Cambridge IGCSE and O Level Business Studies Study and Revision Guide 3rd edition

377 Pages·2019·19.901 MB·English

by  Karen Borrington, Peter Stimpson

Cambridge
IGCSE® and O Level
Business
Studies
Fifth edition
Karen Borrington
Peter Stimpson
i
421233_FM_IGCSE_O_Lev_BS_5e_i-viii.indd 1 16/02/18 1:59 PM
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© Karen Borrington and Peter Stimpson 2018
First published in 1999 by
Hodder Education
An Hachette UK Company
Carmelite House, 50 Victoria Embankment, London EC4Y 0DZ
Second edition published 2002
Third edition published 2006
Fourth edition published 2013
This fifth edition published 2018
Impression number 5 4 3 2 1
Year 2022 2021 2020 2019 2018
All rights reserved. Apart from any use permitted under UK copyright law, no part of this publication may be
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Printed and bound in Slovenia
A catalogue record for this title is available from the British Library
ISBN 978 1 5104 2123 3
421233_FM_IGCSE_O_Lev_BS_5e_i-viii.indd 2 15/02/18 9:07 AM
Contents
Introduction iv
How to use this book iv
Exam preparation and technique vi
SECTION 1 Understanding business activity
1 Business activity 2
2 Classification of businesses 11
3 Enterprise, business growth and size 19
4 Types of business organisation 35
5 Business objectives and stakeholder objectives 51
Case study 61
SECTION 2 People in business
6 Motivating employees 63
7 Organisation and management 76
8 Recruitment, selection and training of employees 92
9 Internal and external communication 114
Case study 129
SECTION 3 Marketing
10 Marketing, competition and the customer 132
11 Market research 143
12 The marketing mix: product 158
13 The marketing mix: price 170
14 The marketing mix: place 178
15 The marketing mix: promotion 185
16 Technology and the marketing mix 197
17 Marketing strategy 203
Case study 212
SECTION 4 Operations management
18 Production of goods and services 214
19 Costs, scale of production and break-even analysis 228
20 Achieving quality production 241
21 Location decisions 248
Case study 262
SECTION 5 Financial information and financial decisions
22 Business finance: needs and sources 265
23 Cash flow forecasting and working capital 281
24 Income statements 293
25 Statement of financial position 303
26 Analysis of accounts 311
Case study 323
SECTION 6 External influences on business issues
27 Economic issues 326
28 Environmental and ethical issues 340
29 Business and the international economy 351
Case study 362
Index 364
Acknowledgements 368
421233_FM_IGCSE_O_Lev_BS_5e_i-viii.indd 3 29/01/18 9:25 PM
Introduction
This book has been written for all students of Cambridge IGCSE® and O Level
Business Studies. It carefully and precisely follows the syllabus from Cambridge
Assessment International Education. It provides the detail and guidance that are
needed to support you throughout the course and help you to prepare for your
examinations. It will also prove to be of great use to anyone who wants to learn
more about the key concepts of business.
This book will prove to be valuable to students of Business Studies whether
you are:
» studying the subject for the first time through your school or college and need
a comprehensive and clearly written textbook
» revising the subject before your examinations and need a study guide to help
you with key definitions, techniques and examination advice
» learning the subject on your own through distance or open learning and need a
complete programme of supportive questions, activities and suggested answers
to these.
Building on the successful formula of the previous four editions, this fifth edition
updates all existing chapters including removing material which is no longer in
the syllabus and adds new subject material with additional chapters and new
features.
How to use this book
To make your study of Business Studies as rewarding and successful as possible,
this Cambridge International endorsed textbook offers the following important
features:
Learning objectives
Each chapter starts with an outline of the subject material to be covered and
ends with a checklist to confirm what you should have learned and understood.
Organisation
The content is in the same order as the syllabus: chapter titles and chapter
section headings match those of the Cambridge IGCSE and O Level Business
Studies syllabuses.
Approach
The subject material is written in an informative yet lively way that allows for
complete understanding of each topic to be gained.
421233_FM_IGCSE_O_Lev_BS_5e_i-viii.indd 4 15/02/18 9:16 AM
1 Business activity Individual Business Government
International business in Definitions to learn
Holiday or car? Machine A or Machine B New road or new school? focus Definitions of the key words you need to
know are given, with terms highlighted
Case studies of businesses from
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REVISION SUMMARY The economic problemLand Labour Capital Enterprise How technology influences the marketing mix 7
Limited resources YeoI’nsternational business in focus Organisation and management
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tRoe raudn t Cheo scya Cseo rsntuerd ye fafibcoieven.t lLyi.st three other tasks that you think Bill has to do in order
Revision checklist 76
201
This checklist lists the key concepts and
topics you have covered in the chapter Activity
and the key points you’ll need to know
Numerous activities support your
for an exam.
learning and check your progress at
each important stage of every chapter.
Study tips Key info
Tips to help you make key points when Key info boxes provide further
answering questions. explanation of the key concepts you
need to know with real world examples.
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Case study E421233_x05_IGCSaE_O_Lev_mBS_5e_051-061.-indd 61style questions 29/01/18 8:17 PM Chapter review questions
Case studies based on a range of Further case study examination-style Examination-style questions at the
international businesses/examples put questions at the end of each group of end of each chapter allow you to
