Edexcel AS/A Level Business - Theme
3 Questions and Correct Answers.
Corporate objectives - Answer The objectives of a medium to large-sized business as a whole
Departmental and functional objectives - Answer The objectives of a department within a
business
Mission statement - Answer A brief statement, written by the business, describing its
purpose and objectives, designed to encapsulate its present operations
Objective (or goal) - Answer A target of or outcome for a business that allows it to achieve its
aims
SMART - Answer Acronym for the attributes of a good objective: Specific, Measurable,
Agreed, Realistic and Time Specific
Corporate strategy - Answer The plans and policies developed to meet a company's
objectives. It is concerned with what range of activities the business needs to undertake in
order to achieve its goals. It is also concerned with whether the size of the business organisation
makes it capable of achieving the objectives set.
Distinctive capability - Answer A form of competitive advantage that is sustainable because it
cannot easily be replicated by a competitor
Diversification - Answer Developing new products in new markets
Market development - Answer The marketing of existing products in new markets
Penetration - Answer Using tactics such as the marketing mix to increase the growth of
existing products in an existing market
Portfolio analysis - Answer A method of categorising all the products and services of a firm
(its portfolio) to decide where each fits within the strategic plans
Product development - Answer Marketing new or modified products in existing markets
, External audit - Answer An audit of the external environment in which as business finds
itself, such as the market within which it operates or government restrictions on its operations
Internal audit - Answer An analysis of the business itself and how it operates
SWOT analysis - Answer An analysis of the internal strengths and weaknesses of the business
and the opportunities and threats presented by its external environment
Trade association - Answer An organisation whose members are all involved in the same
industry or trade. The organisation pursues the interests of these businesses.
Monopoly - Answer A market dominated by a single business
Oligopoly - Answer A market dominated by a few large businesses
PESTLE analysis - Answer Analysis of the external political, economic, social, technological,
legal and environmental factors affecting a business
Diseconomies of scale - Answer Rising long-run average costs as a business expands beyond
its minimum efficient scale
Economies of scale - Answer The reductions in average costs enjoyed by a business as output
increases
External economies of scale - Answer The cost reductions available to all business as the
industry grows
Internal economies of scale - Answer The cost reductions enjoyed by a single business as it
grows
Minimum efficient scale - Answer The output that minimises long-run average costs
Backward vertical integration - Answer Joining with a business in the previous stage of
production
Forward vertical integration - Answer Joining with a business in the next stage of production
3 Questions and Correct Answers.
Corporate objectives - Answer The objectives of a medium to large-sized business as a whole
Departmental and functional objectives - Answer The objectives of a department within a
business
Mission statement - Answer A brief statement, written by the business, describing its
purpose and objectives, designed to encapsulate its present operations
Objective (or goal) - Answer A target of or outcome for a business that allows it to achieve its
aims
SMART - Answer Acronym for the attributes of a good objective: Specific, Measurable,
Agreed, Realistic and Time Specific
Corporate strategy - Answer The plans and policies developed to meet a company's
objectives. It is concerned with what range of activities the business needs to undertake in
order to achieve its goals. It is also concerned with whether the size of the business organisation
makes it capable of achieving the objectives set.
Distinctive capability - Answer A form of competitive advantage that is sustainable because it
cannot easily be replicated by a competitor
Diversification - Answer Developing new products in new markets
Market development - Answer The marketing of existing products in new markets
Penetration - Answer Using tactics such as the marketing mix to increase the growth of
existing products in an existing market
Portfolio analysis - Answer A method of categorising all the products and services of a firm
(its portfolio) to decide where each fits within the strategic plans
Product development - Answer Marketing new or modified products in existing markets
, External audit - Answer An audit of the external environment in which as business finds
itself, such as the market within which it operates or government restrictions on its operations
Internal audit - Answer An analysis of the business itself and how it operates
SWOT analysis - Answer An analysis of the internal strengths and weaknesses of the business
and the opportunities and threats presented by its external environment
Trade association - Answer An organisation whose members are all involved in the same
industry or trade. The organisation pursues the interests of these businesses.
Monopoly - Answer A market dominated by a single business
Oligopoly - Answer A market dominated by a few large businesses
PESTLE analysis - Answer Analysis of the external political, economic, social, technological,
legal and environmental factors affecting a business
Diseconomies of scale - Answer Rising long-run average costs as a business expands beyond
its minimum efficient scale
Economies of scale - Answer The reductions in average costs enjoyed by a business as output
increases
External economies of scale - Answer The cost reductions available to all business as the
industry grows
Internal economies of scale - Answer The cost reductions enjoyed by a single business as it
grows
Minimum efficient scale - Answer The output that minimises long-run average costs
Backward vertical integration - Answer Joining with a business in the previous stage of
production
Forward vertical integration - Answer Joining with a business in the next stage of production
