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AS BUSINESS AQA REVISION GUIDE 2015/16 SPEC
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FULL SET OF REVISION NOTES FOR AQA BUSINESS LEVEL 1 2015/16 SPEC GRADE A ACHIEVED IN EXAM
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Unit 3 decision making to improve marketing performance
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BUSINESS AS REVISION GUIDEFinance formulas: Marketing formulas:
Revenue = selling price x units PED = % change in quantity demanded / % change in pri
(0 anything = inelastic, 1 anything = elastic)
GP = sales revenue – cost of sales
YED = % change in quantity demanded / % change in
OP = sales revenue – cost of sales – expenses income
GPM = GP/SR x 100 Market share = business sales/whole market x 100
OPM = OP/SR x 100 Market size change = change in size/original x 100
Profitability = GPM + OPM Market value = average selling price x output in market
Profit for the year = PFTY/SR x 100 Sales growth = change in sales between year (1x) and ye
/ sales of product or business in year (1x) x 100
Current ratio = current assets/current liabilities :1
Market growth = change in size of market between year
Breakeven (units) = fixed costs/CPU (1x) and year x / size of market in year (1x) x 100
Margin of safety – actual output – BE output Market capitalisation = current share price x no. shares
CPU = selling price – variable cost per unit
Return on investment = R.O.I/cost of investment x 100
ROCE = operating profit/total equity + non-current
liabilities x 100
Operations formulas: Human Resources (people) formulas:
Capacity utilisation = actual output/capacity x 100 Labour productivity = output/workers
Unit costs = total costs/no. units produced Labour turnover = no. staff leaving/no. staff employed x
Expected value (decision tree) = (EMV x probability) + Labour costs per unit = labour costs/output
(EMV x probability)
Net gain (decision tree) = expected value - costs
KEYWORDS:
,Aims – long term plans of the business from which its corporate objectives are derived
Objectives – medium to long term goals established to co-ordinate the business e.g. SMART
(Specific, Measurable, Agreed, Realistic, Time Specific)
Unlimited liability – when an individual or group of individuals are personally responsible for all their
actions of the business (lose personal assets if business suffers from financial problems e.g. sole
trader)
Limited liability – in the event of financial difficulties, the personal belongings of shareholders are
safe
Demand – the amount of a particular good/service that consumers or organisations want
Real incomes – incomes that are adjusted for the rate of inflation to show changes in purchasing
power
Fair trade – promotes improved trading terms and living conditions for producers of products in
LEDCs
Sustainable production – supply of a product does not impose costs on future generations
Management – planning, organising, directing and controlling
Decision tree – model that represents likely outcomes for a business of a number of courses of
action
Ethics – moral principles (should underpin business decisions and actions)
External environment – external forces that can influence a business’ activities
Stakeholders – groups or individuals who have an interest in the business
Scientific decision making – based on data and uses a logical, rational approach to decision making
FINANCE KEYWORDS:
Profit – revenues from selling a product exceed the costs incurred in producing it over a time period
Cash flow – amount of money moving in and out of a business
Total costs – made up of fixed costs and variable costs
MARKETING KEYWORDS:
Marketing objectives – target set for the marketing function e.g. increase sales by 10% within 3 years
Sales value – measures level of sales
Market share – measures the sales of one brand or business as a % of total market sales in a given
period
Market growth - % change in total sales in the market over a given period
Sales growth - % change in sales volume/value
Internal influences – factors within the business e.g. employees, operational resources
External influences – factors outside the business e.g. state of the economy
Market research – gathering and analysing data relevant to the marketing process
, Market mapping – analyses market conditions to identify the position of a product/brand relative to
others in the market
Brand – conveys to consumers a certain assurance as to the nature of the product or service
Price elasticity of demand – measures how responsive demand is to changes in price
Income elasticity of demand – measures how responsive demand is to changes in income
Niche market – particular segment of the market
Mass market – approach aims to provide products for large part of the market
Marketing mix – combination of marketing choices that can be used by a business to influence
consumers to buy products
Product life cycle – model shows the sales of a product over its life
Product portfolio – examines market position of all products within a business
Boston matrix – analyses business’ products in terms of their market share and market growth
Multi-channel distribution – customers can buy the products in several ways
Market conditions – features of a market e.g. level of sales, rate at which they are changing, strength
of competitors
OPERATIONS KEYWORDS:
Labour intensive – relatively high production of labour in the production is used compared to capital
equipment e.g. hairdressing
Capital intensive – relatively high proportion of capital equipment relative to labour e.g. bottling
process
Operations objective – target set for the operations function
Capacity – maximum output of a business at a moment in time given its resources
Capacity utilisation – measures the existing output over a given period as % of the max output
Efficiency – measured by the inputs used to generate output
Lean production – occurs when managers reduce waste = operations become more efficient
Quality – extent to which an operation meets its customer requirements – “fit for purpose”
Quality assurance – maintenance of target quality by attention to detail at every stage of the process
Quality control – system of maintaining standards by testing the output against standards
Inventory – stock/goods
Outsourcing – business uses an outside supplier
HUMAN RESOURCES KEYWORDS:
Labour productivity – amount of output per employee
Unit labour costs – measures the labour cost per unit of output produced
Labour turnover - % of a business’s employees who leave the business over some period of time
HR plan – assesses current/future capacity of business’s workforce and sets out actions necessary to
meet the business’s future HR needs
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