A-level Business₇₁₃₂

Influences on the mission of a business

Internal and external influences on corporate objectives and decisions

Influences on corporate objectives should include the pressures for short termism, business ownership, the external and internal environment.

The links between mission, corporate objectives and strategy

The distinction between strategy and tactics

The impact of strategic decision making on functional decision making

The value of SWOT analysis

How to assess the financial performance of a business using balance sheets, income statements and financial ratios

Financial ratio analysis to include:

• profitability (return on capital employed)  
• liquidity (current ratio)
• gearing  
• efficiency ratios: payables days, receivables days, inventory turnover.

The value of financial ratios when assessing performance

Data may be analysed over time or in comparison with other businesses.

How to analyse data other than financial statements to assess the strengths and weaknesses of a business

Data other than financial statements should include operations, human resource and marketing data.

Data may be analysed over time or in comparison with other businesses.

The importance of core competences

Assessing short- and long-term performance

The value of different measures of assessing business performance

Methods of assessing overall business performance to include Elkington’s Triple Bottom Line (Profit, People, Planet).

The impact of changes in the political and legal environment on strategic and functional decision making

The political and legal environment should include a broad understanding of the scope and effects of laws related to competition, the labour market and environmental legislation.

The impact of government policy related to enterprise, the role of regulators, infrastructure, the environment and international trade.

The impact of changes in the UK and the global economic environment on strategic and functional decision making

Economic factors to include:

• GDP
• taxation
• exchange rates
• inflation
• fiscal and monetary policy
• more open trade v protectionism.

Students should be able to understand economic data, interpret changes in economic data for the UK and globally, and consider the implications of such changes for business.

The impact of the social and technological environment on strategic and functional decision making

Social changes to include demographic changes and population movements such as:

• migration
• changes in consumer lifestyle and buying behaviour
• the growth of online businesses.

The social environment to include Corporate Social Responsibility (CSR) and:

• the reasons for and against (CSR)
• the difference between the stakeholder v shareholder concept
• Carroll’s Corporate Social Responsibility pyramid.

Technological change should include the impact of technological change on functional areas and strategy.

The pressures for socially responsible behaviour

Porter’s five forces, how and why these might change, and the implications of these forces for strategic and functional decision making and profits

An understanding of the five forces to include:

• entry threat (barriers to entry)
• buyer power
• supplier power
• rivalry
• substitute threat.

Students should consider how the five forces shape competitive strategy.

Financial methods of assessing an investment

Investment appraisal should include the calculation and interpretation of payback, average rate of return and net present value.

Factors influencing investment decisions