NOTES FOR AS-LEVEL BUSINESS
(2023-2025)
Unit 1:
Definitions:
Chapter 1:
Business: Identifying wants and needs of customers and using the factors of production to
produce goods and services
Adding value: Increasing the difference between materials and selling price of finished goods
Added value: Difference between cost of materials and selling price of finished goods
Opportunity cost: Next most desired option that is given up
Entrepreneur: Individual who has the idea for a new business, and takes up both rewards and
risks when starting up
Intrapreneur: Business employee who takes direct responsibility for turning one idea into a
profitable new product (or business venture)
Business plan: Written document describing the business, its objectives, its strategies, the
market it is in and its financial forecasts
Chapter 2:
Public sector: Businesses accountable to and controlled by the state/government
Private sector: Businesses owned and controlled by individuals (or groups of individuals)
Mixed economy: Economic resources controlled and owned by both public and private sectors
Free-market economy: Economic resources largely owned by private sectors with little
government intervention
Command economy: Economic resources owned, planned, and controlled by the government
Public corporations (Nationalised industry): Business enterprises owned and controlled by the
government
Sole traders: Business with one individual only providing permanent finance, has full control of
the business and keeps all profits
Partnerships: Business with two or more people doing it together, carrying shared capital
investment and responsibilities
Cooperatives: Jointly owned business owned by members for their mutual benefit, to produce or
distribute goods or services
Franchises: Legal right to use the name, logo and trading systems of an existing successful
business
,Joint ventures: Two or more businesses agree to work closely together on a particular project
and create a separate business division to do so
Social enterprises: Business with mainly social objectives that re-invests most of its profits into
benefiting society
Unlimited liability: Owners have full legal responsibility for the business debts
Limited liability: Only liability (potential loss) a shareholder has is the amount of money invested
in the company
Chapter 3:
Strategic alliances: Agreement between two organisations to commit resources towards
achieving a specific objective while remaining independent
Internal (Organic) growth: Business expansion through opening shops, branches or factories
External growth: Business expansion through mergers or takeovers (integrating with another
business)
Mergers (Friendly merger): Owners and managers of two businesses agree to bring them
together in a new combined business
Takeovers (Acquistion): Company buys at least 51% or more of another company and becomes
its controlling owner
Synergy: Assumes that the new business is better than original separate businesses
Chapter 4:
Corporate social responsibility: Businesses considering the interests of society and the impact
of their decisions into them
Pressure groups: Created by people with a common interest or aim and puts pressure on
businesses and governments to change policies so that an objective is reached
Triple bottom line (Three objectives of social enterprises): Economic, social and environmental
SMART: Aims that are Specific, Measurable, Attainable, Realistic and Time-limited
Business objectives: Stated measurable target to achieve
Business aims: Long-term goal to achieve
Mission statement: Brief statement of the business’s core aims (a way to motivate employees
and to stimulate interest from outside groups)
Business strategies: Long-term plan of action designed to achieve a particular objective
Tactics: Short-term action as part of an overall strategy
Targets: Short-term goal that must be reached before an overall objective can be achieved
Budget: Detailed financial plan for the future
Ethical code: Document detailing a company’s rules and guidelines on staff behaviour that must
be followed by all employees
,Chapter 5:
Stakeholders: Individual or groups who can be affected by, and have an interest in, any action
taken by an organisation
External stakeholders: Individuals or groups separate from the business but are affected or
interested in its operations
Internal stakeholders: Individuals or groups who work within the business, or own it, and are
affected by the business operations
Stakeholder concept: View that businesses and their managers have responsibilities to a wide
range of groups, not just shareholders
Notes:
Chapter 1:
Factors of production: Land (resources), Labour (workers), Capital (investments), and
Enterprise (risks)
2 ways to add value: Increase selling price & Reducing cost of materials OR Adding valuable
features
Changes in dynamic business environment: New competitors, Legal changes, Economic
changes, and Technological changes
Why do businesses succeed? Good understanding of customer needs, Efficient management of
operations, Flexible decision making, Appropriate and sufficient finance sources
Why do businesses fail? Poor record-keeping, Lack of cash, Poor management skills
Location of businesses: Local (sells in small areas or towns), National (sells in a country),
International (sells in more than one country), Multinational (operates in more than one
country)
Role of entrepreneurs in startups: Have an idea, Create a business plan, Invest some of their
own savings and capital, Accept the responsibility of managing the business, Accepting risks of
failure
Qualities of both entrepreneurs and intrapreneurs: Innovation, Commitment and self-motivation,
Multi-skilled, Leadership skills, Self-confidence and overcoming failure, Risk-taking
