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AQA A-Level Business 7132
What Is Business?
Topic overviewWhy businesses exist and their objectivesRevenue, costs and profitCalculating and presenting business dataBusiness forms, sectors and liabilityShare capital, market capitalisation and dividendsWhat moves a share price, and how ownership shapes objectivesCompetition, market conditions and incomesInterest rates, demographics and environmental issues
Managers, Leadership and Decision Making
Topic overviewManagement, leadership and the four leadership stylesThe Tannenbaum Schmidt continuumChoosing a leadership style and its limitationsScientific and intuitive decision making, and expected valueReading a decision treeRisk, uncertainty and opportunity costWhat influences a management decisionStakeholders and stakeholder mappingStakeholder needs and managing the relationship
Marketing Management
Topic overviewWhy businesses set marketing objectivesBrand loyalty and calculating the marketing measuresPrimary and secondary market researchSampling methodsCorrelation, confidence intervals and extrapolationPrice and income elasticity of demandCalculating market share, market growth and sales growthSegmentation and the bases for itNiche and mass marketing, targeting and market mappingThe elements of the marketing mixProduct portfolio analysis and the Boston MatrixThe product life cycle and extension strategiesPricing, branding, place and the influences on the mix
Operational Management
Topic overviewOperational objectives: cost and qualitySpeed, flexibility and environmental objectivesAdded value and the trade-offs between objectivesLabour productivity and unit costsCapacity and capacity utilisationImproving capacity utilisationRaising labour productivity, and the obstaclesLean production and Just in TimeLabour-intensive and capital-intensive productionTechnology in operationsQuality control and quality assuranceThe benefits and costs of improving qualityMatching supply to demandThe inventory control chartInfluences on inventory and choosing a supplierSupply chain managementOutsourcing: benefits and drawbacks
Financial Management
Topic overviewFinancial objectives and return on investmentGross profit, operating profit and profit for the yearBudgets and variance analysisCash flow forecastsBreak-even, contribution and the margin of safetyBreak-even charts and how they shiftThe uses and limits of break-even analysisProfit margins, payables and receivablesInternal sources of financeShort-term external financeShare capital, loans, venture capital and crowd fundingChoosing a source of financeMethods of improving cash flowMethods of improving profitsThe difficulties and trade-offs in improving cash flow and profit
Human Resource Management
Topic overviewHuman resource objectives and their valueHard and soft human resource managementCalculating labour turnover and labour productivityEmployee costs as a percentage of turnover, and labour cost per unitUsing and interpreting human resource dataTypes of organisational structureSpan of control, hierarchy and delegationHuman resource flowThe value of a motivated workforce, and TaylorMaslow's hierarchy of needsHerzberg's two-factor theoryFinancial methods of motivationNon-financial methods of motivationChoosing and assessing methods of motivationEmployee involvement and the influences on itTrade unions, works councils and communication channelsThe value of good employer-employee relations
Analysing the Strategic Position of a Business
Topic overviewInfluences on the mission and corporate objectivesMission, objectives, strategy and tacticsFunctional objectives and their influencesSWOT analysis and its limitationsReturn on capital employed and the current ratioGearing and the ratios of working capitalFinancial statements and the categories of ratioUsing ratio analysis, and its limitsNon-financial measures of performanceBenchmarking and core competencesThe Triple Bottom LineCompetition law and labour market legislationEnvironmental legislation and government supportRegulators, infrastructure and environmental incentivesTrade policy and responding to political changeGDP, taxation and exchange ratesInflation, fiscal policy and monetary policyTrade, protectionism and responding to economic changeDemographic and social changeCorporate social responsibility and its criticsCarroll's pyramid and technological changePorter's five forces: entry and buyer powerSupplier power, rivalry and substitutesUsing five forces to shape strategyPayback period and average rate of returnNet present value and the time value of moneyInvestment criteria, risk and sensitivity analysis
Choosing Strategic Direction
Strategic Methods: How to Pursue Strategies
Topic overviewOrganic growth, external growth and retrenchmentEconomies and diseconomies of scale, synergy and overtradingMethods of external growthThe advantages and disadvantages of organic and external growthProduct and process innovation and its driversKaizen, research and development, and intellectual propertyThe causes of globalisation and its opportunitiesMethods of entering international marketsChoosing a country to trade with or invest inOff-shoring, re-shoring and multinationalsGlobal, multi-domestic and transnational strategiesDigital technology and the pressure to adopt itThe value and the limits of digital technology
Managing Strategic Change
Topic overviewTypes of change and Lewin's force field analysisFlexible organisations, restructuring and delayeringReasons for resistance and overcoming it through education, participation and supportOvercoming resistance: negotiation, manipulation and coercionOrganisational culture and Handy's four typesRecognising cultures and what shapes themChanging organisational culture and the difficultiesLeadership, communication and structure in implementationNetwork analysis and reading a network diagramFloat, the critical path and the value of network analysis
Problems with Strategy and Why Strategies Fail
Topic overviewUncertainty and cognitive bias in strategic decisionsResource and organisational barriers to implementationPlanned and emergent strategyReasons for strategic driftFinancial and non-financial measures of strategic performanceThe balanced scorecard, KPIs and the limits of evaluationThe value of strategic planningContingency planning and crisis management
Problems with Strategy and Why Strategies Fail
- 8 subtopics
- 22 things to know
- Papers 1, 2 and 3
What Problems with Strategy and Why Strategies Fail covers
Problems with strategy is examined on Papers 1, 2 and 3, and closes the course. It asks why strategies fail: the biases and constraints behind a bad decision, the gap between the plan and what emerges, and the difficulty of judging whether a strategy worked at all.