concepts into a real world context to chapters provide practice for a specific gain essential practice at answering
help you understand and think about section of the curriculum content. questions to the required standard.
how they work in practice
v
421233_FM_IGCSE_O_Lev_BS_5e_i-viii.indd 5 15/02/18 8:09 PM
Exam preparation and technique
Revision
You should be able to perform to the best of your ability if you:
» ensure that you have worked through all of the activities and examination-style
questions in this book
» revise thoroughly before the examination – allow plenty of time for this and
avoid leaving it until the last minute.
You can also help yourself greatly if you take the following steps.
» Obtain a copy of the syllabus. You should also be able to obtain past
examination papers and mark schemes. It is very important that you check the
progress of your learning and revision by ‘ticking off’ each topic against the
syllabus content.
» Make sure that you know the number and length of each of the examination
papers you will have to sit. The style and nature of the questions often differ
between papers so you must be quite clear about the type of questions likely
to appear on each paper.
For Cambridge IGCSE® and O Level Business Studies the examination papers are:
Length Type of paper Type of questions
Paper 1 1 hour 30 mins Data response Four data response questions based on
four different businesses. The questions are
structured a) to e)
Paper 2 1 hour 30 mins Case study Four structured questions (i.e. a) and b)) all
based on a case study
In the examination
Make sure you check the instructions on the question paper, the length of the
paper and the number of questions you have to answer. In the case of Cambridge
IGCSE® and O Level Business Studies examinations you will have to answer every
question as there will be no choice.
Allocate your time sensibly between each question. Every year, good students let
themselves down by spending too long on some questions and too little time (or no
time at all) on others. You will be expected to spend longer writing an answer to a
question worth 12 marks than you would when writing an answer worth 8 marks.
Remember that the most common ‘prompt’ words are ‘identify’, ‘explain’,
‘consider’ and ‘justify’. The following guide should help you.
Key command words you need to know
Define
This is asking you to clearly show the examiner that you know what a term
means. A single sentence answer is nearly always sufficient.
vi
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In the examination
Identify
As in ‘Identify two factors that could influence the price of a product.’ Identify
means write down, without explanation or discussion, the required number of
points.
So the answers to the question above might be:
1 Costs of production.
2 Prices of competitors’ products.
Calculate
As in ‘Using the figures provided, calculate the break-even level of production.’
This means ‘using the figures provided, work out the following’.
Explain
As in ‘Explain two ways in which the hotel could promote its services’.
Here the examiner is asking you to give more detail than just identifying
points. Your answer must also be applied to the business in question – in this case,
a hotel. So, advertising on TV would not be appropriate for one hotel given the
high cost of TV time. A better answer would be:
1 The hotel could contact all guests who have stayed at the hotel before by
email to give them details of a special offer.
2 The hotel could also use a colourful and effective website to promote its
services to customers who book hotel accommodation online.
Consider
As in ‘Consider whether the car manufacturer should reduce prices to increase
demand.’ This is asking you to show advanced skills. The best approach to answer
this type of question is to explain the advantages and disadvantages of reducing
car prices – using any case material about the business to help you. You should
then weigh up these advantages and disadvantages applied to a car manufacturer
and compare them before making a final conclusion.
Justify
As in ‘Recommend to TelCom the best way to expand – taking over a phone
manufacturer or a chain of shops selling mobile phones? Justify your answer/
recommendation.’
In questions like this you need to consider both options for expansion, giving
advantages and disadvantages for both. Finally, you should weigh up the points
for and against each option and come to a final decision based on the most
important points. For longer questions also justify why the alternative(s) was
rejected.
State
As in ‘State two examples of promotion for XYZ company.’ This question only
requires two examples to be given and no explanation is required.
Outline
As in ‘Outline two benefits to Jameel of operating his business as a sole trader.’
This is asking you to set out two benefits of operating as a sole trader and how
they relate to Jameel and his business.
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Finally...
Learning Business Studies should be both rewarding and challenging. We hope
that this textbook will help you overcome the challenges of the Cambridge IGCSE®
and O Level courses so that you can achieve the success you are seeking. In
particular, we want the book to encourage you to develop a real interest in –
even a passion for – finding out more of how the world of business really works.
Business activity is so crucial to the future wellbeing of us all and it offers great
opportunities for all well-motivated students. Success in Cambridge IGCSE® and O
Level Business Studies can help you take the first important steps towards playing
a leading role in managing and directing business activity in your country. We are
confident that this book will fully support you during your course.
Wishing you all the best in your studies,
Karen Borrington
Peter Stimpson
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SECTION 1
Understanding
business activity
Chapters
1 Business activity
2 Classification of businesses
3 Enterprise, business growth and size
4 Types of business organisation
5 Business objectives and stakeholder objectives
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