AQA A Level Business Paper 2
Questions
Extrapolation - ANS✔✔the action of estimating or concluding something by
assuming that existing trends will continue.
Market share calculation - ANS✔✔Sales of business / total sales in market
x 100
Market segmentation - ANS✔✔splitting consumers into groups depending
on certain characteristics (age, gender, lifestyle)
Benefits of market segmentation - ANS✔✔- better understanding of
customer needs
- better targeting of promotional messages - targeted promotion may be a
way to save money as well as being more effective
Elastic goods of demand - ANS✔✔- 1 or more value
- demand is more responsive to change in price
- luxury products such as cars, jewellery
Inelastic goods of demand - ANS✔✔- 0-1 value
- demand is less responsive to change in price
- necessities such as milk, fuel, rent
Inelastic demand effect on businesses - ANS✔✔allows business to
increase prices of goods
Elastic demand effect on businesses - ANS✔✔allows business to decrease
price of goods to increase demand
Factors affecting when it's a good time to launch a new brand - ANS✔✔-
state of market (decline or increasing)
- size and value of market
- divides in the market and growing niches
- looking at different demographics
- ethical factors
- competition
- finance - can business penetrate market (may use price skimming or
penetration pricing)
- distribution channels
gross profit margin formula - ANS✔✔(gross profit/sales revenue) x 100
payables days formula - ANS✔✔(Payables / cost of sales) x 365
receivables days formula - ANS✔✔(Receivables / revenue) x 365
, how to manage payables and receivables to manage cash flow - ANS✔✔-
offering trade credit when selling to retailers will help gain cash inflows
- actively chase payments and limit time periods offered to speed up
inflows
- build long-term relationships with suppliers to secure preferential terms;
discounts or longer periods of credit to delay payments - delays outflows
how a small, family ownership structure helps a business - ANS✔✔- family
ownership sees a controlling interest within group so family will collectively
have final say
- small group of people should be able to communicate effectively ensuring
decisions are clear and decisive. no other shareholders to consider or
discuss with.
- if each owner is a manager allows better understanding of day to day
issues, customer needs.
- strategic decisions can be made quickly as few people to communicate
with than there would be in a plc.
should businesses always stop production of products classified as 'dogs'
in the Boston Matrix? YES - ANS✔✔BM is a tool to analyse business'
product portfolio - dog has low market share and a low market growth
Reasons for ceasing production:
- may be at end of product life cycle - further extension strategies may be
pointless and costly; CDs
- new entrants to market may have eroded product's position - no longer
possible to compete; Disney +
- could allow business to focus on other products
- money saved could fund research and development into new products
should businesses always stop production of products classified as 'dogs'
in the Boston Matrix? NO - ANS✔✔Keeping a 'dog' may be valid:
- if product is a distinct niche and has a unique selling point (intangible
benefits), e.g. strong brand image so makes customer feel good - coca-
cola decline as more people drink diet/zero
- if product has no need for further investment, no need to remove it
- any prospect of market picking up in future (old fashion trends)
- if 'dog' has a place in the business - wider product portfolio
Overall it will depend on:
- current market situation (decline?)
- how product portfolio fits together
employee retention rate formula - ANS✔✔(employees staying all
year/number of employees at start of the year) x 100
Questions
Extrapolation - ANS✔✔the action of estimating or concluding something by
assuming that existing trends will continue.
Market share calculation - ANS✔✔Sales of business / total sales in market
x 100
Market segmentation - ANS✔✔splitting consumers into groups depending
on certain characteristics (age, gender, lifestyle)
Benefits of market segmentation - ANS✔✔- better understanding of
customer needs
- better targeting of promotional messages - targeted promotion may be a
way to save money as well as being more effective
Elastic goods of demand - ANS✔✔- 1 or more value
- demand is more responsive to change in price
- luxury products such as cars, jewellery
Inelastic goods of demand - ANS✔✔- 0-1 value
- demand is less responsive to change in price
- necessities such as milk, fuel, rent
Inelastic demand effect on businesses - ANS✔✔allows business to
increase prices of goods
Elastic demand effect on businesses - ANS✔✔allows business to decrease
price of goods to increase demand
Factors affecting when it's a good time to launch a new brand - ANS✔✔-
state of market (decline or increasing)
- size and value of market
- divides in the market and growing niches
- looking at different demographics
- ethical factors
- competition
- finance - can business penetrate market (may use price skimming or
penetration pricing)
- distribution channels
gross profit margin formula - ANS✔✔(gross profit/sales revenue) x 100
payables days formula - ANS✔✔(Payables / cost of sales) x 365
receivables days formula - ANS✔✔(Receivables / revenue) x 365
, how to manage payables and receivables to manage cash flow - ANS✔✔-
offering trade credit when selling to retailers will help gain cash inflows
- actively chase payments and limit time periods offered to speed up
inflows
- build long-term relationships with suppliers to secure preferential terms;
discounts or longer periods of credit to delay payments - delays outflows
how a small, family ownership structure helps a business - ANS✔✔- family
ownership sees a controlling interest within group so family will collectively
have final say
- small group of people should be able to communicate effectively ensuring
decisions are clear and decisive. no other shareholders to consider or
discuss with.
- if each owner is a manager allows better understanding of day to day
issues, customer needs.
- strategic decisions can be made quickly as few people to communicate
with than there would be in a plc.
should businesses always stop production of products classified as 'dogs'
in the Boston Matrix? YES - ANS✔✔BM is a tool to analyse business'
product portfolio - dog has low market share and a low market growth
Reasons for ceasing production:
- may be at end of product life cycle - further extension strategies may be
pointless and costly; CDs
- new entrants to market may have eroded product's position - no longer
possible to compete; Disney +
- could allow business to focus on other products
- money saved could fund research and development into new products
should businesses always stop production of products classified as 'dogs'
in the Boston Matrix? NO - ANS✔✔Keeping a 'dog' may be valid:
- if product is a distinct niche and has a unique selling point (intangible
benefits), e.g. strong brand image so makes customer feel good - coca-
cola decline as more people drink diet/zero
- if product has no need for further investment, no need to remove it
- any prospect of market picking up in future (old fashion trends)
- if 'dog' has a place in the business - wider product portfolio
Overall it will depend on:
- current market situation (decline?)
- how product portfolio fits together
employee retention rate formula - ANS✔✔(employees staying all
year/number of employees at start of the year) x 100
