Contents. GCE A and AS Business Studies Teachers' Guide. Page. 1. Introduction Overview of Specification Changes to Content 9

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1 GCE AS and A BUSINESS STUDIES Teachers' Guide 1 Contents GCE A and AS Business Studies Teachers' Guide Page 1. Introduction 3 2. Overview of Specification 4 3. Changes to Content 9 4. Scheme of Work Key Examination Command Words Resources 61

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3 GCE AS and A BUSINESS STUDIES Teachers' Guide 3 1. INTRODUCTION The WJEC AS and A2 Business Studies specification has been modified and updated for delivery from September Some examinations at AS level will take place in January 2009 and some A2 assessments will take place in January The first AS award is in June 2009 and the first A2 award is in The specification can be delivered and assessed in centres throughout the UK. The revised subject criteria for GCE Business Studies issued by the regulators have necessitated a change in the course structure from the current 3 plus 3 units to a 2 plus 2 structure. It is the intention of this Guide to be but one of several in which the WJEC provides assistance to teachers delivering the specification sitting alongside: the Specimen Papers and INSET conferences. WJEC provides the following as part of its support for all GCE specifications: Examiners reports on each examinations series Free access to past question papers via the WJEC secure website Easy access to the specification and other key documents on the main website Regular INSET delivered by Chief Examiners Easy access to both the Subject Officer and to administrative sections Contact Points for GCE Business Studies: Stephen Oliver stephen.oliver@wjec.co.uk (Subject Officer) Sally Griffiths sally.griffiths@wjec.co.uk (Subject Support Officer)

4 GCE AS and A BUSINESS STUDIES Teachers' Guide 4 2. OVERVIEW OF SPECIFICATION AS The new AS specification in Business Studies has two units, BS1 The Business Framework and BS2 Business Functions. The aim of BS1 The Business Framework is to give candidates an introduction to Business Studies. It is recognised that not all of them will have studied the subject at GCSE and this unit will provide the necessary core subject knowledge, understanding and skills that will enable them to progress with confidence to Unit 2. BS1 will be examined through compulsory short-answer questions with questions often based on stimulus material. The examination will be one hour and fifteen minutes in duration and candidates will answer in a question and answer booklet. It will be marked out of 50 and will carry a UMS weighting of 80 marks (40% of the AS award). Teachers if they wish will be able to tailor their scheme of work and complete this Unit in time for a January examination. There are certain advantages in entering candidates for a January sitting e.g. it gives focus to teaching and adds an element of motivation for candidates. It also means that candidates who do well need not sit again in June and those who do not achieve the grade they are capable of receive a wake up call. As always whilst there are merits in the January sitting there are some disadvantages. Using the January examination for year 12 candidates means there will be some re-visiting of topics e.g. marketing when they move on to BS2 Business Functions and it is also recognised that some candidates who do not do well may be de-motivated. A linear approach will ensure greater coherence. The WJEC has no opinion on whether or not a year 12 sitting is desirable it depends on a range of variables at centre level. The aim of BS2 Business Functions is to build on the knowledge, understanding and skills gained in Unit 1. Some topic areas are re-visited so that more complex concepts can be explored e.g. extension strategies and the product life cycle. In addition, there are new and challenging areas of study, including the section on accounting and finance. BS2 will be examined through compulsory data response and compulsory shortanswer questions. The examination will be one hour and forty-five minutes in duration. It will be marked out of 70 and will carry a UMS weighting of 120 marks (60% of the AS award). Questions in BS2 will draw on the knowledge gained in BS1 and it will be assumed that candidates have this knowledge when attempting BS2.

5 GCE AS and A BUSINESS STUDIES Teachers' Guide 5 A2 The A2 Business Studies specification builds on the AS specification. The A2 specification has two units, BS3 Business Decision-Making and BS4 Business Strategy and Practice. The aim of BS3 Business Decision-Making is to provide an overview of business strategy. Business organisations need to assess their own strengths and weaknesses and consider how they can best respond to the threats and opportunities posed by changes in the external environment. BS3 will be examined through compulsory questions based on case study. This is an unseen case study and will be in the same style and format as the current BS6. The examination will be two hours in duration. It will be marked out 60 and will carry a UMS weighting of 120 marks (25% of the A level award). Teachers if they wish will be able to offer this examination paper to their candidates in January of year 13. The advantage is that a good performance will mean that there is no need to sit the examination again in June. However, it is important to remember that the subject knowledge contained in BS3 will be tested in the synoptic essays in BS4. The aim of BS4 Business Strategy and Practice is to focus on how business objectives are to be achieved once they have been decided. This unit focuses on the methods that businesses can use in order to meet their objectives. It breaks these methods down into functional areas: marketing, finance, human resources and operations management (including purchasing and stock control). BS 4 is new in style and has been designed to give opportunities in Section A to examine the numerical parts of the specification. The structure of the previous examination meant these areas were only tested in written form. In addition the use of synoptic essays in Section B has meant that the WJEC has been able to provide the stretch and challenge required by the regulatory authorities. BS4 will be examined through compulsory problem solving questions often based on stimulus material (Section A) and one synoptic essay from a choice of three questions (Section B). The examination will be two hours in duration. It will be marked out 60 (40 marks in Section A and 20 marks in Section B and will carry a UMS weighting of 120 marks (25% of the A level award). Examination papers for BS3 and BS4 include some marks which specifically address the requirement for synoptic assessment. In BS3 two of the questions will be synoptic and will be identified on the question paper and in BS4 the essay questions in Section B will be synoptic. Synoptic assessment in Business Studies means testing candidates' understanding of the connections between different aspects of the subject and will involve the explicit integration of knowledge, understanding and skills learned in different parts of the subject. Candidates will be expected to demonstrate their holistic understanding of Business Studies.

