Paper 2

• What are aims and objectives used for in a business?

  To run a business effectively
• Why can aims and objectives change?

  Because the business and its environment change
• What are the reasons a business might change its aims and objectives?

  • Change in focus from survival to growth
  • Change in workforce size
  • Entering or exiting new markets
  • Change in product range
• What is a new start-up business likely to focus on initially?

  Survival
• What might a stable business aim for after survival?

  Growth and maximizing profits
• How might economic downturns affect a business's aims?

  They may shift back to survival focus
• What might a business aim to do if it is expanding?

  Recruit more staff
• Why might a business reduce its workforce after a takeover?

  To avoid duplication of roles
• What could prompt a business to enter a new market?

  Growth or shrinking existing markets
• What might a business do if a product isn't selling well?

  Change aims to exit that market
• What might a business do if a product is selling well?

  Expand the product range
• What happened to Classic Covers Ltd. after a major brand went bust?

  They shifted focus to survival
• What are the external reasons for changing business aims and objectives?

  • New legislation
  • Changes in market conditions
  • Changes in technology
• How might market growth affect a company's aims?

  They may focus on growing sales
• What happens if a market becomes more competitive?

  Companies may focus on maintaining market share
• Why do companies need to keep up with technology?

  To remain competitive
• What are the internal reasons for changing business aims and objectives?

  • Performance changes
  • Internal changes like management shifts
• How can a company's performance affect its aims?

  Better performance may lead to increased sales objectives
• What can cause internal changes in a company?

  Management changes
• Why do businesses need to adapt to changes in their environment?

  To avoid problems
• What is globalisation?

  • Process of increased global connectivity
  • Easier import and export of products
• What is one effect of globalisation on imports?

  Firms can buy supplies more cheaply
• How does globalisation affect exports?

  Firms have a larger market to sell to
• What is a multinational business?

  A business operating in more than one country
• What is a barrier to international trade?

  Tariffs imposed by governments
• What are tariffs?

  Taxes on imported or exported goods
• What are trade blocs?

  Groups of countries with few trade barriers
• How can firms compete internationally?

  • Use e-commerce for online sales
  • Adapt marketing mix for different countries
• How does McDonald's adapt its menu in different countries?

  By catering to local tastes
• What are ethical considerations for businesses?

  Fair and honest treatment of stakeholders
• What are ethics in a business context?

  Moral principles of right and wrong
• Why do firms have ethical policies?

  To ensure fair and honest practices
• What are some international ethical issues businesses face?

  • Exploitation of workers in low-wage countries
  • Ensuring ethical treatment in overseas factories
  • Fairtrade sourcing of raw materials
• What should businesses do to treat employees ethically in the UK?

  Reward staff fairly and provide privacy
• What must firms follow when promoting products?

  Codes of practice for honesty
• What is a downside of acting ethically for businesses?

  Higher labor costs due to fair wages
• How can ethical practices benefit a business?

  They can attract customers and investors
• What are the pros and cons of being environmentally friendly for businesses?

  Pros:

  • Attracts environmentally conscious customers
  • Competitive advantage

  
  

  Cons:

  • Higher costs for sustainable practices
  • Potentially lower profits
• What is one way businesses can reduce their environmental impact?

  Use less packaging and recycle more
• Why are consumers changing their buying decisions?

  Increased awareness of environmental issues