Barriers to entrepreneurship: Lack of business opportunity, Obtaining sufficient capital (finance),
Cost of good locations, Competition, Lack of customer base
, Enterprise roles in a country’s economic development: Creating jobs, Economic growth,
Business survival and growth, Innovation and technological change, Exports, Personal
development, Increased social cohesion
Benefits of intrapreneurship to existing businesses: Injects creativity and innovation, Developing
new ways of doing business, Driving innovation and change, Creating a competitive advantage,
Encouraging original thinkers and innovators to stay
Benefits/Purpose of business plans: Obtain finance for a startup, Think seriously about the
proposal with its strengths and weaknesses, Gives owners and managers a clear plan of action
for actions and decisions in the first time periods
Limitations of business plans: False sense of certainty - Predictions only, Must be detailed and
supported by market research, Could lead entreprenuers to be inflexible in decision making
Chapter 2:
Economic sectors: Primary (Extracting natural resources), Secondary
(Manufacturing/Processing products using natural resources), Tertiary (Services to consumers
and businesses), Quaternary (Providing information services - ICT, R&D, Computing & Web
Design, Managament Consultancy)
Benefits of Industrialisation: GDP Increases -> Higher standard of living, Increased output goods
-> Higher exports, Expanding manufacturing business -> More jobs created, Expanding and
profitable firms -> More tax paid to government, Value added to country’s output of raw
materials
Drawbacks of Industrialisation: More people moving from countryside to cities -> Housing &
Social problems, Import of raw materials and components -> Higher import costs, Manufacturing
industry growth mostly due to multinational companies’ expansions -> Negative impact on
national economy
Benefits of Deindustrialisation: Job opportunities in tertiary and quaternary sectors
Drawbacks of Deindustrialisation: Job losses in primary industries, Movement of people to
towns/cities, Increased need for retraining programmes for workers for employment in service
industries
Benefits of Public Corporations: Have social objectives, Finance mainly raised by government,
Loss-making services kept if social benefits are great enough
Drawbacks of Public Corporations: Possible inefficiency due to lack of profit targets,
Government subsidies could produce inefficiencies, Government interference can happen in
business decisions for political reasons
Advantages of Sole Trader: Easy to set up, Complete control, Keeps all profits, Can choose
times and working patterns, Can establish close relationships with staff, Can be based on
interests or skills of the owner
Disadvantages of Sole Trader: Unlimited liability, Intense competition from bigger firms,
Responsible for all aspects of management - unable to specialise in interesting areas of
(2023-2025)
Unit 1:
Definitions:
Chapter 1:
Business: Identifying wants and needs of customers and using the factors of production to
produce goods and services
Adding value: Increasing the difference between materials and selling price of finished goods
Added value: Difference between cost of materials and selling price of finished goods
Opportunity cost: Next most desired option that is given up
Entrepreneur: Individual who has the idea for a new business, and takes up both rewards and
risks when starting up
Intrapreneur: Business employee who takes direct responsibility for turning one idea into a
profitable new product (or business venture)
Business plan: Written document describing the business, its objectives, its strategies, the
market it is in and its financial forecasts
Chapter 2:
Public sector: Businesses accountable to and controlled by the state/government
Private sector: Businesses owned and controlled by individuals (or groups of individuals)
Mixed economy: Economic resources controlled and owned by both public and private sectors
Free-market economy: Economic resources largely owned by private sectors with little
government intervention
Command economy: Economic resources owned, planned, and controlled by the government
Public corporations (Nationalised industry): Business enterprises owned and controlled by the
government
Sole traders: Business with one individual only providing permanent finance, has full control of
the business and keeps all profits
Partnerships: Business with two or more people doing it together, carrying shared capital
investment and responsibilities
Cooperatives: Jointly owned business owned by members for their mutual benefit, to produce or
distribute goods or services
Franchises: Legal right to use the name, logo and trading systems of an existing successful
business
,Joint ventures: Two or more businesses agree to work closely together on a particular project
and create a separate business division to do so
Social enterprises: Business with mainly social objectives that re-invests most of its profits into
benefiting society
Unlimited liability: Owners have full legal responsibility for the business debts
Limited liability: Only liability (potential loss) a shareholder has is the amount of money invested
in the company
Chapter 3:
Strategic alliances: Agreement between two organisations to commit resources towards
achieving a specific objective while remaining independent
Internal (Organic) growth: Business expansion through opening shops, branches or factories
External growth: Business expansion through mergers or takeovers (integrating with another
business)
Mergers (Friendly merger): Owners and managers of two businesses agree to bring them
together in a new combined business
Takeovers (Acquistion): Company buys at least 51% or more of another company and becomes
its controlling owner