6 GCE AS and A BUSINESS STUDIES Teachers' Guide 6 It is important that candidates understand the meaning of synoptic assessment in Business Studies. It requires candidates to make and use connections between different areas of the subject at AS and A2, for example by: applying knowledge and understanding of more than one area of the subject content to a particular situation or context; analysing and synthesising business problems and issues using key principles, concepts and theories; integrating and evaluating knowledge and evidence to draw valid, logical conclusions. Supporting the wider curriculum Spiritual, moral, ethical, social and cultural issues This specification supports the wider curriculum in a number of ways. There are opportunities to examine the decision-making process in organisations from the perspective of numerous stakeholders. Students will need to be aware that a range of spiritual, moral, ethical, social and cultural issues inform such decision-making and the resolution of business problems. Opportunities to explore such issues exist in numerous areas e.g. marketing and the roles of people in organisations. Citizenship The importance of citizenship is fully covered and students will have the opportunity to develop knowledge and understanding of rights and responsibilities, legal and democratic institutions, issues of diversity, roles of profit and not-for-profit organisations, conflict and resolution, economic development and environmental issues. Environmental issues Students are made aware that business decision-making is informed and constrained by environmental issues. Opportunities to explore such issues exist in location and the impact on business of the external environment.

7 GCE AS and A BUSINESS STUDIES Teachers' Guide 7 Young Enterprise The specification provides firm grounding for those students who are following a course in Young Enterprise. It is actually possible for teachers, if they wish, to deliver much of the requirements of Young Enterprise through the first unit BS1, The Business Framework. In BS1 the focus is initially on the importance of the entrepreneur as an innovator, organiser and risk taker and the recognition that there are a variety of for-profit and not-for-profit business organisations operating in the private sector with a range of aims and objectives. All students on Young Enterprise will need to be aware of the importance of finance and finding a gap in the market. There are significant sections on the appropriate types of finance for different circumstances and on identifying and anticipating customer needs and wants, including market research, market segmentation, market share and growth. It is vital that students are aware that businesses operate in a dynamic environment and external influences, including competition and the economic environment, present significant opportunities and threats to businesses and their stakeholders. The BS1 is detailed in this area and fully complements any scheme that is exploring business and enterprise education. Young Enterprise provides an opportunity for students to acquire Key Skills and this specification allows all of them to be developed at level 3. Mapping the opportunities for the development of these skills against Key Skills evidence requirements is provided in 'Exemplification of Key Skills for Business Studies available on WJEC website.

8 GCE AS and A BUSINESS STUDIES Teachers' Guide 8 SUMMARY OF ASSESSMENT This specification is divided into a total of 4 units, 2 AS units and 2 A2 units. Weightings noted below (in brackets) are expressed in terms of the full A level qualification. All four units are external assessment units. AS (2 Units) BS1 40% (20%) 1 hr 15 mins Written Paper The Business Framework Short-answer questions, all compulsory. Paper raw mark total: 50 Paper UMS total: 80 BS2 60% (30%) 1 hr 45 mins Written Paper Business Functions Data response plus short-answer questions, all compulsory. Paper raw mark total: 70 Paper UMS total: 120 A Level (the above plus a further 2 Units) BS3 (25%) 2 hr Written Paper Business Decision-Making Compulsory questions based on a case study. Paper raw mark total: 60 Paper UMS total: 100 BS4 (25%) 2 hr Written Paper Business Strategy and Practice Section A compulsory short-answer questions and problemsolving questions. (40 marks) Section B - one synoptic essay from a choice of 3. (20 marks) Paper raw mark total: 60 Paper UMS total: 100

