http://www.tutor2u.net/business/gcse/external_environment_introduction.htm
PEST
Sunday 16 December 2012
Sampling Methods
There is a chance you might get asked about different sampling methods as highlighted by the exam board below:
"Define primary (quantitative and qualitative) and secondary research and why they are used, eg to quantify demand and gain insight into consumer behaviour. In addition, students can use a business textbook to define methods of research.
"Define primary (quantitative and qualitative) and secondary research and why they are used, eg to quantify demand and gain insight into consumer behaviour. In addition, students can use a business textbook to define methods of research.
Identify problems that arise with
small sample sizes; and the sampling method used, eg convenience sampling and
potential bias."
Here is some information on different sampling methods that could be used by start ups and what sampling is
Plus a case study
There is also a revision quiz here you can use to test yourselves
Saturday 15 December 2012
Y11 Task
You have been pl;aced into a group and assigned a topic to research. You will create
You will have access to the internet and the library and should use the below link to the specification. I expect you to have used this to inform students about what they need to learn about.
The winning group gets...
- An introduction to this topic with a PowerPoint
- A detailed hand-out which covers what the topic is about and then details what they need to learn about that topic.
You will have access to the internet and the library and should use the below link to the specification. I expect you to have used this to inform students about what they need to learn about.
You will assign your own manager and all students are expected to contribute. Your presentations will occur on Tuesday and you will have a 10 minute slot to fill.
All PowerPoints should be ready on a usb and hand-outs printed in your own time before the lesson. Groups failing to be prepared will have extra tasks given for over the Christmas break.
The winning group gets...
Tuesday 11 December 2012
Why EdExcel are wrong to call it Market Mapping
http://www.tutor2u.net/blog/index.php/business-studies/comments/market-mapping-or-not-market-mapping
Clearly you should use the EdExcel version for your exam but if you go on to study business at university or go into industry remember everything written in a textbook is not always correct.
Just ask Medis about Venture Capitalists and added value...
Clearly you should use the EdExcel version for your exam but if you go on to study business at university or go into industry remember everything written in a textbook is not always correct.
Just ask Medis about Venture Capitalists and added value...
So you think you know market mapping?
Then try this 8 marker for size...
Today's task will require you to create a plan to answer this question. We will discuss your ideas for how best to get maximum marks. Then you will compete for the best answer!
Your plans went well today and below is the mark scheme available for future reference. Remember market mapping is all about spotting gaps in markets and testing consumer perceptions. You use it to analyse your position compared to competitors. Just rmember the drawbacks and how it may be unsuitable to entrepreneurs who do not have the resources & experience to do it properly or pay someone else to do it.
“Market mapping consists of identifying key variables about a product, plotting where existing brands or suppliers are in terms of combining the variables, then identifying any gaps in the market”.
Sunday 9 December 2012
Model Answer (Market Mapping)
žWhat are the benefits to a restaurant of using market mapping and what are the implications in them positioning their business incorrectly(i.e. Setting high price for poor quality)?
If a restaurant uses market mapping, the restaurant is able to position their business in the market so that consumers are aware what to expect from different restaurants. e.g The Cheesecake Factory is positioned in a relatively high price with a high quality expectation from consumers. It allows a restaurant to establish the correct targeted consumers who are willing to pay certain prices, expect specific product quality etc. If a business positions itself incorrectly, consumers may not be offered the quality of food they expect for the price they are paying eg. low quality foods for high prices. The restaurant may ultimately suffer a decrease in demand and therefore profits if the pricing strategy does not match the quality of food available on the menu. It is hard then for a business to re-position themselves without losing creditably or their established customer base. With loss of profits and demand, the business may be forced to change their complete brand image, cut costs through lowering quality of meals or even cut staff to maintain business operation with decreased revenue.
If a restaurant uses market mapping, the restaurant is able to position their business in the market so that consumers are aware what to expect from different restaurants. e.g The Cheesecake Factory is positioned in a relatively high price with a high quality expectation from consumers. It allows a restaurant to establish the correct targeted consumers who are willing to pay certain prices, expect specific product quality etc. If a business positions itself incorrectly, consumers may not be offered the quality of food they expect for the price they are paying eg. low quality foods for high prices. The restaurant may ultimately suffer a decrease in demand and therefore profits if the pricing strategy does not match the quality of food available on the menu. It is hard then for a business to re-position themselves without losing creditably or their established customer base. With loss of profits and demand, the business may be forced to change their complete brand image, cut costs through lowering quality of meals or even cut staff to maintain business operation with decreased revenue.
Model answer-supply
Which of the following is a direct determinant of the supply of food?
A Level of technology
B Growth in consumer incomes
C Advertising to consumers
D Fashion, tastes and preferences
Model answer:
A
Firstly supply is the amount a producer is willing to produce or provide at a given price. The level of technology determines supply of food directly because the more advanced the technology, the more quantity can be produced. For example the use of Genetically Modifying food can be used to increase to increase agricultural yield. Furthermore fashion etc is a demand factor and influences supply onl indirectly, the same can be said for consumer incomes and advertising.
A Level of technology
B Growth in consumer incomes
C Advertising to consumers
D Fashion, tastes and preferences
Model answer:
A
Firstly supply is the amount a producer is willing to produce or provide at a given price. The level of technology determines supply of food directly because the more advanced the technology, the more quantity can be produced. For example the use of Genetically Modifying food can be used to increase to increase agricultural yield. Furthermore fashion etc is a demand factor and influences supply onl indirectly, the same can be said for consumer incomes and advertising.
Model answer
4 a) In november 2009, the unemployment rate in the district of Handsworth, Birmingham, reached 15% - its highest for over 10 years.
