Area of Study 2: How do businesses develop and perform?

		Foundation Level	General Level*	Credit Level*
2.1	How do businesses start?	•- need for enterprise • -identify needs • -buyers & sellers • -help – where to get it • -taking risks • -completing a simple business plan	• -the marketplace • -external information and advice • -identifying risk • -characteristics of factors of production • -preparing a simple business plan	• -researching the market • -calculating risk • -detailed business plan
2.2	How do businesses grow?	• -successful product/service • -expand sales • -takeovers/mergers	• -diversification • -innovation • -horizontal & vertical integration	• -research & development (product & market) • -reasons for growth
2.3	How do businesses survive?	• -need to plan • -saleable products/services • -covering costs	• -planning and controlling • -awareness of budgeting & cash flow • -using final accounts • -calculating and interpreting simple ratios	• -market research • -evaluation and comparison using final accounts and ratios
2 4	Why do businesses fail?	• -competition too fierce • -recession • -cash flow problems • -not moving with times	• -role of competitors • -simple analysis of final accounts	• -business cycle • -response to change • -externalities • -poor resource management
2 5	What is a successful business?	• -achieving objectives • -keeping owners satisfied • -success for business compared with charity	• -appreciation of differing aims of business in different sectors(public, private & voluntary)	• -identification of competing aims of stakeholders