9 GCE AS and A BUSINESS STUDIES Teachers' Guide 9 3. CHANGES TO CONTENT In the new specification the content has been reduced to make it more manageable. This has been achieved by removing some topics and moving others, e.g. the macroeconomic environment, to the A2. In addition, there is very little revisiting of topic areas in the A2. In the new specification it will no longer be necessary to teach perfect competition. Centres may, however, choose to teach it if they think it gives students a better understanding of monopolistic competition, monopoly and oligopoly. Similarly, there is no need to teach free, command and mixed economies. Again, they can be taught if it is felt that knowledge of the different types of economy will give students a better understanding of the environment in which businesses operate. The following topics, some of which are primarily of historical interest or were included in the previous subject criteria have also been removed: nationalisation; privatisation; deregulation; chain of production; value added; regulated private utilities; the Social Chapter; training and development; internal and external quality assessment, short-run and long-run average costs. A number of topics have moved from the AS to the A2, which in the old specification was in contrast to the AS perhaps a little light in content. These topics include: the balance sheets of companies (balance sheets of sole traders remain in AS) and corporate culture - a concept students find difficult. The subject criteria has moved macroeconomic factors interest rates, exchange rates, inflation and taxation to A2 along with employer/employee relations. We have also chosen to move the European Union, the euro, the main areas of UK and European Law that impact on businesses and sales forecasting to A2. There are some new topics for the AS. These can be divided into those included in BS1 and those included in BS2. In BS1 the functions of the entrepreneur, which were implicit in the old specification, have been included. We have also included asset-led marketing, organic and external growth, horizontal and vertical integration and the survival of small firms. Whilst nationalisation and privatisation have been removed we believe that students should appreciate the role of local and national government in providing public goods and merit goods. Businesses operate in an environment that is constantly changing and students should be aware of how unforeseen events impact on business. Inclusion of this topic should encourage them to keep abreast of current affairs. In the old specification whilst packaging and branding were present implicitly they have now been placed clearly in BS2 along with industrial marketing. In addition in BS2 students will be expected to consider what-if analysis in relation to break-even charts and the impact of changes in costs and revenue on gross and net profit of businesses. Finally in BS2 students will need to understand the importance of workforce planning and layering and delayering.

10 GCE AS and A BUSINESS STUDIES Teachers' Guide 10 At A2 the following no longer need to be taught: full costing; trends in consumer behaviour; return on net assets (RONA) and current trends in the labour market. In BS3 the vehicle for assessment is an unseen case study. You must check the specification for content but the following topics are flagged up because in the old specification they were previously in the AS or did not feature at all. macroeconomic factors interest rates; exchange rates, inflation and taxation; mission statements; SMART objectives; risk and uncertainty; tactical decisions; SWOT analysis; Porter s Five Forces Framework; private equity buy-outs. In BS4 you must check the specification for content but the following topics are flagged up because in the old specification they were previously in the AS or did not feature at all. data analysis this was placed in the A2 by QCA/DCELLS but in effect students will need to develop the skill of data presentation and data analysis in the AS part of the course; asset-led and market-led marketing strategies; effective communication in the workplace; outsourcing.

11 GCE AS and A BUSINESS STUDIES Teachers' Guide SCHEME OF WORK This scheme of work has been devised by Dr Fran Thomason, Head of Business at Clayesmore School, Dorset and edited by WJEC. It has been drawn up so that centres can offer an AS examination opportunity in January for year 12 and an A2 examination opportunity in January for year 13. Centres which do not wish to take these opportunities can adopt a different approach e.g. in AS all of marketing can be treated as one topic. The scheme of work is based on the premise that centres will be allocated a minimum of four hours of teaching time per week. BS1 should take thirteen weeks to deliver and BS2 sixteen weeks. It is assumed that year 12 students will be taught following the completion of their AS examinations and therefore sixteen weeks has been allocated to both BS3 and BS4. The scheme of work is divided into four units, namely BS1, BS2, BS3 and BS4. Each unit is organised into two sections. The first section indicates the number of weeks that might be allocated to each part of the subject content for each unit. The second section is set out in a four-column format. The first two columns Amplification and Notes for Guidance have been taken from the specification. Columns three and four are titled Lesson Content and Activities and Resources respectively. Lesson Content gives detailed commentary on the essential subject matter that should be taught and adds clarification to the headings, Area of Study and Notes for Guidance in the specification. The Activities and Resources Section gives some indication of the sort of classroom and homework activities that candidates might undertake together with references to resources e.g. Business Studies - Hall, Jones and Raffo (HJR), The Times 100 and useful websites such as The WJEC acknowledges that whilst a scheme of work is an essential teaching aid it can be presented in many different styles and formats. Indeed a scheme of work is usually the creation of the practitioner and it is devised to meet a preferred teaching style, available resources and the nature of the students following the course. It is expected that teachers/lecturers will adapt and modify the scheme of work provided or they may choose to write it and present it in a totally different way. It would also be expected that references to the activities and the resources will need to evolve over time for a scheme of work is a living document that needs constant updating in this dynamic ever-changing subject.

12 GCE AS and A BUSINESS STUDIES Teachers' Guide 12 Autumn Term BS1 Week Number Topics to be covered Aims and objectives of private and public enterprises. Needs and wants. Opportunity cost. Goods and services. Global economy. Nature and role of marketing. Product v market orientation. Market research primary and secondary; quantitative and qualitative. Market segmentation, share, growth. Mass and niche marketing. Entrepreneur. HR: employment sectors, changing working patterns. Physical resources. Financial resources. Job, batch and flow production. Survival of small firms. Organic and external growth. Franchising. Horizontal and vertical integration. Internal and external economies and diseconomies of scale. Location. Aims and objectives of the private sector. Types of organisation. Business Plan. Aims and objectives of the public sector. Public goods and merit goods. Demand and supply. Market structures. Technological change. Exogenous shocks. Impact of change on stakeholder interests.