The most likely impact of high local unemployment on a small business would be
A) rising variable costs
B) problems recruiting staff
C) a significant fall in sales of luxury products
D) an increase in profits if the firm imports products
Answer ( C )
b) Explain your answer
The most likely impact of high local unemployment on a small business would be
A) rising variable costs
B) problems recruiting staff
C) a significant fall in sales of luxury products
D) an increase in profits if the firm imports products
Answer ( C )
b) Explain your answer
High levels of local unemployment means there are more people not working than there are this who are earning an income. Luxury goods are not necessities, therefore as income drops, demand for these items also tend to drop. If there are large amounts of people unemployed, these consumers will not be able to afford these goods as there is a smaller percentage of those working and earning an income. Demand for these unnecessary products will drop significantly meaning less luxury goods will be sold.
Model Answers
Costs of advertising is a business cost and if this cost decreases, overall business costs would decrease with it. To cause a rise in pasta prices, the cost of advertsising would have to increase. This means C is not likely to explain a price increase in pasta. A Subsidy is a form of grant given by the governemnt to producers in order to rise output and reduce production costs. D is therefore incorrect as a reduction in subsidies would explain a rise in pasta prices. Also, A, as producers are switiching to an alternative products, this would reduce the supply of wheat causing the prices of wheat required to make pasta to increase. Ths means A is also incorrect.
Use the case study below to answer the following question:
Bliss Conceptions
Bliss Conceptions is a small business that operates at home and has been in business for about a year. The company specializes in a variety of handmade gifts and keepsakes such as birthdays and weddings. These include wooden names, candles, signature books and invitations. The owner of Bliss Conceptions, Jodie, is wanting to expand her customer base and has decided to invest in the assistance of a upscale marketing consultant to help Bliss Conceptions get it’s products to a larger market. The marketing consultant suggested that Jodie does some market research to find out prices of her competitors to avoid loss of demand with higher prices then leading competitors in the handmade and keepsake market.
Evaluate the likely value of penetration pricing to Bliss Conceptions in their expansion (8 marks)
Penetration Pricing is when a business such as bliss conceptions, enters their products in the market with a lower price than anticipated to try and gain as much demand for the product as possible and attract customers. Penetration pricing will help Bliss Conceptions enter the market selling keepsakes and wooden names at a lower price to competitors. This will then generate demand for Jodie’s products and to be able to keep up with the low market price, it will enable Bliss Conceptions to focus on minimising unit costs right from the start. Jodie would have also encouraged word-of-mouth recommendation for her candles and cards because of the attractive pricing. However, with the use of penetration pricing, Jodie may struggle to keep production costs low enough to still make a profit when entering the market with low prices. Jodie may not be able to get cheaper supplies such as glue, ribbon and paint and may be forced to may a loss in order to gain a profit in the future. Jodie also undertook market research which means that the results of her market research would also determine whether or not her pricing strategies would have to change to suit the prices of competitors. Therefore, even though price penetration is useful for Jodie to gain enough demand in expanding, price penetration will only be useful if her market research has concluded that lower prices are needed to compete with other keepsake and crafts businesses already established.
Y12 Business - Revision Notes
Hi Y12's
There are comprehensive notes in the A-Level Business Studies room - Resources - Mrs Oates' lesson resources - Revision Notes.
Enjoy!
Wednesday 5 December 2012
Factors Affecting Supply & Demand
Demand = PASIFIC
Population
Number of firms
Technology
Subsidies
Weather
Costs of production
Population
Advertising
Substitutes
Income (Disposable)
Fashion and Taste
Income tax
Complements
Substitutes
Income (Disposable)
Fashion and Taste
Income tax
Complements
Supply = PINTS WC
Productivity
Indirect
taxesNumber of firms
Technology
Subsidies
Weather
Costs of production
Y12 Economics Questions
- Explain would happen to the prices of shreddies potentially if there was a storm across the main wheat plantations globally. (4 Marks)
- Explain the effect of a war in Saudi Arabia on world Oil prices. (4 Marks)
Write your answers in the comments below and bring in a supply and demand diagram you have drawn to explain the first question.
Monday 3 December 2012
Wednesday 28 November 2012
Inflation/Hyperinflation and Duck tales
If you want to understand inflation/hyperinflation watch this 6 minute clip of one of my favorite childhood programs...
CPI vs RPI
http://www.thisismoney.co.uk/money/article-1693602/CPI-RPI-What-does-it-all-mean.html
Hi Guys
We are talking economy over the next few lessons. You just need to know about the effect of government spending and taxation decisions upon businesses. Also you will need to know how the economic climate will affect businesses in general.
You do not need to know the difference between RPI and CPI unless you are studying economics but you may be interested so take a look above.
There is a valid debate going on as to the unfairness of the chancellor linking pensions to CPI as it means state pensioners (Which means the poorest pensioners if they have no additional private/public pension) lose out because CPI rises more slowly and therefore the government saves money. Is this fair? Or given how many state benefits and advantages pensioners have is it just a way of saving money to spend on the more youthful, productive members of society?
I am being argumentative but you would be surprised at some of the rhetoric surrounding this online and in the popular press.
Hi Guys
We are talking economy over the next few lessons. You just need to know about the effect of government spending and taxation decisions upon businesses. Also you will need to know how the economic climate will affect businesses in general.
You do not need to know the difference between RPI and CPI unless you are studying economics but you may be interested so take a look above.
There is a valid debate going on as to the unfairness of the chancellor linking pensions to CPI as it means state pensioners (Which means the poorest pensioners if they have no additional private/public pension) lose out because CPI rises more slowly and therefore the government saves money. Is this fair? Or given how many state benefits and advantages pensioners have is it just a way of saving money to spend on the more youthful, productive members of society?
I am being argumentative but you would be surprised at some of the rhetoric surrounding this online and in the popular press.
