Past Paper Business

• Factors to be considered when choosing business location:

  • Close to raw materials - to reduce transport cost
  • availability of land - room to expand facilities
  • The location does not have any competition nearby - sales are likely to increase
  • close to labour market - to attract staff with necessary skills
• Justify the use of ethical production:

  • better for the environment
  • improves the image of an organisation - leading to increased sales
  • Can give a competitive edge
  • May help the organisation win awards
  • Attracts a quality workforce
• Advantages/disadvantages of packaging

  Provides protection during transport - decreasing waste

  provides easy recognition of a product/brand

  Provides customer appeal - increasing sales

  cost of producing packaging - reducing profit

  environmental impact
• Describe sectors of economy

  Private Sector

  organisations owned by private individuals

  financed by owners personal savings

  key aim to make a profit

  Public Sector

  Organisations owned by the Government

  Financed through taxpayer money

  Key aim to provide services for the public

  Third Sector

  Owned by private individuals

  Social enterprises reinvest profit

  financed through donations/subscriptions
• Stakeholder influences on a charity

  Volunteers may refuse to work - cant provide its services

  donors may stop donation money to the cause - leaves the charity with no money to fund its work

  Government can provide funding or support for the charity - means it can survive/expand its work

  Managers may make poor decisions - means a loss of reputation for a charity
• Benefits of staff training

  Higher quality products - which will improve customer satisfaction

  Reduce staff turnover - which will reduce the cost of recruitment and selection

  Staff develop new skills - higher chance of promotion

  Good reputation - attract new customers
• Purpose of a cash budget

  Can be used as a target - this means the business may be able to plan

  Highlights any period of shortfall - allows business to arrange a source of finance

  Highlights any increases in expenses over a period of time - this means the business is able to take corrective action

  Promotes better decision making - this means the business is able to plan future direction of the business
• Overstocking/understocking

  UNDERSTOCKING

  Harder to cope with unexpected changes in demand - customers may go elsewhere

  Production may stop or slow down - paying for employees who aren't producing any goods

  Continually ordering or restocking can mean increased administration costs

  OVERSTOCKING

  Increase the cost of storage - decrease profits

  Capital is tied up in stocks - money cannot be used elsewhere

  Stock may deteriorate - larger wastage costs

  Changes in trends and fashion - stock might become obsolete

  Higher risk of theft - increase in security costs
• Advantages of branding

  Brands are easily recognised - customers may buy more due to them being familiar - easier to launch new products - reduces advertising costs

  Brand loyalty can develop - which could lead to repeat purchases

  Customers willing to pay more for branded product - increase in profits
• Justify methods of advertising

  Social Media

  Direct customers to websites to allow immediate purchases

  Target the advert to specific groups

  Attracts customers worldwide

  24/7 advertising

  Magazines

  Can persuade consumers as many believe what they read

  Use of colour and graphics can make the advert more appealing

  Tap into loyalty of a newspaper/magazine

  Television

  Often easier to remember these types of adverts

  Can target specific market segments

  Can target specific geographical locations