13 GCE AS and A BUSINESS STUDIES Teachers' Guide 13 Area of Study What is business? Scheme of Work for BS1 The Business Framework Week 1 In this specification a business is defined as any organisation that works to fulfil a common purpose An introduction to the aims and objectives of private and public enterprises. The nature of business activity: resources (the four factors of production); functions (different departments within a business); external influences (population trends, government, economic climate ) output (goods or services and waste). HJR Figure 1.1 page 1. Students to investigate a business of their choice and write it up. Difference between aims and objectives. Aims can be written in a mission statement examples. Objectives should be SMART (Specific, Measurable, Agreed, Realistic and Time-Specific). Objectives can be short-term or long-term and one can affect the other. Why UK businesses are often short-termist. The reasons why objectives are set. Investigate businesses aims and objectives using the internet or companies annual reports. The private sector tends to be made up of for-profit organisations (such as High Street shops and manufacturers), with some exceptions, such as charities (churches and the NSPCC, for example). Examples of objectives, e.g. survival, profit, growth, image, social responsibility. Identify some private and public sector organisations, differentiating between those that are for-profit and those that are not-forprofit. The public sector is mainly composed of not-for-profit organisations which aim to provide a service (such as the NHS and the BBC). Some public sector enterprises are free at the point of delivery (the Fire Service, for example), whereas others must be paid for (such as the Post Office). Many public sector enterprises are now being run on the lines of their private sector counterparts as they must be cost-efficient and provide the best service possible (as measured by league tables for schools, for example).

14 GCE AS and A BUSINESS STUDIES Teachers' Guide 14 Week 1 (cont.) Fulfilling Individual Needs and Wants Distinguish between needs and wants. Scarcity, choice and opportunity cost. People s needs are essential for living (these change over time and differ for different cultures and countries), whereas their wants are what they would like to have, but which are not essential. People s wants are unlimited. Discussion of what is a need in the UK in the 21 st century, compared with a less economically developed country. Also, what were needs in the UK 60 years ago, in the 1940s? Similar discussion with wants. The economic problem: unlimited wants + limited resources = scarcity. Discussion of what happens to price and quantity when there is scarcity. Scarcity leads to choices being made; opportunity cost is the cost of not choosing the next best alternative. (It must be emphasised that it is only the second best choice that is counted.) Students given three ways in which a firm could spend 200,000 (prioritised) and asked to discuss the opportunity cost of the decision to choose option 1. Week 2 Fulfilling Individual Needs and Wants Distinguish between goods and services. Goods physical items, services intangible items, products general term covering goods and services. Classify goods and services into consumer and producer goods and services. Provide examples of goods and services and break them down into those for consumers and those for producers noting that many overlap (often it is the quantity that will differ). Providing goods and services locally, nationally and internationally - the notion of the global economy. Opportunities and threats of the growing global economy for businesses. The importance of international trade and the rise of multinational companies. Debate amongst students on the pros and cons of globalisation. Case Study, e.g. What price coffee, HJR pages

15 GCE AS and A BUSINESS STUDIES Teachers' Guide 15 Area of Study Marketing Week 2 (cont.) Identifying and Anticipating Customer Needs and Wants What is marketing? It is more than just advertising; explanation of what it involves. All departments within a business play a role the marketing department must not act in isolation. Its role - linking a business to its customers. Visit a local store and look at the different types of marketing that are visible. Role of the various departments in the marketing of a new product. Week 3 Identifying and Anticipating Customer Needs and Wants Product orientation, market orientation and asset-led marketing. Differences, examples, advantages and disadvantages of the three types. Examples of the different types students to think of some and also show them pictures of different products which they must identify as being product or market orientated. How will being product or market orientated affect a firm s marketing? Introduce SWOT analysis could be used by firms undertaking asset-led marketing. What is market research? Definition and examples of how it is collected. Discussion of where the students have come across market research in their lives. The nature, purpose and importance/benefits of market research. The areas of research (e.g. consumers, competitors, new technology) and the uses to which the gathered data may be put (descriptive, explanatory, predictive, exploratory). Look at the results from a market research report, e.g. the Census of Desk and field research. (primary/secondary). Definitions and reasons for the use of desk and field research. Examples of how the data is collected and the benefits and drawbacks of the two types. Show questionnaires (field research); students to carry out desk research on a topic (e.g. incidence of obesity in teenagers and relevance to confectionary manufacturers).