Tuesday 27 November 2012
Peer Teaching
Theory X & Y - Mr Oates
Curent Economic Climate - Mr Oates
Measuring Profit - Medis
Limited & Unlimited Liability/Ownership - Mariah
Non-Profit Motives for entrepreneurs - Suleyman
Market Niches/Researching demand - Brendan
Product Trials/Test Marketing - Suleyman
Positioning/Market Mapping - Harley
Order in which we will teach the main topics highlighted for revision.
Curent Economic Climate - Mr Oates
Measuring Profit - Medis
Limited & Unlimited Liability/Ownership - Mariah
Non-Profit Motives for entrepreneurs - Suleyman
Market Niches/Researching demand - Brendan
Product Trials/Test Marketing - Suleyman
Positioning/Market Mapping - Harley
Order in which we will teach the main topics highlighted for revision.
Sunday 25 November 2012
Today's Specification Task
Task 1
Download the specification here and choose 3 areas you would like to go back over or learn more about.
Task 2
Write a comment with your three area in order of importance to you.
Task 3
Decide as a group who will teach each of the specification areas in the form of a 20 minute activity.
Download the specification here and choose 3 areas you would like to go back over or learn more about.
Task 2
Write a comment with your three area in order of importance to you.
Task 3
Decide as a group who will teach each of the specification areas in the form of a 20 minute activity.
Wednesday 21 November 2012
"Noates" so simple
Today I want you to work on your perfect exam answer. Ask Harley for advice if you need some.
Once this is done I want you to write up any and all notes you will need for the above section of the exam spec. This should include equations diagrams and theory notes. Use Tutor2U of another viable source such as the textbook. Do not use random wiki rubbish!
Task for the weekend: Create an 8 mark question and mark scheme for one area of the above section with your own case-study.
Tuesday 20 November 2012
Break Even... The FINAL!
"Let the pork see the pie..."
"Let the hamster see the wheel"
Face it guys we are pretty bored with break-even, or at least I am. Now that I know Harley is a cyber-bully also I am a little wary of him sending me nasty messages so we need to move on fast.
I have given you a mark scheme today to mark the break-even question you have each done. We are going to look at the answers and decide who has the best answer and post it on the blog.
Now the last activity we will do is based on a really cool resource on the Tutor2U blog. I have a bunch of questions in a blank worksheet. Can you answer the lot? Tough challenge... We will see how you react to timed pressure.
We have had soem struggles with margin of safety so I am hoping this will help you put those demons to bed. Also great chance for Mariah to get her hear around some of the equations and what-not. Although she came right back in and got 2/5 of the best answers in our exam question merry-go-round...
Extra Support
TC = FC + VC
Profit = TR - TC
Net Profit Margin
Extra Support
TC = FC + VC
Profit = TR - TC
Net Profit Margin
Tonight's Task
Answer the Levi Roots question on break even. Ensure you have self assessed /8 what you think you have got and why.
Monday 19 November 2012
Exam Question Merry-Go-Round
Everyone loves a merry-go-round right?
Well today all your dreams will come true because I am bringing a Merry-Go-Round to the classroom!
In a manner of speaking...
Today's task will involved 6 different 4 mark exam questions all based around the last 2 weeks worth of work. You will start by picking a random question and attempt to sketch an answer on a sheet of paper next to the question. You will then after a set time move around to another, check the other students answer and change/improve it depending. You will do this until you have seen all 6 questions on the merry-go-round!
I will play the clown....
Sunday 18 November 2012
Exam Question Plenary
Tough question here, lets see if we can work it out. Remember you need to show working to explain why you are correct!
Measuring the potential success of a business idea lesson 2
Dragons Den Case Study
As a group you have worked very well to produce revision notes and explanations for the key information covering the above topic.
Today you need to apply everything you have learnt as a group and draw together the data and information used both pre and post dragons den.
You need to:
- Identify the pricing strategy you used as a group justifying why you chose this method. Evaluate whether another strategy could have been used.
- Show the work you did estimating costs and profit. For the purposes of this exercise I will be charging you 50DHS rent for your stall and you need to pay 25DHS for the machinery lease (FC's).
- Now work out your break even revenue level and your desired margin of safety. Justify how you reached these conclusions.
- Complete a basic profit and loss and work out the gross profit margin and the operating profit margin.
You must work as a group to put these together however to add extra challenge Suleyman and Brendan must complete section 3/4 and Harley and Medis must complete section 1&2. This means you will be working out areas which you did not study last lesson.
The figures for section 1&2 are needed for 3&4 so Suleyman and Brendan should spend the first 5-10 minutes revising these areas and preparing the graphs or spreadsheets they will need.
Follow up Starter
Medis to produce a student led starter of Margin of safety and its importance to entrepreneurs.
Saturday 17 November 2012
Measuring the potential success of a business idea
Our focus this week will be on the below:
Earlier in the year we conducted a dragons den competition for which you were highly successful. Your challenge today is to prepare yourselves as a class to answer exam style questions on these three areas. We will use your dragons den information later in the week.
As part of this today you will start with the theory today dividing up to learn about the following:
Group 1 (Suleyman & Brenden)
Group 2 (Harley & Medis)
You each need to prepare a fully informative comment on this post covering everything we need to know about these areas for the exam.
In Mondays lesson we will begin with a break-even starter demonstrated by Harley and will be using the research and practical information gathered in your Dragons Den project to demonstrate your knowledge so make sure this data is gathered together in readiness.
Earlier in the year we conducted a dragons den competition for which you were highly successful. Your challenge today is to prepare yourselves as a class to answer exam style questions on these three areas. We will use your dragons den information later in the week.
As part of this today you will start with the theory today dividing up to learn about the following:
Group 1 (Suleyman & Brenden)
- Different Pricing strategy's ADV's & Dis-ADV's
- Revenue, Fixed & Variable Costs.
