UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
22
Summary of unit
Learning aim Key content areas Recommended assessment approach
A Explore the features of different businesses and analyse what makes them successful
A1 Features of businesses A2 Stakeholders and their
influence A3 Effective business
communications
A report that examines the features of two contrasting businesses, looking at how each is organised, how their structures enable achievement of their aims and objectives and the relationship and communication with stakeholders.
B Investigate how businesses are organised
B1 Structure and organisation B2 Aims and objectives
C Examine the environment in which businesses operate
C1 External environment C2 Internal environment C3 Competitive environment C4 Situational analysis A report that examines the
effects of the internal and external environment on a large business and how the business has, and will, respond to changes.
D Examine business markets D1 Different market structure D2 Relationship between
demand, supply and price D3 Pricing and output
decisions
E Investigate the role and contribution of innovation and enterprise to business success
E1 Role of innovation and enterprise
E2 Benefits and risks associated with innovation
A presentation that investigates the use of enterprise and innovation in an existing business.
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
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Content
Learning aim A: Explore the features of different businesses and analyse what makes them successful
A1 Features of businesses • Ownership and liability: o private, e.g. sole trader, partnership, private limited company, public limited
company, cooperative, limited and unlimited liability o public, e.g. government department o not-for-profit, e.g. charitable trust, voluntary.
• Purposes, e.g. supply of products or services, difference between for-profit and not-for-profit businesses.
• Sectors: primary, secondary, tertiary, quaternary. • Scope of business activities: local, national, international. • Size: micro – up to nine staff, Small and Medium Enterprises (SMEs): small – between
10 and 49 staff, medium – between 50 and 249 staff; large: more than 250 staff. • Reasons for success: how these differ depending on the type of business (profit or
non-profit), and its aims and objectives, e.g. clarity of vision, innovative products or processes.
A2 Stakeholders and their influence • Stakeholders: o internal, e.g. managers, employees, owners o external, e.g. suppliers, lenders, competitors, debtors, creditors, customers,
government agencies and departments (local, national, international), communities (local, national, international), pressure groups, interest groups.
• The influence of stakeholders on business success, e.g. shareholder value; customers as long-term assets (strong customer service enables customer loyalty and retention); employee involvement, corporate social responsibility (community groups and interest groups).
A3 Effective business communications
Appropriate presentation and delivery of information to a given audience: • written presentations, e.g. financial, non-financial, formal and informal reports • oral presentations, e.g. computer projection/PowerPoint with speaker notes • importance of communication to aid business success, e.g. social media,
virtual communities.
Learning aim B: Investigate how businesses are organised
B1 Structure and organisation • Organisational structure, e.g. hierarchical, flat, matrix, holacratic. • Functional/operational areas, e.g. human resources, research and development,
sales, marketing, purchasing, production and quality, finance, customer service, IT, administration.
B2 Aims and objectives • Aims of businesses in different sectors – mission, vision and values: o private, e.g. making profits, profit maximisation, break-even, survival, growth,
market leadership o public, e.g. service provision, cost control, value for money, service quality,
meeting government standards o not-for-profit, e.g. education, housing, alleviating poverty, healthcare.
• SMART (Specific, Measurable, Achievable, Relevant, Time constrained) objectives.
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
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Learning aim C: Examine the environment in which businesses operate
C1 External environment • Political, e.g. government support, membership of trading communities such as the
European Union. • Economic, fiscal, monetary and other government policies, e.g. supply side policy,
economic growth, exchange rates. • Social attitudes to saving, spending and debt; social responsibility requirements;
change, e.g. to demographic trends, consumers’ tastes/preferences. • Technological change, e.g. automation, improved communications. • Environmental factors and ethical trends, e.g. carbon emissions, waste, recycling,
pollution. • Legal environment, e.g. partnership legislation, companies acts, charities legislation,
competition legislation, UK Corporate Governance Code, financial services regulation, industry regulators, government departments.