16 GCE AS and A BUSINESS STUDIES Teachers' Guide 16 Week 3 (cont.) Identifying and Anticipating Customer Needs and Wants Distinguish between quantitative and qualitative research. Strengths and weaknesses of each. Quantitative numerical; qualitative motivations. How data can be collected; reasons for their use. Strengths and weaknesses (e.g. sample size, possible bias). Types of questions used for quantitative (closed) and qualitative (open) research. Methods of collection for each type (e.g. surveys for quantitative and focus groups for qualitative). Use of the two types by different firms. Case study, e.g. Supermarket Shoppers, HJR pages Week 4 Market Segmentation The methods of market segmentation. Definition. Methods: age, socio-economic, gender, location, religion, ethnicity These relate to the characteristics of the buyers, but increasingly segmentation is based on people s motives, e.g. why do people buy chocolate? As a reward, for a present, because they feel unhappy Look at segmentation by social class (HJR page 157). Choose a product in a supermarket (e.g. shampoo) and see how it is segmented. Compare this with the segmentation of, for example, greetings cards The reasons for market segmentation. Reasons such as: identifying requirements of different groups more precisely, meeting the needs of target groups more precisely than the competition, avoiding wasteful marketing that is not targeted and marketing a wider range of differentiated products. Consider how the marketing will change according to the needs of different groups (for a travel book for example), e.g. price, image, how it is sold. Market Share and Market Growth Measurement and importance of market share and market growth. Introduction to market analysis market size, share and growth. Formulae for calculating share and growth. Examples from businesses in different markets. Reasons for and benefits of the calculations. Use the internet to find out the size, share and growth of different markets. Mass versus niche marketing. Definitions, examples, advantages and disadvantages of each type. Identification of some niche markets and the attractiveness and drawbacks of them. Do the same for some mass markets.

17 GCE AS and A BUSINESS STUDIES Teachers' Guide 17 Area of Study Producing Goods and Services Week 5 Factor Inputs Functions of the entrepreneur - innovation/organisation and risk taking. Human resources: the rise and decline of employment sectors. Understanding of innovation, organisation (the four factors of production) and risk-taking. Current employment in the industrial sectors: primary (10%), secondary (20%), tertiary (70%) and the history behind these figures. The state of the secondary sector in the UK today. Study some contemporary entrepreneurs, e.g. Richard Branson (Virgin), Stelios Haji- Ioannou (easyjet), Sergey Brin and Larry Page (Google). What characteristics do they have? What has made them successful? Researching the changes in the number of employees in the three sectors during the past 50 years and the reasons for them. changing working patterns. Change from standard 9.00 a.m p.m. on a permanent contract to flexible working patterns such as flexitime, shift work, home working job sharing and sub-contracting. Core and periphery workers. Investigating firms to find out what forms of flexible working patterns they use and why. Physical Resources Land, raw materials, equipment, machinery, and vehicles. Greenfield and brownfield sites. Sustainable production, i.e. using renewable sources of raw materials and power. Capital (or producer) goods that are used to produce goods and services (equipment, machinery and vehicles). Capital-intensive and labour intensive processes and relative cost of capital goods and labour. Discussion of advantages and disadvantages of greenfield and brownfield sites. Finding methods of sustainable production and its relevance (social responsibility).

18 GCE AS and A BUSINESS STUDIES Teachers' Guide 18 Week 6 Financial Resources Features of various sources of internal and external funds available to business and their appropriateness for different circumstances. Examples of short, medium and long-term uses of finance. Internal sources: e.g. retained profit, squeezed out of working capital, sale of assets. External sources: e.g. short-term bank overdraft, trade credit, debt factoring e.g. medium-term leasing, hire purchase, bank loan e.g. long-term mortgage, venture capital, share capital Choosing the most appropriate form of finance for various situations, with a discussion of the reasons behind the choices. Methods of Production Job and batch. Flow/continuous production. Deciding how to produce: nature of the product, market size/level of expected demand, stage of development, variety of goods in the range, price. Week 7 Features of job, batch and flow production, with examples and advantages and disadvantages. Comparison of the three methods, using characteristics such as capital v labour intensive, flexibility, unit cost (economies of scale), quality, range of products. Scale of Production The survival of small firms. Definition of SME. Reasons for the rise in small businesses. Reasons why some firms choose to remain small and for the popularity of small firms. Identification of local small businesses and the length of time they have been in existence. Knowledge of local small firms that are no longer trading, with possible reasons why not. Organic and external growth. Reasons and benefits of growth. Definitions of organic and external growth, with reasons for their use. Look up examples of firms growing organically and externally and the outcomes. Franchising. Concept, definitions of franchisor and franchisee, advantages to each party, drawbacks to each party, factors affecting the choice of franchising. Examples of franchises and a discussion of why the owners might have chosen that form of organisation.

19 GCE AS and A BUSINESS STUDIES Teachers' Guide 19 Week 8 Scale of Production Horizontal and vertical integration. Differences between mergers and takeovers (hostile and friendly) and the reasons for them. Definition of horizontal, backward vertical and forward vertical integration. Examples of recent mergers and takeovers in the business world, with analysis of the effect on various stakeholders. Internal and external economies of scale and internal and external diseconomies of scale. Definitions of internal and external economies of scale with emphasis on the main differences between them and examples of them. Reasons for their occurrence. Reasons why diseconomies of scale can occur internally and externally. Calculation of unit cost as the scale of production increases knowledge of fixed and variable costs is required. Investigation of a particular example of external economies of scale, e.g. Silicon Valley. Diagrams of short and long-run average cost curves. Optimum output. See HJR page 589 for long-run average cost curve. Week 9 Location Factors affecting business decisions about location local, national and global Reasons why a business may need to make a decision about location. Factors affecting location, such as markets, competition, raw materials, services, transport links, image, cost of land, availability of labour and government/eu influence. Reasons for multi-national firms, advantages and disadvantages. Worksheet on the most appropriate location for various businesses. Optimisation of location. Relative importance of the factors affecting location decisions The need for compromise in some factors in order to choose the optimum location. Long-term nature of location decisions, although firms should reassess their location as appropriate - industrial inertia. Analysis of growing trend of locating call centres in India, for example.