Group 2 (Harley & Medis)
- What is break-even revenue and how can an SME work it out?
- How do we work out "Desired margin of safety" and why is it important for entrepreneurs to consider?"
You each need to prepare a fully informative comment on this post covering everything we need to know about these areas for the exam.
In Mondays lesson we will begin with a break-even starter demonstrated by Harley and will be using the research and practical information gathered in your Dragons Den project to demonstrate your knowledge so make sure this data is gathered together in readiness.
Tuesday 13 November 2012
Boston Matrix
Introduction to the Boston Matrix
A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.
A portfolio of products can be analysed using the Boston Group Consulting Matrix. This categorises the products into one of four different areas, based on:
•Market share – does the product being sold have a low or high market share?
•Market growth – are the numbers of potential customers in the market growing or not
How the Boston Matrix is Constructed
The Boston Matrix makes a series of key assumptions:
•Market share can be gained by investment in marketing
•Market share gains will always generate cash surpluses
•Cash surpluses will be generated when the product is in the maturity stage of the life cycle
•The best opportunity to build a dominant market position is during the growth phase
How does the Boston Matrix work?
The four categories can be described as follows:
•Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
•Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars
•Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?
•Unsurprisingly, the term “dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.
Ideally a business would prefer products in all categories (apart from Dogs!) to give it a balanced portfolio of products.
The main values of using the Boston Matrix include:
•A useful tool for analysing product portfolio decisions
•But it is only a snapshot of the current position
•Has little or no predictive value
•Does not take account of environmental factors
•There are flaws which flow from the assumptions on which the matrix is based
However, the model can be criticised in several ways:
•Market growth is an inadequate measure of a market’s attractiveness
•Market share is an adequate measure of a products ability to generate cash
•The focus on market share and market growth ignores issues such as developing a sustainable competitive
•advantages
•The product life cycle varies
Summary
Questions - Construct a Boston Matrix for the following companies:
McDonalds
Tesco
Coke
Emirates Airlines
Finally, all of you need to put together a Boston Matrix for Tim Hortons...
A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.
•Market share – does the product being sold have a low or high market share?
•Market growth – are the numbers of potential customers in the market growing or not
How the Boston Matrix is Constructed
The Boston Matrix makes a series of key assumptions:
•Market share can be gained by investment in marketing
•Market share gains will always generate cash surpluses
•Cash surpluses will be generated when the product is in the maturity stage of the life cycle
•The best opportunity to build a dominant market position is during the growth phase
How does the Boston Matrix work?
The four categories can be described as follows:
•Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
•Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars
•Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?
•Unsurprisingly, the term “dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.
Ideally a business would prefer products in all categories (apart from Dogs!) to give it a balanced portfolio of products.
The main values of using the Boston Matrix include:
•A useful tool for analysing product portfolio decisions
•But it is only a snapshot of the current position
•Has little or no predictive value
•Does not take account of environmental factors
•There are flaws which flow from the assumptions on which the matrix is based
However, the model can be criticised in several ways:
•Market growth is an inadequate measure of a market’s attractiveness
•Market share is an adequate measure of a products ability to generate cash
•The focus on market share and market growth ignores issues such as developing a sustainable competitive
•advantages
•The product life cycle varies
Summary
Questions - Construct a Boston Matrix for the following companies:
McDonalds
Tesco
Coke
Emirates Airlines
Finally, all of you need to put together a Boston Matrix for Tim Hortons...
Suleymans Sources of Finance Starter
A fantastic starter activity given by Suleyman which tested student understanding of the main sources of finance for businesses. Apologies for it being compressed. I will also post his slides later on at the weekend probably more for the teachers! I will be using his starter in the inspection next week...
Measurement of profit
Yesterday we went over basic profit and loss plus the calculations for Gross and Operating (Net) profit.
Today we want to discuss ways in which profit can be improved by a firm. For this I will use the below profit and loss account despite you not needing to know how a profit and loss account is put together yet.
Spot the difference?
Monday 12 November 2012
Profit Lesson
Y12: Learning Objectives:
You must be able to to define 'Gross Profit/Operating Profit' and Profit Margins [Grade E]
You should be able to explain why profit is important to a business [Grade C-B]
You could start to judge how profit can be improved within a business [Grade A]
Learning Activities You need to read through the worksheet that goes through the basics of profit. This is knowledge and it is vital you understand the formulas.
The link to the worksheet is here: Once you have looked over the key terms on the worksheet - in your groups: You need to find some news articles that mention the terms profits/profit margins.
Once you have found a good news article - you need to create a comment with the article and then create 3 exam questions that cover all the learning objectives mentioned above. Use your group members names when commenting.
Sunday 11 November 2012
Profit Lesson
Y12:
Learning Objectives:
You must be able to to define 'Gross Profit/Operating Profit' and Profit Margins [Grade E]
You should be able to explain why profit is important to a business [Grade C]
You could start to judge how profit can be improved within a business [Grade A]
Learning Activities
You need to read through the worksheet that goes through the basics of profit. This is knowledge and it is vital you understand the formulas.
The link to the fronter worksheet is here:
Once you have looked over the key terms on the worksheet - in your groups:
You need to find some news articles that mention the terms profits/profit margins.
Once you have found a good news article - you need to create a word document with the article and then create 3 exam questions that cover all the learning objectives mentioned above.
Drop into the folder on Fronter with your group names as file names.
Wednesday 7 November 2012
Y12 - Something for the weekend...
I want you to consider the below and make notes on what you learn:
Which sources of finance are more suitable for:
- Start-Ups
- Sole-Traders
- SME Ltd's looking to grow
- Large Ltd's looking to grow
Why is a venture capitalist not always a suitable source for smaller organisations compared to business angels?
Y12 Exam Question Lesson
Using last lessons exam question you need to peer assess each others answers.
