Evaluation
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
Strategic Methods: How to Pursue Strategies
- 13 subtopics
- 31 things to know
- Papers 1, 2 and 3
What Strategic Methods: How to Pursue Strategies covers
Strategic methods is examined on Papers 1, 2 and 3. It covers the four routes a business can take to pursue a strategy: changing its scale, innovating, going international, and adopting digital technology.
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 13 subtopics
Each one has its own page.
- Organic growth, external growth and retrenchmentThe difference between growing from within and by acquisition, why businesses grow, and why they retrench.Open →
- Economies and diseconomies of scale, synergy and overtradingTechnical, purchasing and managerial economies, economies of scope, and the risks of growing too fast.Open →
- Methods of external growthMergers, takeovers, joint ventures, franchising, and horizontal, vertical and conglomerate integration.Open →
- The advantages and disadvantages of organic and external growthControl and culture against speed and scale, and the integration problems that follow a deal.Open →
- Product and process innovation and its driversThe difference between the two, and the competitive, technological and cost pressures behind them.Open →
- Kaizen, research and development, and intellectual propertyKaizen, R&D, intrapreneurship and benchmarking, and protecting an idea by patent or copyright.Open →
- The causes of globalisation and its opportunitiesCommunication, trade liberalisation, transport and financial deregulation, and the markets they open.Open →
- Methods of entering international marketsExporting, licensing, alliances and direct investment, and the risk and control of each.Open →
- Choosing a country to trade with or invest inMarket size and growth, ease of doing business, political stability, infrastructure and exchange rates.Open →
- Off-shoring, re-shoring and multinationalsWhy production moves abroad, why it comes back, and what defines a multinational.Open →
- Global, multi-domestic and transnational strategiesThe tension between cost reduction and local responsiveness, and the strategy each pressure favours.Open →
- Digital technology and the pressure to adopt itAutomation, big data, data mining and e-commerce, and the pressures pushing businesses towards them.Open →
- The value and the limits of digital technologyWhat digital technology delivers, against cost, skills, security, obsolescence and ethics.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Evaluation
What triggers retrenchment, and what advantage can growth bring?
Numbers
Why might a business retrench?
Evaluation
What causes diseconomies of scale, and what is overtrading?
Numbers
What are horizontal, vertical and backward vertical integration?
Numbers
What are forward vertical and conglomerate integration, and how do mergers differ from takeovers?
Evaluation
What are the advantages and the drawback of organic growth?
Numbers
What are the advantages of external growth?
Evaluation
What are the disadvantages of external growth?
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Why is regulatory scrutiny a disadvantage of external growth?
Numbers
What are product and process innovation, and what pressure does technology create?
Numbers
How do cost pressure and globalisation drive innovation, and what does it do to margins?
Evaluation
How does an innovation strategy affect operations, finance and marketing?
Evaluation
Distinguish between basic research, applied research, and development within R&D.
Key term
What is intellectual property?
Key term
What impact does an innovation strategy have on the human resources function?
Evaluation
What are exporting, alliances and direct investment as ways into a foreign market?
Evaluation
How do political stability, the legal framework and competition affect a market's attractiveness?
Numbers
How do culture, exchange rates and labour costs affect where a business operates?
Numbers
What is a multinational corporation, and what pushes it towards local responsiveness?
Numbers
How do location, centralised production and standardisation reduce costs?
Process
Why do businesses produce or source abroad?
Process
Define off-shoring.
Process
How do long supply chains contribute to re-shoring decisions?
Process
How do government regulations affect a business trading internationally?
Key term
What is a transnational strategy and when is it appropriate?
Evaluation
What pressures push a business towards digital technology?
Evaluation
How do digital technology and e-commerce add value to a business?
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What limits the adoption of digital technology?
Numbers
What ethical concerns arise from automation as a form of digital technology?
Process
What has driven globalisation, and what does it offer a business?
Take Strategic Methods: How to Pursue Strategies further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Organic growth vs External growth
Organic growth: expansion through internal activities and resources. External growth: expansion by combining with another organisation.
Off-shoring vs Re-shoring
Off-shoring: moving activities abroad to reduce cost or reach markets. Re-shoring: bringing activities back to the home country.
Horizontal integration vs Vertical integration
Horizontal integration: joining with a business at the same stage of the same industry. Vertical integration: joining with a business at a different stage of the supply chain.
Questions from this topic
Each one with the model answer underneath.
- 1
What is organic growth?
Model answer
Internal expansion achieved through a business increasing its own output, sales, or capacity using its existing resources and capabilities.
- 2
What is external growth?
Model answer
Expansion achieved by joining with or acquiring other businesses rather than expanding internally.
- 3
How does the speed of organic growth compare to external growth?
Model answer
Organic growth is slower, whereas external growth is faster.
- 4
How does the risk level of organic growth compare to external growth?
Model answer
Organic growth is lower risk, whereas external growth is higher risk.
- 5
How is organic growth typically funded compared to external growth?
Model answer
Organic growth is funded internally, whereas external growth often requires external finance.
- 6
What happens to organisational culture under organic versus external growth?
Model answer
Organic growth maintains existing culture, whereas external growth involves integrating different organisations with potentially different cultures.
What is inside Levo
Six ways to work the same material.
Strategic Methods: How to Pursue Strategies revision questions
- What does Strategic Methods: How to Pursue Strategies cover in AQA A-Level Business?
- 13 subtopics: organic growth, external growth and retrenchment, economies and diseconomies of scale, synergy and overtrading, methods of external growth, the advantages and disadvantages of organic and external growth, product and process innovation and its drivers, kaizen, research and development, and intellectual property, the causes of globalisation and its opportunities, methods of entering international markets, choosing a country to trade with or invest in, off-shoring, re-shoring and multinationals, global, multi-domestic and transnational strategies, digital technology and the pressure to adopt it and the value and the limits of digital technology. Each one has its own page with questions and model answers.
- How is Strategic Methods: How to Pursue Strategies organised?
- By the AQA 7132 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Strategic Methods: How to Pursue Strategies, 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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