20 GCE AS and A BUSINESS STUDIES Teachers' Guide 20 Area of Study Types of Business Organisation Week 9 (cont.) The Private Sector Aims and objectives such as survival, profit maximisation and market share. The private sector in the UK as part of a mixed market. Aims and objectives of private sector organisations for-profit and not-for-profit. Concept of privatisation and reasons for it. To determine the aims and objectives of different private sector enterprises. Identify industries that have been privatised in recent years and why. Week 10 The Private Sector Ownership and control of the following: sole traders, partnerships, private and public limited companies and social enterprises, e.g. workers' co-operatives. Appropriate structures relating to size, structure, ownership, organisation and control. Advantages and disadvantages of the various types of organisation. The purpose and main elements of a business plan. Definition of what a business plan is, what it should contain, its value (e.g. strengths, weaknesses, opportunities and threats are identified) and the drawbacks associated with it (e.g. becomes quickly out of date, so must be regularly updated). Draw up an outline of a business plan for a potential new enterprise in the local area. In addition, if possible, obtain a real business plan for discussion.

21 GCE AS and A BUSINESS STUDIES Teachers' Guide 21 Week 11 The Public Sector Aims and objectives. The public sector in the UK as part of a mixed market. Concept of a nationalised industry. Aims, for example, of providing services (frequently to meet needs for which some people might be unwilling to pay), which may or may not be free at the point of need, to avoid wasteful duplication of resources where a natural monopoly exists, to control strategic industries such as transport and to prevent exploitation by monopoly suppliers. Examples of private sector organisations and the reasons for their existence. The role of local and national government in providing public goods and merit goods. Definitions of public goods (e.g. defence) and merit goods (e.g. education and health) and the reasons for their provision by local and national government. Sources of finance for government expenditure. Case Study, e.g. Network Rail, HJR page 60.

22 GCE AS and A BUSINESS STUDIES Teachers' Guide 22 Area of Study External Influences Week 11 (cont.) Micro-economic Factors: the Market; Competition Factors affecting demand and supply. Definition of a market. Concept of demand and supply. Factors affecting demand (e.g. income, substitute and complementary goods, changes in taste and fashion, changes in population, advertising and legislation). Factors affecting supply (e.g. costs of production, changes in production, legislation, objectives of firms, expectations, the weather). Case Study, e.g. The price of oil, HJR page 684. Establishing equilibrium. Demand and supply curves and determination of equilibrium price/quantity. Drawing demand and supply curves for various situations, including the demand for and supply of labour. Changes in the conditions of demand and supply and their impact on equilibrium. Changes in demand and supply (i.e. shifts in the demand and supply curves) dues to factors such as an increase in general income levels or a decrease in available labour (and hence a rise in labour costs). Excess demand and excess supply. Situations where each of the curves shifts, to the right and left. Drawing the changes and explaining them fully which curve has shifted and why? What is the effect on price? What is the effect on quantity? Week 12 Micro-economic Factors: the Market; Competition Features of businesses operating in different market structures: monopoly, monopolistic competition, and oligopoly. Market structures vary according to, for example: the ease with which firms can set up and compete (barriers to entry), the number of firms operating, the extent to which rival products are different, the amount of control businesses exert within their markets and the extent to which individual business can determine the price of their goods and services. How the above characteristics relate to: monopoly, monopolistic competition and oligopoly. Identification of firms in the different markets and the advantages and disadvantages of them.

23 GCE AS and A BUSINESS STUDIES Teachers' Guide 23 Week 12 (cont.) Technological Change The impact on businesses and their customers of rapid technological change. Positive impacts: e.g. increased productivity, reducing waste, benefits to society (new products and processes), improvements in communication, acceptance of new technology. Negative impacts: e.g. resistance to change, cost of new technology, increasing research and development (the need to be one step ahead of the competition), customers expectations can exceed what is currently possible, increased price for customers, short product life cycle. Discussion of recent technological developments and their effect on businesses and customers. Case study, e.g. Technology Companies, HJR page 625. Week 13 Exogenous Shocks The impact of unforeseen events on business operations. Unforeseen events (or crises) might occur in aspects such as: financial, production, human resources, environmental, product, legal and image. Examples of recent crises such as foot and mouth (in 2001 and 2007), 9/11, and the floods in July 2007 and their effect on a variety of businesses, both negative and positive. Contingency plans are frequently drawn up to minimise the impact of a crisis. When deciding what to plan for, the following must be taken into account: likelihood of the event occurring, damage if it does occur, cost, opportunity cost. Analysis of what form of contingency planning a firm might undertake. Change The impact of change on stakeholder interests. Identification of stakeholders. Effects of change: e.g. shorter product life cycles, increased market research, increased research and development, retraining of staff. The effect of these, and other, forms of change on various stakeholders, such as employees, shareholders, customers, competitors and the local community.