For the 6 Mark Questions you are looking for Knowledge (2 Marks) and Application (4 Marks) in the students explanations.
For the 8 Marker we are looking for 2 Knowledge, 2 Application, 2 Analysis, and finally 2 Evaluation.
I will assess the marking myself. Remember the marking will be done in word and uploaded to fronter. Use the add comment function.
For the 6 Mark Questions you are looking for Knowledge (2 Marks) and Application (4 Marks) in the students explanations.
For the 8 Marker we are looking for 2 Knowledge, 2 Application, 2 Analysis, and finally 2 Evaluation.
I will assess the marking myself. Remember the marking will be done in word and uploaded to fronter. Use the add comment function.
Tuesday 6 November 2012
Equity Finance
I got asked by a student what Equity Finance was today in class. I gave a pretty awful explanation...
My explanation tried to make the link between what equity means and how that might be used to finance the business...
Think of equity as the amount left when you take liabilities away from the assets of a business. Now think of Equity finance as when you sell shares in your business in return for shareholders owning part of your equity. The new shareholders get entitled to dividends or a share in the profits and the original owners lose some control of the business.
Now you can raise equity finance by issuing share to existing shareholders (Rights Issue) which means you avoid having to bring in new shareholders as a LTD company.
You might also decide to issue shares to new shareholders on the stock exchange either by floating your business for the first time to become a PLC or as an existing PLC. This is the way to get the largest amount of investment however there are risks involved. Plus it puts you under a lot of external and internal scrutiny just look at Facebook and the negativity around their share prices of late!
Another way might be to keep (retain) profits in a business rather than issue dividends to your shareholders. This might not be popular with them but if it is being used to fun growth and invest in the business in return for larger future profits then shareholders will likely be happy enough to accept that.
Remember business have a legal obligation to deliver the maximum possible value/return to shareholders!
Tutor 2 U also has a round up on Equity Finance and if you look on the right hand side after reading the article they have links to a lot of additional information on the other sources of finance for businesses. Remember to focus on SME's for the moment...
My explanation tried to make the link between what equity means and how that might be used to finance the business...
Think of equity as the amount left when you take liabilities away from the assets of a business. Now think of Equity finance as when you sell shares in your business in return for shareholders owning part of your equity. The new shareholders get entitled to dividends or a share in the profits and the original owners lose some control of the business.
Now you can raise equity finance by issuing share to existing shareholders (Rights Issue) which means you avoid having to bring in new shareholders as a LTD company.
You might also decide to issue shares to new shareholders on the stock exchange either by floating your business for the first time to become a PLC or as an existing PLC. This is the way to get the largest amount of investment however there are risks involved. Plus it puts you under a lot of external and internal scrutiny just look at Facebook and the negativity around their share prices of late!
Another way might be to keep (retain) profits in a business rather than issue dividends to your shareholders. This might not be popular with them but if it is being used to fun growth and invest in the business in return for larger future profits then shareholders will likely be happy enough to accept that.
Remember business have a legal obligation to deliver the maximum possible value/return to shareholders!
Tutor 2 U also has a round up on Equity Finance and if you look on the right hand side after reading the article they have links to a lot of additional information on the other sources of finance for businesses. Remember to focus on SME's for the moment...
Sources of Finance L2
Hi Y12
Stage 1
I want you to complete the questions set by Mrs Oates after reading the Tiffinbites article she posted. Just focus on the key outcome questions.
Stage 2
Now download this exam question worksheet. You need to complete it for homework if not completed in class due for Thursday.
Monday 5 November 2012
Next lessons student led starter
Next lesson I want Suleyman to lead a starter activity on:
- Identifying the difference between internal & external sources of finance.
- Explaining the drawbacks to each source of finance.
- Judging the sources of finance suitable to a start-up business
The resources used will be posted along with a video of the activity as it happens to help with revision later on.
Sources of Finance Lesson
Sunday 4 November 2012
Business Plans
http://www.tutor2u.net/blog/index.php/business-studies/comments/business-planning-teaching-resources
Information on business plans!
Tiffinbites -
Have a read of this article about Jamal Hirani - the founder of Tiffinbites
http://www.guardian.co.uk/business/2008/aug/29/fooddrinks
There are a variety of business concepts that come out of this. In your groups - read through the article and come up with some answers to the following questions.
Revision Questions
What were Jamal's motives for setting up his business?
What was one key characteristic that Jamal showed?
What type of market is Jamal operating in?
Key Learning Objective:
Identify one source of finance that Jamal used to set up his business. [Grade D/E]
Explain the advantages and disadvantages of this type finance [Grade C/B]
Discuss at least 3 other types of external finance that Jamal might be able to use [Grade B/A]
The last learning objective will need some research in textbooks!
Saturday 3 November 2012
Obama Vs Mitt Romney: Who will win?
I hope you have all heard about a big election going on across the Atlantic Ocean. The ripple effects of this result will be felt all around the world as the worlds superpower decides who it will ask to guide its economy for the next 4 years. There are many issues being fought over in the election which you can see here. However, for many it is a straight choice between a republican candidate accused of flip flopping and a democratic president accused of not bringing forth the promised change of his first election. America will make its choice and we will just have to wait and see. The BBC has an awesome Poll tracker you can use by just clicking the image above but you can see just how close the race is!
When it comes to economics these two candidates have quite polar views (depending on the crowd being addressed by Mitt Romney sometimes...) and although we might think it will not affect us Americas economy is so large it allways will. They have a great deal of debt especially to China and so they need to be paying this off. They are also responsible for a great deal of global demand for products and services along with producing a lot themselves. The world needs a growing US economy, the question is which candidate will give us this? I can't be biased here but I have an opinion. Do any of you have one?