Synergy: Assumes that the new business is better than original separate businesses
Chapter 4:
Corporate social responsibility: Businesses considering the interests of society and the impact
of their decisions into them
Pressure groups: Created by people with a common interest or aim and puts pressure on
businesses and governments to change policies so that an objective is reached
Triple bottom line (Three objectives of social enterprises): Economic, social and environmental
SMART: Aims that are Specific, Measurable, Attainable, Realistic and Time-limited
Business objectives: Stated measurable target to achieve
Business aims: Long-term goal to achieve
Mission statement: Brief statement of the business’s core aims (a way to motivate employees
and to stimulate interest from outside groups)
Business strategies: Long-term plan of action designed to achieve a particular objective
Tactics: Short-term action as part of an overall strategy
Targets: Short-term goal that must be reached before an overall objective can be achieved
Budget: Detailed financial plan for the future
Ethical code: Document detailing a company’s rules and guidelines on staff behaviour that must
be followed by all employees
,Chapter 5:
Stakeholders: Individual or groups who can be affected by, and have an interest in, any action
taken by an organisation
External stakeholders: Individuals or groups separate from the business but are affected or
interested in its operations
Internal stakeholders: Individuals or groups who work within the business, or own it, and are
affected by the business operations
Stakeholder concept: View that businesses and their managers have responsibilities to a wide
range of groups, not just shareholders
Notes:
Chapter 1:
Factors of production: Land (resources), Labour (workers), Capital (investments), and
Enterprise (risks)
2 ways to add value: Increase selling price & Reducing cost of materials OR Adding valuable
features
Changes in dynamic business environment: New competitors, Legal changes, Economic
changes, and Technological changes
Why do businesses succeed? Good understanding of customer needs, Efficient management of
operations, Flexible decision making, Appropriate and sufficient finance sources
Why do businesses fail? Poor record-keeping, Lack of cash, Poor management skills
Location of businesses: Local (sells in small areas or towns), National (sells in a country),
International (sells in more than one country), Multinational (operates in more than one
country)
Role of entrepreneurs in startups: Have an idea, Create a business plan, Invest some of their
own savings and capital, Accept the responsibility of managing the business, Accepting risks of
failure
Qualities of both entrepreneurs and intrapreneurs: Innovation, Commitment and self-motivation,
Multi-skilled, Leadership skills, Self-confidence and overcoming failure, Risk-taking
Barriers to entrepreneurship: Lack of business opportunity, Obtaining sufficient capital (finance),
Cost of good locations, Competition, Lack of customer base
, Enterprise roles in a country’s economic development: Creating jobs, Economic growth,
Business survival and growth, Innovation and technological change, Exports, Personal
development, Increased social cohesion
Benefits of intrapreneurship to existing businesses: Injects creativity and innovation, Developing
new ways of doing business, Driving innovation and change, Creating a competitive advantage,
Encouraging original thinkers and innovators to stay
Benefits/Purpose of business plans: Obtain finance for a startup, Think seriously about the
proposal with its strengths and weaknesses, Gives owners and managers a clear plan of action
for actions and decisions in the first time periods
Limitations of business plans: False sense of certainty - Predictions only, Must be detailed and
supported by market research, Could lead entreprenuers to be inflexible in decision making
Chapter 2:
Economic sectors: Primary (Extracting natural resources), Secondary
(Manufacturing/Processing products using natural resources), Tertiary (Services to consumers
and businesses), Quaternary (Providing information services - ICT, R&D, Computing & Web
Design, Managament Consultancy)
Benefits of Industrialisation: GDP Increases -> Higher standard of living, Increased output goods
-> Higher exports, Expanding manufacturing business -> More jobs created, Expanding and
profitable firms -> More tax paid to government, Value added to country’s output of raw
materials
Drawbacks of Industrialisation: More people moving from countryside to cities -> Housing &
Social problems, Import of raw materials and components -> Higher import costs, Manufacturing
industry growth mostly due to multinational companies’ expansions -> Negative impact on
national economy
Benefits of Deindustrialisation: Job opportunities in tertiary and quaternary sectors
Drawbacks of Deindustrialisation: Job losses in primary industries, Movement of people to
towns/cities, Increased need for retraining programmes for workers for employment in service
industries
Benefits of Public Corporations: Have social objectives, Finance mainly raised by government,
Loss-making services kept if social benefits are great enough
Drawbacks of Public Corporations: Possible inefficiency due to lack of profit targets,
Government subsidies could produce inefficiencies, Government interference can happen in
business decisions for political reasons
Advantages of Sole Trader: Easy to set up, Complete control, Keeps all profits, Can choose
times and working patterns, Can establish close relationships with staff, Can be based on
interests or skills of the owner
Disadvantages of Sole Trader: Unlimited liability, Intense competition from bigger firms,
Responsible for all aspects of management - unable to specialise in interesting areas of