24 GCE AS and A BUSINESS STUDIES Teachers' Guide 24 Spring and Summer Terms BS2 AS Scheme of Work Dates for New Specification Week Number Topics to be covered Product life cycle. Boston Matrix. Marketing mix (price and product) Marketing mix (place and promotion) Branding. Industrial marketing. International marketing. Budgeting. Cash flow forecasting. Profit and Loss Accounts. Balance Sheets. Break-even analysis. Workforce planning. Recruitment and selection. Training and appraisal. Financial and non-financial incentives. Motivation theories. Leadership styles. Organisational structures. Productivity. Capacity utilisation. Just-in-time and stock control. Purchasing. Quality; quality control and assurance. TQM. Benchmarking. Lean production. Technology. Research and development.

25 GCE AS and A BUSINESS STUDIES Teachers' Guide 25 Area of Study Marketing Scheme of Work for BS2 Business Functions Week 1 The Product Life Cycle Definition and different product life cycles. What it shows, the theory behind it, the five stages, the diagram showing cash flow (and profit if desired), alternative life cycles and examples of them (e.g. long introductory period or relaunch). Finding examples of alternative life cycles, such as wonderdrugs with virtually no introductory period and crazes that come and go, such as for skateboards. Extension strategies. Methods of prolonging a product s life cycle, e.g. new promotional techniques or targeting a different segment of the market. Students should be able to think of many extension strategies that they have come across, e.g. mobile phones with cameras. Uses of the product life cycle and its limitations. How the PLC can help in planning marketing strategies and altering marketing policies at different stages of the cycle. Limitations, such as backward-looking and can be self-fulfilling. Relationship with cash flow. It identifies points where sales should be growing and declining and the consequent changes in cash flow. Boston Matrix Nature, importance and limitations. Definition of product portfolio and product portfolio analysis. Boston Matrix diagram and meaning of star, question mark (or problem child), cow and dog, with examples of each. Uses, e.g. to assess if there is a balanced portfolio. Limitations of the Boston Matrix, e.g. products might be incorrectly placed. Connection to the product life cycle. Carry out a product portfolio analysis of a particular firm.

26 GCE AS and A BUSINESS STUDIES Teachers' Guide 26 Week 2 The Marketing Mix Development of strategies relating to price, product and packaging. The four ps. Price: factors affecting price. Pricing strategies such as penetration pricing, price skimming, competitive pricing, psychological pricing, predator pricing. Which pricing strategy should be used when. Students deciding which pricing strategy would be the most appropriate, giving a reason, for different situations, such as long-term profit growth. Product: types of product, e.g. durable and non-durable, convenience or speciality. Product differentiation and unique selling point. Factors affecting success of a product. Packaging its use and importance, product range. What makes one product more popular than another similar one? Which products have a unique selling point? How can packaging help to promote a product? Week 3 The Marketing Mix Development of strategies relating to place and promotion. Place: channels of distribution, wholesalers, agents, direct approach, store retailing. Factors affecting channels of distribution. Investigate different forms of intermediary and the effect that these have on the price and availability of products. Promotion: above the line indirect advertising using, for example, television, newspapers, radio and the Internet below the line direct mailing, exhibitions and trade fairs, sponsorship, sales promotions, merchandising, personal selling and public relations (the advantages and disadvantages of all of these). Students need to be able to fully evaluate different forms of promotion for varying situations. The impact of the internet. Increase in the use of the Internet for purchases advantages and problems. Sales on the Internet are increasing dramatically each year; to what extent will this form of distribution take over the role of the High Street?

27 GCE AS and A BUSINESS STUDIES Teachers' Guide 27 LESSSON CONTENT Week 4 Branding The nature and importance of branding Definition and reasons for its use, e.g. to add value. Brand awareness, brand reference and brand loyalty. What makes a brand? Why are people so brand conscious in this day and age? Industrial Marketing Methods of businessto-business sales and marketing. Definition of industrial marketing. Direct contact, use of sales representatives, trade fairs and exhibitions. Market analysis is based primarily on information from individual customers. Discussion of the role of sales representatives and the importance of them having a close relationship with the purchasing departments of firms. Comparison with consumer marketing. Comparisons such as: nature of buyer, number of buyers, contact with customers, distribution, importance of packaging and image, aftercare and flexibility. Compare the marketing of a crane with that of a family car, for example. International marketing The opportunities and difficulties that face businesses operating in the global market place. Mode of entry to international markets, sell the standard product v adapt it. Opportunities (e.g. economies of scale and to reduce dependence on the home market) and difficulties (e.g. language, cultural, currency and cost of adaptation). Background: investigate Apple s experience in Japan in the 1970s. Find out about international marketing mishaps, some connected with names and others with customs.

