3.1

• Market share: the portion of a market controlled by a particular company or product.
• Competitive advantage: a feature or features of the business that allows it to perform better than others in the industry.
• Marketing mix: the combination of elements of marketing that are used to influence customers buying habits.
• The SEVEN Ps of the marketing mix can be summarised as product, price, place, promotion, people, process and physical environment.
• Total costs: calculated by adding together fixed and variable costs.
• Fixed costs: costs which do not vary directly with the level of output.
• Variable costs: costs which do vary directly with the level of output.
• An established company would be owned by shareholders who demand high dividends to give them a return on their investment.
• If a business has the following information: it sold 75,000 items, the average selling price was £150, its fixed costs were £4.5 million, and its average production cost per unit of production was £85, it made a profit of £375,000.
• By cutting wage costs or laying off workers, staff would suffer from low morale and customers could become unhappy if the quality of material used in the product worsens in order to cut costs.
• Just because a sale is made it doesn’t mean the cash will arrive yet, for example, furniture is often sold on a “buy now, pay next year” basis.
• Car firms sell on finance deals so the car sale does not result in an immediate cash injection.
• Sole traders setting up a new firm may be more concerned with building up a customer base and covering their costs to survive.
• Sales and the number of units sold are calculated as follows:
• Total costs (TC) are calculated as fixed costs (FC) plus variable costs (VC).
• 200 x £1.30 = £260
• Revenue (TR) is calculated by multiplying the selling price (SP) by the number of units sold (No. of units).
• A business has total costs of £12.5 million for producing 500,000 items, with a variable cost per unit of £20.
• Calculating costs, revenue and profit involves understanding fixed costs, variable costs, total costs, and profit.
• Fixed costs are costs that do not vary directly with the level of output, such as rent.
• Revenue is another term for sales achieved.
• The relationship between mission and objectives is to understand why businesses exist and to know common business objectives that exist, why businesses set objectives and the relationship between mission and objectives.
• Businesses exist to understand common business objectives such as profit, revenue, and cost.
• Businesses exist to understand common business objectives such as profit, revenue, and cost.</flashcard
• Businesses set objectives to understand the relationships between mission and objectives.
• Business objectives can be developed from given businesses missions.
• The relationship between mission and objectives can be analysed.
• It is difficult to cut costs and keep shareholders happy because of the various external factors that can affect costs and demand.
• Dividends are a portion of profit paid to shareholders.
• The formula for profit is: Total Revenue minus Total Expenses equals Profit.
• By the end of the lesson, students should be able to identify and explain the impact of external factors on costs and demand.
• You could be able to evaluate which external factors have a bigger impact on costs and demand.
• You should be able to analyse how external factors can affect costs and demand in relation to given businesses.
• Objectives are specific, measurable, achievable, relevant, and time-bound.
• A public sector organization is an entity that operates for the benefit of the public.
• Divorce of ownership and control means that a firm sells 400 units at £2.30, resulting in total revenue of £920.
• The external environment consists of factors such as competition, market conditions, incomes, interest rates, and demographic factors.
• PEST Analysis is an analysis tool used by firms to assess their external environment, indicating the opportunities and threats.
• Changes in legislation can impact the workings of a business.
• Foreign Trade can affect a business' costs and demand.