IGCSE Business Studies O Level

Table of contents

Assessment

Paper 1:  1 hour 30 minutes. Short Answer and Data Response (50%). 80 marks 

Paper 2: 1 hour 30 minutes. Case Study (50%). 80 marks

Compliment

Chapter 3 Enterprise, business growth and size

Entrepreneur is a person who organises, operates and takes the risk for a new business venture. The entreperneur also claims the rewards

Reason new businesses fail: 

• lack of finance and resources, 

• poor planning 

• inadequate research 

• lack the experience and decision-making skills

A takeover or acquisition is when one business buys out the owners of another business, which then becomes part of the ‘predator’ business (the business which has taken it over).

Chapter 4 Types of business organisation

Advantage To the franchisor

• The franchisee buys a licence from the franchisor to use the brand name

• Expansion of the franchised business is much faster than if the franchisor had to finance all new outlets

• The management of the outlets is the responsibility of the franchisee

• All products sold must be obtained from the franchisor

Disadvantage To the franchisor

• Poor management of one franchised outlet could lead to a bad reputation for the whole business

• The franchisee keeps profits from the outlet

Chapter 6 Motivating employees

Job rotation involves workers swapping around and doing each specific task for only a limited time and then changing around again.

Financial Motivation

• wage

• salary

• bonus

• commission

• profit sharing

Non-Financial Motivation

• job satisfaction

• job rotation

• job enrichment

• Teamworking

• Training

• Opportunities for promotion

• Job enlargement 

• Praise (This is FREE)

• Recognition 

• Delegation 

Maslow

• self-actualisation

• esteem needs

• social needs

• safety/security needs

• physiological needs

Herzberg

• Motivators

  • achievement

  • recognition

  • personal growth/development

  • advancement/promotion

  • work itself

• ‘Hygiene’ (or ‘maintenance’) factors

• status

• security

• work conditions

• company policies and administration

• relationship with supervisor

• relationship with subordinates

• salary

Chapter 8 Recruitment, selection and training of employees

~ External recruitment

Chapter 10 Marketing, competition and the customer

Benefits to a business of using market segmentation. 

• Able to tailor goods to specific needs of segment/know what to produce

• Identify gaps in the market

• To help decide best place to sell

• Research is simpler

• Help focus spending/make best use of resources

• Help target promotion/advertising

• Help set prices

• Help increase sales/revenue

Chapter 12 The marketing mix: product

How stages of the product life cycle influence marketing decisions for pricing?

• During introductory stage the business may set a low price to attract customers to their hand cream

• At growth stage prices may be lowered due to increased competition 

• At maturity stage price is likely to be similar to competitors to retain market share [an] for the branded products

• During decline stage discounts might be offered to maintain sales/ sell of remaining inventory 

• Skimming pricing can be used at the introductory stage to recover development costs [an] of new packaging [app]

• Penetration pricing in some market segments

• Cost plus pricing 

• Competitive pricing 

• Promotional pricing

Chapter 13 The marketing mix: price

~Price elasticity of demand

Price elastic demand is where consumers are very sensitive to changes in price. 

Price inelastic demand is where consumers are not sensitive to changes in price.

Chapter 19 Costs, scale of production and break-even analysis

Chapter 22 Business finance: needs and sources

Chapter 23 Cash flow forecasting and working capital

Profit =  Revenue – Cost of goods sold 

Chapter 24 Income statements

Net profit (also known as 'profit') is calculated by deducting all expenses and overheads of the business from gross profit.

Chapter 26 Analysis of Account

Profitability Ratio

• Gross profit margin/ratio/percentage

• Profit margin/ratio/percentage

• Return on capital employed/ROCE

Chapter 27 Economic issues

Inflation is the increase in the average price level of goods and services over time. 

Example of inflation: 

Let’s say you enjoy a scoop of ice cream that used to cost $2. Now, when you go to the ice cream shop, the same scoop costs $3. You need more money to buy the same ice cream because of inflation.

Central Banks play a vital role in maintaining stability in the financial system. Additionally, the policy tools at their disposal help to meet Government economic objectives & create economic growth.

• Implementation of monetary policy

• Banker to the government: The Government sets the annual budget but it is the Central Bank that manages the tax receipts & payments. In 2022 there were 5.7 million public sector workers in the UK who had to be paid by the Central Bank each month

• Banker to the banks – lender of last resort: Commercial banks are able to borrow from the Central Bank when they run into short-term liquidity issues. Without this help, they might go bankrupt leading to instability in the financial system - & a potential loss of savings for many households

• Regulation of the banking industry: the high level of asymmetric information in financial markets requires that commercial banks are regulated in order to protect consumers

Chapter 28 Environmental and ethical issues

• Pay fair wages ...

• Ensure fair working conditions for employees ...

• Pay suppliers on time when buying ... 

• Pay fair price to suppliers 

• Charge customers fair prices / not fix prices with competitors

• Source environmentally friendly materials / less pollution / not dump waste / use renewable energy 

Text Book

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