(Statutes and regulations current at the time of teaching should be used. Outline understanding only is expected.)
C2 Internal environment • Corporate culture. • Corporate social responsibility (CSR), ethics.
C3 Competitive environment • Competition (local, national and international). • Factors influencing competitive advantage, e.g. differentiation, pricing policies, market
leadership, reputation, market share, cost control, technology relationships with customers, suppliers, employees.
• Benefits and importance of establishing and maintaining a competitive advantage.
C4 Situational analysis • Assessment of the business environment using various techniques, e.g. PESTEL
(Political, Economic, Social, Technological, Legal, Environmental) analysis, SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, 5Cs (Company, Competitors, Customers, Collaborators, Climate) analysis, Porter’s Five Forces.
Learning aim D: Examine business markets
D1 Different market structures • Market structures: perfect competition, imperfect competition. • Features of different market structures: number of firms, freedom of entry,
nature of product.
D2 Relationship between demand, supply and price • Influences on demand, e.g. affordability, competition, availability of substitutes,
level of Gross Domestic Product (GDP), needs and aspirations of consumers. • Influences on supply, e.g. availability of raw materials and labour, logistics,
ability to produce profitably, competition for raw materials, government support. • Elasticity: price elasticity of demand.
D3 Pricing and output decisions • Impact on pricing and output decisions in different market structures. • Reponses by business to pricing and output decisions of competitors in different
market structures.
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
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Learning aim E: Investigate the role and contribution of innovation and enterprise to business success
E1 Role of innovation and enterprise • Innovation, e.g. creative process, product or service development, new ways of increasing
business efficiency or improving profitability, successfully exploiting a new idea, adding value to products, services or markets to differentiate the business from the competitors.
• Enterprise: identifying opportunities to develop business activities through, e.g. creative, lateral (approaching subjects from alternative perspectives) and ‘blue sky’ thinking (approaching subjects with no restrictions on perspectives); chance and serendipity, intuition.
E2 Benefits and risks associated with innovation and enterprise • Benefits: improvements to products, processes, services and customer experience,
business growth, development of new and niche markets, offering unique selling points, improved recognition and reputation, smarter working.
• Risks: failing to meet operational and commercial requirements, failing to achieve a return on investment, cultural problems (resistance to change, unsupportive systems and processes, insufficient support from leadership and management).
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
26
Assessment criteria
Pass Merit Distinction
Learning aim A: Explore the features of different businesses and what makes them successful
AB.D1 Evaluate the reasons for the success of two contrasting businesses, reflecting on evidence gathered.
A.P1 Explain the features of two contrasting businesses.
A.P2 Explain how two contrasting businesses are influenced by stakeholders.
A.M1 Assess the relationship and communication with stakeholders of two contrasting businesses using independent research.
Learning aim B: Investigate how businesses are organised
B.P3 Explore the organisation structures, aims and objectives of two contrasting businesses.
B.M2 Analyse how the structures of two contrasting businesses allow each to achieve its aims and objectives.
Learning aim C: Examine the environment in which businesses operate
C.D2 Evaluate the extent to which the business environment affects a given business, using a variety of situational analysis techniques.
D.D3 Evaluate how changes in the market have impacted on a given business and how this business may react to future changes.
C.P4 Discuss the internal, external and competitive environment on a given business.
C.P5 Select a variety of techniques to undertake a situational analysis of a given business.
C.M3 Assess the effects of the business environment on a given business.
Learning aim D: Examine business markets
D.P6 Explore how the market structure and influences on supply and demand affect the pricing and output decisions for a given business.
D.M4 Assess how a given business has responded to changes in the market.
Learning aim E: Investigate the role and contribution of innovation and enterprise to business success
E.D4 Justify the use of innovation and enterprise for a business in relation to its changing market and environment.
E.P7 Explore how innovation and enterprise contribute to the success of a business.
E.M5 Analyse how successful the use of innovation and enterprise has been for a given business.