Friday 2 November 2012
Corporate Social Responsibility
Starbucks have paid next to no taxes in the UK by declaring that they are making a loss in their UK stores. This despite apparently telling investors that the UK market is highly profitable...
Make up your own mind but it raises the question of corporate social responsibility. This is something we will discuss in class next term, personally I don't like Starbucks regardless and I will make sure I do not spend my money in their chains until this gets cleared up. I want company's to pay their fair share of UK taxes as I once did!
Tuesday 30 October 2012
Term 1 Business Test
All and good luck in advance!
Go to fronter here: A-Level Business Studies - Resources - Tests
You will have 45 minutes max to complete the test once you begin.
In the real exam you would use about half of that time to complete this test so be aware of this.
Anyone above 90% can collect a doughnut from me! (This excludes you Mrs Oates!)
Go to fronter here: A-Level Business Studies - Resources - Tests
You will have 45 minutes max to complete the test once you begin.
In the real exam you would use about half of that time to complete this test so be aware of this.
Anyone above 90% can collect a doughnut from me! (This excludes you Mrs Oates!)
Wednesday 24 October 2012
Pop-up shops and entrepreneurs to prosper from high street changes
I read this article over the summer and thought it was pretty interesting. It looks at how there has been a growth in pop up shops.
So I had take a picture when Mr Oates and I visited Dubai Mall over the weekend...
Article Link: http://www.communities.gov.uk/news/newsroom/2185509
Jack Wills are opening up a store in Dubai Mall in the next few months.
What business concepts can you come up with about this image?
Tuesday 23 October 2012
Proof that Product Trials Work!
Earlier this week we showed a story about facebook conducting a product trial for their mobile advertising system... This is the result of that product trial! Click the image to follow the story in full
Facebook and exam questions
Exam Skills: Application
Mrs Oates' Y12 Business Studies Students have been watching the Facebook documentary as part of the work on Entrepreneurial characteristics.
The following exam question was set: To what extent do you believe that Mark Zuckerburg's characteristics have lead to the success of Facebook? [8 marks]
The students will be posting their answers to this question tomorrow and will be working on developing their 'application' skills.
Monday 22 October 2012
Which Degree course do your A-Levels Suit?
Click the image to follow the link! Really useful if you are considering your future degree courses.
Elasticity of Demand
Key video to help you with elasticity of demand... The Economics students among you should be fine given you have had a far superior teacher go through this with you! However, This will help you out and I have a link below where you can test yourself from the awesome Tutor2U
Tutor 2 U Revision Notes
http://www.tutor2u.net/economics/revision-notes/as-markets-price-elasticity-of-demand.html
PowerPoint
http://www.tutor2u.net/economics/presentations/aseconomics/markets/PriceElasticityofDemand/default.html
Quiz
http://www.tutor2u.net/business/quiz/priceelasticity/quiz.html
Tutor 2 U Revision Notes
http://www.tutor2u.net/economics/revision-notes/as-markets-price-elasticity-of-demand.html
PowerPoint
http://www.tutor2u.net/economics/presentations/aseconomics/markets/PriceElasticityofDemand/default.html
Quiz
http://www.tutor2u.net/business/quiz/priceelasticity/quiz.html
Sunday 21 October 2012
Entrepreneurs in action - Mark Zuckerberg
Thanks to Mrs Oates for finding this great video highlighting the enterprising qualities of Mark Zuckerberg, the founder and creator of facebook.
Inside Facebook 59 min (Documentary) from Świat Social Media on Vimeo.
Inside Facebook 59 min (Documentary) from Świat Social Media on Vimeo.
Entrepreneurs & Calculated Risks
Entrepreneurs & Calculated Risk
- Entrepreneurs take calculated risks by seeing the upside that could come from any business situation.
- They stack the cards in their favor by calculating the potential for profit vs. the potential for loss.
- Most people see risk as a negative thing whilst entrepreneurs see opportunity.
"Calculated
Risk Taking" is one of the skills we should describe entrepreneurs as having.
Thursday 18 October 2012
Wednesday 17 October 2012
What is a "Repeat Purchase?"
As some will know (Mrs Oates included...) I have a bit of a gaming hobby. Anything from Guild wars 2, Skyrim and The Witcher 2 to FPS' like Call of duty, Fear 3 and a bit of Borderlands2. The question is why do I often buy games which come from the same series? My wife of course seems to think that surely if you have played one game they are all the same right? Hmmm not quite...
Games are like books, each with a story-line to follow (of varying degrees of quality) and characters to immerse yourself with. So in a way these games developers have developed a great deal of customer loyalty with me and convinced me to make purchases of their products each time they come out with newer versions. However, some of my games are played on the XBOX platform and as such to play online I have to purchase a gold membership annually. My wife of course thinks this is a waste of money... You, I hope, will explain to her why this is not the case!
http://www.computerandvideogames.com/359067/xbox-live-membership-jumps-15-per-cent-in-single-year/
My Question is as follows: Identify what is meant by a repeat purchase and Assess the reasons why XBOX Live has so many repeat purchases year on year whilst PS3 has a free online gaming option.
Games are like books, each with a story-line to follow (of varying degrees of quality) and characters to immerse yourself with. So in a way these games developers have developed a great deal of customer loyalty with me and convinced me to make purchases of their products each time they come out with newer versions. However, some of my games are played on the XBOX platform and as such to play online I have to purchase a gold membership annually. My wife of course thinks this is a waste of money... You, I hope, will explain to her why this is not the case!
http://www.computerandvideogames.com/359067/xbox-live-membership-jumps-15-per-cent-in-single-year/
My Question is as follows: Identify what is meant by a repeat purchase and Assess the reasons why XBOX Live has so many repeat purchases year on year whilst PS3 has a free online gaming option.
