- disadv.
- media coverage can cover a story on a mistake and this can make the company look bad
- a competitor my buy shares from the business and then take it over
- more regulated than a ltd (more laws). information can be given away to competitors or the media
- when an ltd becomes a plc there can be clashes between old and new owners
- adv.
- holding company
- holds shares in other companies and therefore controls what they do
- subsidiary company
- a business that is owned by another
- private limited companies (ltd)
- Changing the aims and objectives
- reasons
- because you have achieved them and now need to set new ones
- some of the original ones were not realistic
- the business has grown so the objectives will be different to when they started
- possible new objectives
- growth
- organic
- external
- high market share
- innovation
- diversification
- going international
- more customers
- offers a growing market
- allows further growth when growing in the UK becomes problematic
- may reduce risks from being in one country
- growth
- ethical and environmental considerations
- is child labour involved in production?
- are suppliers paid fairly and on time?
- does the company recycle?
- do they conserve energy?
- how do they control emissions?
- reasons
- Location
- Marketing Mix
- Product
- Price
- Promotion
- Place
- Finance for large businesses
- Profit and loss accounts and Balance sheets
- Organisation structures
- Recruitment of staff
- Production methods
- Challenges of growth
- Maintaining quality assurance
- Expanding a Business
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