Case Studies 2.1.1-2.1.5Use this to self assess and prepare actual businesses for

questions which ask:“For a business you have studied”

2.1.1 Business Ownership

Sole Trader(1 owner)

Partnership(2-20 partners –

owners)

Private Limited Company (Ltd)Owned by shareholders – friends and family. Usually has Ltd after the name but not always)

Public Limited Company (PLC)

Owned by shareholders – who bought shares on the stock exchange. Usually has PLC after the name but not always)

FranchisesCharity/ Not- For-Profit Organisations

Additional Notes2.1.1 Business type – forms of ownershipThere are several different forms of business ownershipYou will need to be able to:• Identify different forms of ownership

– sole trader, partnership, private limited company, public limited company, franchise, voluntary/charitable/not for profit

• Evaluate the advantages and disadvantages of each form of ownership

My Revision Notes

2.1.2 Changes to the External Environment

Technological Advancement

New Regulation

New CompetitorChange in Economic Conditions The year is 2007. Nokia

dominate the mobile phone market. Apple release

their new Smart Phone: the i-Phone.

The rest is history.

The year is 1997 and Netflix is established as an online streaming service. By 2013 it has 33million subscribers.Blockbuster did not offer this technological service. Look what happened

The year is 2007 and the UK Government has decided to ban

smoking inside public areas including Pubs.

The number of people attending pubs drops sharply

It is 2007 and the UK Economy is suffering along with the rest of the World.

Additional Notes2.1.2 Business activity – why and how businesses start, succeed and/or FailBusinesses usually carry out a range of activities and are usually involved with producing goods, providing services or both.You will need to be able to:• Identify possible reasons why a business starts

– e.g. To meet the needs of a particular target market, in response to an innovative idea

• Identify types of activity a business may become involved in – e.g. manufacturing of goods (consumer and capital goods), retailing, provision of services (leisure, financial, communication)

• Explain possible changes in the external environment that can impact on these activities – e.g. economic factors such as the level of consumer spending on different goods and services, new competitors entering the market

• Evaluate the consequences of these changes in the external environment to business activity – e.g. success, failure.

My Revision NotesExamples of businesses who have had to adapt to changes in external environment

2.1.3 Consequences of Functional Areas Not Operating Efficiently

Finance FunctionMarketing Function

Administration Function

Operations - Production Function

Human Resources Function

IT Function

Key words to use:

Additional Notes2.1.3 Business organisation – how businesses organise themselves Businesses will group key tasks together into departments/functional areas within their overall business structure. This enables a business to operate more efficiently and allows a business to develop discrete job roles.You will need to be able to:• Understand the following functional areas:• Finance• Human resources• Marketing• Operations• Administration/ICT• Understand key operational tasks associated with each

functional area• Evaluate the consequences for a business if the

functional areas do not operate efficiently.You may be asked to give an example of a business you have studied.

My Revision NotesExamples of what each Functional Area does in Cadbury’s (or a different business). Be specific to that business:

2.1.4 Mission Statement, Aims and Objectives Stretford High School

Mission Statement: “Learning Today, Leading Tomorrow”Core Values: Creativity, Independence, Drive, Respect

Aim: To provide an outstanding education service to all student Objective 2: To provide students

with extra curricular opportunities to develop knowledge of subjects outside of the classroom

Objective 3: Have weekly training sessions for teachers so that they can deliver Good and Outstanding lessons.

Objectives set out how to achieve the Aim.Sometimes they are S.M.A.R.T

Objective 1: To achieve 65% 5 A*- C grades including English and Maths in 2014

Tesco: Mission Statement, Aims and ObjectivesMission Statement: “create value for customers to earn their lifetime loyalty”Core Values:

Aim: Market ShareGrowth

Objective 1: To increase the number of customers from 35% of market share to 36% of market share by 2015

Objective 2: To open 5 news stores in Northern Ireland by the end of 2014

Objectives set out how to achieve the Aim.Sometimes they are S.M.A.R.T

Additional Notes2.1.4 Framework for activity – aims, objectives and mission statementsFor businesses to be successful, they must achieve the objectives (targets) and overall aims (goals) they set themselves. These can be summed up in the form of a mission statement.You will need to be able to:• Identify the main aims of businesses – e.g. making a

profit, survival, growth, expansion, being competitive, being environmentally friendly

• Explain the importance of business aims – e.g. gives businesses a framework to operate within, focus for business activity

• Identify business objectives – e.g. selling more of a product than a competitor, providing more services than in the previous year

• Objectives = SMART Aims• Explain the importance of business objectives – e.g.

stepping stones in achieving an overall goal, setting of realistic targets for various departments

• Explain the importance of a mission statement – e.g. gives businesses something to aspire to, sets out a vision for a business.

You may be asked to give an example of a business they have studied.

My Revision NotesExamples of a specific Businesses’ Mission Statement, Aims and Objectives – you will need to remember these in case you are asked.Business:Aim:

Objectives

Mission Statement

2.1.5 Stakeholder Conflict

Local Community It ruin the atmosphere of the townIt will cause pollution and trafficLocal businesses will lose customers BUTIt will create new jobsThe new store will provide more choice for local residents

In 2012 Tesco wanted to build a new supermarket on Chester Road, Stretford

Shareholders It will generate more sales and generate more profit – increase in dividend (share of profits)

OwnersIncrease in market shareIncrease in salesIncrease in profitALL help achieve business aims

GovernmentIncrease in employment during the build and once openedTax generated from new jobs Less benefits paid for those no longer unemployed

EmployeesJob opportunities for existing workers for promotions

Additional Notes2.1.5 Stakeholders – their differing interestsAll businesses have stakeholders who take an interest in the decision-making process.You will need to be able to:• identify different stakeholder groups in businesses –

e.g. customers, suppliers, employees, employers, shareholders, local community

• explain different interests of stakeholder groups – e.g. suppliers: they sell goods/services to the business; financiers: they lend money and they want interest and repayment assess possible conflicts between different types of stakeholder groups – e.g. employees wanting a pay rise higher than employer is offering

• evaluate consequences to businesses of not listening to stakeholder groups - e.g. impact on reputation, drop in repeat business.

You may be asked to give an example of a business you have studied which has a number of stakeholder groups. You may need to:• explain the interest of different stakeholder groups• assess a conflict that has occurred between two

different stakeholder groups• evaluate the consequences to their chosen business

of not listening to these stakeholder groups.

My Revision Notes