A lesson on "Product Trials"
I challenged by my business students to choose from a set of 6 topics to teach the class leaving me one to cover. I was hoping for Market Mapping simply because I have a pretty good lesson on this already. However, I got left with the above so here goes I guess...
Product Trials
Consider the above trial shown on the BBC website here. It is quite straight forward to Identify what a product trial is so start by giving me a quick definition.
Now Apply your understanding of product trials and Analyse the advantages Facebook will have gained by conducting a product trial before rolling out their new mobile as system.
However, this sort of product trial is not without its pitfalls... Explain what you think the possible negatives of this product trial could be and then Judge whether you feel that Facebook should have gone ahead with the trial in the first place.
Post your answer in the comments below and write in how many marks you think out of 8 you think your answer is worth.
Product Trials
Consider the above trial shown on the BBC website here. It is quite straight forward to Identify what a product trial is so start by giving me a quick definition.
Now Apply your understanding of product trials and Analyse the advantages Facebook will have gained by conducting a product trial before rolling out their new mobile as system.
However, this sort of product trial is not without its pitfalls... Explain what you think the possible negatives of this product trial could be and then Judge whether you feel that Facebook should have gone ahead with the trial in the first place.
Post your answer in the comments below and write in how many marks you think out of 8 you think your answer is worth.
Competitive Advantage
One of my Business Students had a go at explaining competitive advantage using this Tutor2U article
This is a really good article explaining some ways in which firms can gain a sustainable competitive advantage. However, what I think is important to point out to students is that Competitive Advantage does not need to be overly complicated. Different firms find different ways to create a competitive advantage. It is sometimes easier to consider it with the use of the 4P's.
You could adopt different Pricing strategies to open up an advantage to your competitors. Price leadership would require economies of scale but that is not the only pricing strategy you could use to have an advantage over your competitors. You also don't have to be the cheapest in an entire country, could you not simply be the cheapest most convenient supplier to your customer base?
Firms don't have to be the biggest, if they can find a USP as this business has managed to find. Are Apple Macbooks and tablets popular because they are the best? I cant stand Macbooks but the article here suggest they are quite reliable. Shame they struggle to connect to our school internet depending on which way the wind blows...
Years ago another firm brought out an innovative product in 2001... A tablet PC with the CEO claiming "This will be the most popular computer bought in america within 5 years..." That CEO was Bill Gates and business was the mighty Microsoft. Why did that product fail when 10 years later Apple bring out pretty much the same thing but it succeeds? Apple has a massive competitive advantage as it stands but why is this? Is it their product? Is it the brand? As with everything Apple seems to defy the odds and come out on top! Microsoft have a history of doing this to their competitors which is why they are so big which makes it all the stranger.
Some other ideas about competitive can be found in the below article... 37 in fact!
http://www.smarta.com/advice/business-planning/market-research/37-ways-to-beat-your-competitors
What about R&D being a means to creating competitive advantage?
http://paidcontent.org/2011/08/30/419-samsung-investing-a-small-fortune-in-rd-will-webos-be-included-in-that/
This is a really good article explaining some ways in which firms can gain a sustainable competitive advantage. However, what I think is important to point out to students is that Competitive Advantage does not need to be overly complicated. Different firms find different ways to create a competitive advantage. It is sometimes easier to consider it with the use of the 4P's.
You could adopt different Pricing strategies to open up an advantage to your competitors. Price leadership would require economies of scale but that is not the only pricing strategy you could use to have an advantage over your competitors. You also don't have to be the cheapest in an entire country, could you not simply be the cheapest most convenient supplier to your customer base?
Firms don't have to be the biggest, if they can find a USP as this business has managed to find. Are Apple Macbooks and tablets popular because they are the best? I cant stand Macbooks but the article here suggest they are quite reliable. Shame they struggle to connect to our school internet depending on which way the wind blows...
Years ago another firm brought out an innovative product in 2001... A tablet PC with the CEO claiming "This will be the most popular computer bought in america within 5 years..." That CEO was Bill Gates and business was the mighty Microsoft. Why did that product fail when 10 years later Apple bring out pretty much the same thing but it succeeds? Apple has a massive competitive advantage as it stands but why is this? Is it their product? Is it the brand? As with everything Apple seems to defy the odds and come out on top! Microsoft have a history of doing this to their competitors which is why they are so big which makes it all the stranger.
Some other ideas about competitive can be found in the below article... 37 in fact!
http://www.smarta.com/advice/business-planning/market-research/37-ways-to-beat-your-competitors
What about R&D being a means to creating competitive advantage?
http://paidcontent.org/2011/08/30/419-samsung-investing-a-small-fortune-in-rd-will-webos-be-included-in-that/
Whats the point in learning about SWOT?
Above we see the work of one of our excellent business studies students where they have produced a Prezzi presentation which they used in class to explain what SWOT was all about.
However, one business teacher recently asked me why teach something that was not on the specification? Indeed my students now reading this may have flickers of annoyance that they have worked hard to learn about something that strictly speaking the exam board do not ask to be taught...
My feeling on this matter are quite straight forward. Students are asked to know how to explain the "...Strengths and weaknesses of existing suppliers, [and] how [businesses] differentiate themselves..." SWOT analysis is useful as it gives a business the opportunity to look internally at strengths and weaknesses and externally at possible threats and opportunities. As my well informed student put it "This allows them to consider the positives and negatives of their brand."
If you want to explain how businesses can assess their own strengths and weaknesses we can discuss the use of SWOT analysis. Also if we want to know the strengths and weaknesses of other suppliers (competitors) can we not do a SWOT analysis for that business also? This gives us an idea of some of the key advantages that another business may or may not have and as such target them.
Of course if using SWOT analysis within an exam question we should always remember it is a simplistic way of looking at the bigger picture and requires an in depth knowledge of the marketplace around a business to do properly. We either need very experienced staff to assist with this or, more reliably, extensive market data to support our SWOT analysis. As such it is a way of visualizing our current position with the help of our data and knowledge.