28 GCE AS and A BUSINESS STUDIES Teachers' Guide 28 Area of Study Accounting and Finance Week 5 Budgeting Understand the nature and purpose of budgets and their limitations. Explanation of what a budget is and why it is necessary. Sales revenue and expenditure budgets. Variances how they are calculated, taking care with those for sale revenue and profit. Zero budgeting. The process of creating a budget. Advantages and disadvantages of budgets. Introduction to budgeting by giving the students a budget for a holiday. How would they allocate the money? How is their actual expenditure likely to vary with that budgeted? How would they calculate the variances? Cash Flow Forecasting Complete and interpret simple cash flow forecasts. The benefits and limitations of using cash flow forecasts. Definition of cash flow (and the difference between cash flow and profit), reasons for cash flow forecasting, reasons for cash flow problems, factors leading to inaccurate forecasts. Construction of simple cash flow forecasts and interpretation of them, especially filling in missing values. It is very important that students understand that it is not possible to calculate profit from a cash flow forecast. There are many examples of cash flow forecasts in AS textbooks, some of which require students to draw up whole forecasts from a list of directions and others that require missing values to be filled in. Drawing up a cash flow forecast from scratch is a good way to ensure that the theory has been fully understood. Week 6 Profit and Loss Accounts Candidates are not expected to construct accounts or use ratio analysis. Understand the importance of the main items on a Profit and Loss Account of sole traders and partnerships. Interpret simple Profit and Loss Accounts What a profit and loss account is and what it is used for. Gross profit, net profit, operating profit, profit before tax, retained profit. Profit quality (high and low); extraordinary items. Relationship between the profit and loss account and balance sheet (the retained profit is added to reserves on the balance sheet). What to look for on a profit and loss account especially extraordinary items. Students to fill in blank figures in profit and loss accounts. It is easy to extract P&L accounts from recent companies annual reports, to make them relevant to students interests and to have them up-to-date. Students should be able to interpret a P&L account, taking into account the reasons for changes between the two years shown; the more practice the better.

29 GCE AS and A BUSINESS STUDIES Teachers' Guide 29 Week 6 cont. Balance Sheets Candidates are not expected to construct accounts or use ratio analysis. Understand the importance of the main items on a Balance Sheet of sole traders and partnerships. Interpret simple Balance Sheets. Assets (fixed and current) and liabilities (current and long-term); net current assets (working capital); assets employed and capital employed. The reason why two years figures are given note the order of the two years. Uses of balance sheets and their limitations (e.g. window dressing and historical data). What to look for on a balance sheet. As for P&L accounts, practice on filling in blanks on Balance Sheets and interpreting them is very important. Discussion of the value of a balance sheet to someone thinking of investing in a firm how reliable are the figures given? Week 7 Break-even Analysis Classify costs: fixed, variable and semivariable. Reasons for classifying costs. Definitions of fixed, variable and semivariable costs (including graphs for fixed and variable). Worksheet requiring students to classify a variety of costs. The nature and significance of contribution. Definition of contribution, formulae for calculating it, examples. Students must be aware that if a firm is making three different products, for example, if one product is withdrawn there will be no variable costs for it, but the other two products will have to cover the fixed costs that were being covered by the withdrawn product. Case Study, e.g. Kumas Kitchens, HJR page 285. Construction and interpretation of breakeven charts. Definition of break-even analysis and formula for calculating the breakeven point. Construction of break-even charts plotting total costs and sales revenue. Margin of safety. Advantages and disadvantages of break-even analysis. Questions and Case Study in HJR, pages 287 and 290. What-if analysis. The effect on the break-even point of changing parameters such as variable costs or sales revenue. The impact of changes in costs and revenue on the gross and net profit of businesses. What changes could occur to costs (costs of goods sold and operating expenses) and revenue and why. How this will affect gross and net profit. Using a profit and loss account, such as the one in HJR page 292 for Virginian Carpets Ltd, ask students for the effect on profit of various changes in costs and revenue.

30 GCE AS and A BUSINESS STUDIES Teachers' Guide 30 Area of Study People in Organisations Week 8 Human Resource Planning Workforce planning Definition, what it involves, why it is important, the benefits. There are a number of examples of workforce planning exercises undertaken by organisations (e.g. the NHS) on the Internet. Recruitment and selection. Internal v external recruitment. Job description, person specification, job advertisement. Methods of recruitment, methods of selection, the recruitment and selection process. Discrimination laws. Discussion of what is involved in interviews, psychometric tests and assessment centres. Students could work through a psychometric test. Week 9 Human Resource Planning Training and appraisal Different types of training, advantages and disadvantages of each method and of training in general. Methods of appraisal and reasons for it. Investigate the types of training offered by well-known firms and their policy on appraisal. Students assessments are a form of appraisal. Motivation Financial incentives Non-financial incentives Reasons for financial methods of motivation (linking with the relevant theorists). Types of financial incentives, such as piecework, bonuses, performance-related pay, fringe benefits, profit sharing and share ownership schemes. Advantages and disadvantages of each type. Reasons for non-financial methods of motivation (linking with the relevant theorists). Types of non-financial incentives, such as job rotation, job enrichment, empowerment and teamwork. Who should be rewarded? Why should they be recognised? When should this happen? What form should this take (financial or non-financial)? How should the scheme be administered? What type of person is going to be best motivated by money and which through non-financial means?