Business Theory

Businesses grow for a number of reasons including to take advantage of a gap in the market, gain a competitive advantage over rivals, and...

Before creating business plans or making decisions, it is important to 'scan' the external environment. This can be achieved through a PEST analysis, i.e....

Regulation means providing rules and frameworks for business and other activities. Some aspects of business activity are self-regulating - for example, the Advertising Standards...

Businesses operate in an external environment in which as well as competition from rivals businesses have to take into account legal, political, social and...

There are a number of laws that protect the customer against the actions of unscrupulous manufacturers and sellers. Particularly important are the Sale of Goods...

Globalisation is a result of the world becoming increasingly interconnected due to the hugely increased trade and cultural exchange. The biggest companies are no longer just...

Business accounts are produced to meet the needs of their users. Typical users and the use they make of accounts are shown below: Shareholders -to check...

There are a number of ways that businesses and individuals can make payments to others. Typical methods of making payments include cheque payments and...

An old proverb says 'he who fails to plan, plans to fail'. Although not originally quoted in a business context it certainly holds true....

Management accounting uses financial information in order to enable better decision-making within the organisation. The format and content of management accounts will depend on...

Banks provide a number of important financial services to business: Loans Provide businesses with expansion capital. A secured loan is one that is guaranteed by some...

A budget is a plan, which is set out in numbers. It sets out figures that an organisation like a company hopes to achieve...

The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted...

International marketing involves recognising that people all over the world have different needs. Companies like Gillette, Coca-Cola, United Airlines, BIC, Cadbury-Schweppes and Nissan have...

Organisations will often set up different structures to deal with different types of customer customers. This is because they will often give some groups...

Creating strategies that meet customer needs in the marketing mix, when marketing their products firms need to create a successful mix of: the right product sold...

The term demand refers to the quantity of a given product that consumers will be willing and able to buy at a given price....

A market consists of all the consumers who purchase a particular type of good or service. The market may be subdivided into separate segments...

When new products are needed to replace those coming to the end of their product life cycles in order to keep up with market changes,...

Customer service is the overall activity of identifying and satisfying customer needs. The term is used in three different ways: As a contrast to 'products'. Products...

The term factors of production relates to the key factors that go into making goods. It is common practice to break these down under...

Businesses hold stocks in a variety of forms: raw materialswork-in-progressfinished goodsconsumablesplant and machinery spares. The aim of stock control is to make sure that a business...

Control of business activity takes place at two levels - control from within the organisation and external control. Internal control Internal control involves the creation of...

The location of a business is where it is situated e.g. in Central London, Silicon Valley, etc. Where to locate a business is a...

Leadership goes beyond management. Management involves getting things done using the resources of the organisation, and the formal patterns and rules within the organisation....

Over time a body of law or legislation has developed governing employer/employee relations and the rights of employees and employers in the workplace. The Employment...

Directors, Managers and Supervisors all have responsibilities in the workplace as do grass root operatives. Directors are individuals with a legal responsibility to the...

Recruitment is the process of identifying that the organisation needs to employ someone up to the point at which application forms for the post...

An appraisal is a formal and informal process through which an employee is able to discuss their training and development needs with an appraiser....

Human resources are the people that work for an organisation, and Human Resource Management is concerned with how these people are managed. However, the...

Today we live in a global economy in which the time taken for people to move between continents has been significantly reduced and in...

Businesses can grow either organically i.e. through internal growth where profits are ploughed back into the business or through external growth such as through...

There is a range of legal structures associated with different forms of business: 1. Sole trader businesses are the easiest to set up because there...

Business activity is focused on the achievement of business aims and business objectives. A business aim is a goal a business wants to achieve. A...

Every organisation made up of more than one person will need some form of organisational structure. An organisational chart shows the way in which...

Business strategies are a way for companies to gain a competitive advantage over the market or business rivals. Competitive advantage can be considered in multiple...