Wednesday 3 October 2012
Factors which affect demand: Harleys Student Led Starter
Harleys "Factors which affect demand" Starter Activity
Harley's task was to assess student understanding for the following:
Identifying factors which affect
demand (Grade E) & Explaining the potential
positive/negative effect on demand of these factors (Grade D-C).
Do you think he was successful in doing this?
Tuesday 25 September 2012
The World Trade Organisation
A few resources when looking at the role of the WTO.
The WTO recently released their revised estimates for the growth in world trade for 2012, 2.5% (revised down from 3.7%), and 2013, 4.5% (revised down from 5.6%).
This link to their website can be used to discuss the role the WTO plays in international trade. There is also a short video which provides an excellent introduction to the history and objectives of the WTO: (a more detailed history from Bretton Woods to GATT to WTO is available if you click here)
The WTO recently released their revised estimates for the growth in world trade for 2012, 2.5% (revised down from 3.7%), and 2013, 4.5% (revised down from 5.6%).
This link to their website can be used to discuss the role the WTO plays in international trade. There is also a short video which provides an excellent introduction to the history and objectives of the WTO: (a more detailed history from Bretton Woods to GATT to WTO is available if you click here)
Sunday 16 September 2012
Business Plan the Levi Roots way!
Welcome to the world of Business Year 9. You are about to watch a clip of Levi Roots, a budding entrepreneur who needs finance to move his business forward.
Whilst you watch this clip I want you to consider the following questions:
Is the name 'Reggae Reggae' Sauce a good one? (Think about why?)
Where should he sell his product?
Would you buy his product? (if not, why not?)
Why di you think 3 Dragons pulled out?
What is the most important reason the Dragons invested in 'Reggae Reggae' Sauce?
Did Levi have a good business plan? (did he have one at all?)
Whilst you watch this clip I want you to consider the following questions:
Is the name 'Reggae Reggae' Sauce a good one? (Think about why?)
Where should he sell his product?
Would you buy his product? (if not, why not?)
Why di you think 3 Dragons pulled out?
What is the most important reason the Dragons invested in 'Reggae Reggae' Sauce?
Did Levi have a good business plan? (did he have one at all?)
Tuesday 14 February 2012
Financial and non-financial motivation
Year 12 Business homework: Define and give an example for these methods of financial and non-financial motivation. Remember the case study on online recruitment too!
Financial and non financial motivation
View more presentations from sarameeajan.
Saturday 11 February 2012
Organisational Structure and Delayering..
Thanks to James who found this article on economist.com which gives an excellent summary on the impact of delayering.
Wednesday 8 February 2012
From banking to ice cream making
Tuesday 7 February 2012
The challenges of setting up a business the Middle East
This article on the BBC website highlights some interesting points about starting up a business in the Middle East. Skilled workers lured to the Middle East by attractive tax free salaries come at a price. The entrepreneur in this article has faced difficulties in recruiting the right person for the job.
Bureaucracy is also an enormous hurdle to overcome for start ups. If the UAE wishes to encourage entrepreneurs then they must re-think business regulations.
Bureaucracy is also an enormous hurdle to overcome for start ups. If the UAE wishes to encourage entrepreneurs then they must re-think business regulations.
Sunday 29 January 2012
Y12 Bus - A Look into the VW Factory
This 6 minute video gives you a guided tour of VW’s “transparent factory”. The factory, located in Dresden, is designed not only to make high quality luxury cars. It aims to build the brand values inherent in the product.
Fantastic examples of robotic technology in action; it’s amazing how the robots are guided by tens of thousands of magnets built into the factory floor. The use of “intelligent tools” is quite mind-blowing; a great example how flow production can be used in the production of high specification and complex products .
Customers are paying premium price for their car, so it’s a neat twist allowing them to both view and (in some cases) build their own cars. Good examples of the use of quality control too before finished cars are transported to the storage silo.
Why is it called a transparent factory? Every part of the production process is visible from all parts of the factory. Where traditional factories have walls, this factor has glass - everywhere.
Fantastic examples of robotic technology in action; it’s amazing how the robots are guided by tens of thousands of magnets built into the factory floor. The use of “intelligent tools” is quite mind-blowing; a great example how flow production can be used in the production of high specification and complex products .
Customers are paying premium price for their car, so it’s a neat twist allowing them to both view and (in some cases) build their own cars. Good examples of the use of quality control too before finished cars are transported to the storage silo.
Why is it called a transparent factory? Every part of the production process is visible from all parts of the factory. Where traditional factories have walls, this factor has glass - everywhere.
Sunday 8 January 2012
Thursday 5 January 2012
Unit 4: Business Ethics
This is a superb video ideal for introducing ethics in BUS4.
It's a very rare 10 minute only fools and horses christmas special where Del is trying to ‘shift’ 150 christmas trees. It all ends with what Rodney sees to be unethical behaviour, and when he says to Del, ’ you dont even know what ‘effics’ are do ya? Del replies, ‘effics, course I do, they make model airplanes’!
It even touches on the recession and promotion.
Superb, and after showing the video, the class can discuss what they think ethics mean and then discuss whether or not Del Boys antics were ethical or not.
Priceless.
Enjoy…...............
It's a very rare 10 minute only fools and horses christmas special where Del is trying to ‘shift’ 150 christmas trees. It all ends with what Rodney sees to be unethical behaviour, and when he says to Del, ’ you dont even know what ‘effics’ are do ya? Del replies, ‘effics, course I do, they make model airplanes’!
It even touches on the recession and promotion.
Superb, and after showing the video, the class can discuss what they think ethics mean and then discuss whether or not Del Boys antics were ethical or not.
Priceless.
Enjoy…...............
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