Where it is assessed
Papers 1, 2 and 3
All three papers may draw on any part of the specification.
Check the AQA specification ↗The 8 subtopics
Each one has its own page.
- Uncertainty and cognitive bias in strategic decisionsOverconfidence, anchoring, confirmation bias, groupthink, short-termism and bounded rationality.Open →
- Resource and organisational barriers to implementationFinance, people, time, culture, communication and stakeholder conflict as barriers.Open →
- Planned and emergent strategyMintzberg on intended, deliberate, emergent and unrealised strategy, and when each suits.Open →
- Reasons for strategic driftPast success, the paradigm, path dependency, poor environmental monitoring, and how drift ends in crisis.Open →
- Financial and non-financial measures of strategic performanceProfitability, liquidity and shareholder returns, against satisfaction, engagement, reputation and innovation.Open →
- The balanced scorecard, KPIs and the limits of evaluationThe four perspectives, choosing KPIs, and why time lags and external factors confuse attribution.Open →
- The value of strategic planningDirection, stakeholder alignment, resource allocation, motivation and preparedness for change.Open →
- Contingency planning and crisis managementBusiness continuity and scenario planning, what they cost, and the part communication plays in a crisis.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Numbers
What is bounded rationality, and what is strategic drift?
Process
How do stakeholders, time and people constrain the implementation of strategy?
Process
What is the consequence of lacking appropriate control and monitoring systems during strategy implementation?
Numbers
What are planned and emergent strategy, and how are decisions made in each?
Evaluation
What are the strengths and risks of planned and emergent strategy?
Key term
Distinguish between intended strategy and realised strategy.
Process
How does incremental change differ from transformational, and what is path dependency?
Process
What is an organisation's paradigm, and what happens as drift reaches crisis?
Evaluation
Describe the typical pattern that strategic drift follows over time.
Numbers
What does strategic performance evaluation involve, and what do liquidity ratios show?
Evaluation
What do engagement, brand reputation and the learning perspective measure?
Evaluation
Why must KPIs be specific, and what does a short-term focus risk?
Evaluation
What does variance analysis involve in strategic performance evaluation?
Key term
Why does the value of strategic performance evaluation depend on selecting appropriate metrics?
Numbers
What perspective does planning encourage, and what happens without it?
Evaluation
How does strategic planning give direction and prepare for external change?
Evaluation
What does contingency planning cost, and what does it achieve?
Evaluation
What is contingency planning, and how does a risk differ from a crisis?
Key term
How can good public relations help a business manage a crisis?
Process
How does strategic planning improve resource allocation?
Process
How does strategic planning prepare organisations for external change?
Take Problems with Strategy and Why Strategies Fail further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Strategic drift vs Strategic fit
Strategic drift: a strategy gradually losing alignment with its environment. Strategic fit: a strategy aligning capabilities with external conditions.
Intended strategy vs Emergent strategy
Intended strategy: planned course formally chosen by managers. Emergent strategy: pattern developing through unplanned decisions and learning.
Contingency planning vs Crisis management
Contingency planning: preparation for plausible adverse events. Crisis management: immediate response after disruption occurs.
Questions from this topic
Each one with the model answer underneath.
- 1
Why does uncertainty pose a major challenge for strategic decision making?
Model answer
Strategic decisions involve high levels of uncertainty about future outcomes, making accurate prediction of results extremely difficult.
- 2
What makes strategic decisions difficult to reverse once made?
Model answer
They involve significant resource commitment that is often irreversible or very costly to undo.
- 3
Why are strategic decisions described as complex?
Model answer
They involve multiple interrelated variables and stakeholders that must all be considered simultaneously.
- 4
How do information gaps affect strategic decision making?
Model answer
Incomplete data and information gaps hinder effective decision making by preventing managers from fully understanding the situation or evaluating all options.
- 5
What is overconfidence bias in strategic decision making?
Model answer
A cognitive bias where decision makers overestimate their ability to predict outcomes or the accuracy of their judgements, distorting strategic choices.
- 6
How does anchoring bias distort strategic judgement?
Model answer
Decision makers place excessive weight on the first piece of information encountered, which then unduly influences subsequent analysis and choices.
What is inside Levo
Six ways to work the same material.
Problems with Strategy and Why Strategies Fail revision questions
- What does Problems with Strategy and Why Strategies Fail cover in AQA A-Level Business?
- 8 subtopics: uncertainty and cognitive bias in strategic decisions, resource and organisational barriers to implementation, planned and emergent strategy, reasons for strategic drift, financial and non-financial measures of strategic performance, the balanced scorecard, kpis and the limits of evaluation, the value of strategic planning and contingency planning and crisis management. Each one has its own page with questions and model answers.
- How is Problems with Strategy and Why Strategies Fail organised?
- By the AQA 7132 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Problems with Strategy and Why Strategies Fail, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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