Edexcel AS/A Level Business - Theme 3 Questions with Complete Solutions Rated A+

Corporate objectives - The objectives of a medium to large-sized business as a whole Departmental and functional objectives - The objectives of a department within a business Mission statement - A brief statement, written by the business, describing its purpose and objectives, designed to encapsulate its present operations Objective (or goal) - A target of or outcome for a business that allows it to achieve its aims SMART - Acronym for the attributes of a good objective: Specific, Measurable, Agreed, Realistic and Time Specific Corporate strategy - The plans and policies developed to meet a company's objectives. It is concerned with what range of activities the business needs to undertake in order to achieve its goals. It is also concerned with whether the size of the business organisation makes it capable of achieving the objectives set. Distinctive capability - A form of competitive advantage that is sustainable because it cannot easily be replicated by a competitor Diversification - Developing new products in new markets Market development - The marketing of existing products in new markets Penetration - Using tactics such as the marketing mix to increase the growth of existing products in an existing market Portfolio analysis - A method of categorising all the products and services of a firm (its portfolio) to decide where each fits within the strategic plans Product development - Marketing new or modified products in existing markets External audit - An audit of the external environment in which as business finds itself, such as the market within which it operates or government restrictions on its operations Internal audit - An analysis of the business itself and how it operates SWOT analysis - An analysis of the internal strengths and weaknesses of the business and the opportunities and threats presented by its external environment Trade association - An organisation whose members are all involved in the same industry or trade. The organisation pursues the interests of these businesses. Monopoly - A market dominated by a single business Oligopoly - A market dominated by a few large businesses PESTLE analysis - Analysis of the external political, economic, social, technological, legal and environmental factors affecting a business Diseconomies of scale - Rising long-run average costs as a business expands beyond its minimum efficient scale Economies of scale - The reductions in average costs enjoyed by a business as output increases External economies of scale - The cost reductions available to all business as the industry grows Internal economies of scale - The cost reductions enjoyed by a single business as it grows Minimum efficient scale - The output that minimises long-run average costs Backward vertical integration - Joining with a business in the previous stage of production