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Business Studies Y 13. Lesson Objectives. To learn about the impact of economies of scale on a business To learn that businesses have to have the appropriate scale and resource mix. Homework. 10.
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Lesson Objectives • To learn about the impact of economies of scale on a business • To learn that businesses have to have the appropriate scale and resource mix.
Homework • 10 http://www.telegraph.co.uk/finance/financetopics/profiles/8084101/Heinzs-Mr-Bean-has-big-ideas-in-the-can.html
Definition • The saving in cost of production that is due to the mass production(bulk buying) • supermarkets ,Tesco • Independent corner shop.
Video • Economies of scalehttp://www.bbc.co.uk/schools/gcsebitesize/business/production/productioncostsvid.shtml • (4) • Videohttp://news.bbc.co.uk/1/hi/business/7992136.stm • Freight (4)
Economies of scale can mean bigger is Cheaper • Internal economies of scale: • Technical • Specialisation • Purchasing • Financial • Marketing • Risk bearing • (10)
External economies of scale: • Geographical areas • Skilled Labour force • Good infrastructure
Its not all good news • Diseconomies of scale: • Poor motivation • Poor communication • Poor co-ordination • Poor leadership
Choosing the optimal mix of resources • Businesses need to have the Right mix of people machines and materials
Capital Intensive • A capital intensive business uses more machinery and relatively few workers • Eg. The car industry • Advantages: • Disadvantages • (card sort) • (10)
Labour Intensive • A labour firm uses more workers and less machinary. • Eg: NHS • Advantages • Disadvantages • (Card sort) • (10) http://www.tutor2u.net/blog/index.php/business-studies/comments/video-case-study-harris-tweed-prospers-through-innovation-and-international/
Questions • Q1 What are external economies of scale? • Q2 Describe three types of diseconomy of scale. • Q3 give two advantages of capital intensive production methods and two advantages of labour –intensive methods. • (10)
Exam Question AQA • Explain the different types of economy of a scale a business might benefit from if it takes over a rival firm. (10 marks) • (5)
Lawn mower Manufacture • Data Response Activity • (15)
Lesson 4 • To learn terminology linked to economy of scale. • To learn about the operational objectives linked to innovation
Economies of scale • Purchasing • Finance • Risk bearing • These are …….. Economies of scale
Exam Questions • Q1 What are external economies of scale? • Q2 Describe three types of diseconomy of scale. • Q3 give two advantages of capital intensive production methods and two advantages of labour –intensive methods. • (10) • (12 mins)
Innovation means… • Thinking of a new idea or bringing out a product that is different to what is already on the market. • Think of 3 new products in the last 3 years share with partner • (10 mins)
Research and Development • R & D comes up with the new ideas and has to turn them into products or processes..
Case Study • I Padhttp://www.fastcompany.com/1776369/video-how-steve-jobs-vision-inspired-a-decade-of-apple-innovation • Video Apple • http://socialtimes.com/remember-steve-jobs_b80493 • (20) research-Facts about Apple and its products
Innovation is risky • Many Failures for each success • Investment needed • Large profits possible for a new product • Good reputation follows • Some companies rely on having to compete by making new products • Some firms rely on copying others because of cost of R & D • (10)
Innovation affects other Departments • Finance-R&D is expensive-extra capital-production methods may need to change • Marketing-market research needs to be done on whether customers will want the new product-promotional activities will be required. • Human resources-staffing changes-reward programmes.
New Product DevelopmentSix Stages • Idea • Analysis and screening • Development • Value analysis • Test Marketing • Launch • (match sentence) • (10)
Questions • What is meant by research and development? • Give two reasons why R & D is risky • Give two ways that innovation can affect the marketing department • What is value analysis • (15) • Extension exercise 42
Lesson Objectives • To learn about the factors of location for business • To learn key terminology • To learn to apply factors of location to a real situation based on research • To learn key examples from business using seminar presentation
Homework • Explain why some firms think it is important to invest in research and development • Plenary • (5)
Factors of Location • What factors (reasons) do businesses need to consider when deciding where to locate or relocate their business. • Mind map in pairs • Mind map actual
Factors of location • Costs of renting renovating or buying premises • Skilled labour requirement –Training costs • Union Issues-Wage costs • Transport costs • Infrastructure • Quality of local workforce • Taxes • Near to source of supply • Near to customers • Resources/land /Climate • Laws and regulations • Social /environmental and ethical reasons • Quality of life
Two types of Factor • Quantitative Factors • Measured in Financial terms • Qualitative factors • Not measured in pure financial reasons • Pairs seminar -present
Quiz • http://www.tutor2u.net/business/quiz/startuplocation/quiz.html
Homework • Using the notes sheet provided.. • Prepare to talk about …. • Create powerpoint slides to support
Learning objectives • To learn about the factors of location for business • To learn key terminology • To learn to apply factors of location to a real situation based on research • To learn key examples from business using seminar presentation
Feedback • Economies of Scale • Internal • External
Investigate Switch Watches • Where should they locate and why • Plymouth • Newcastle • Barnsley
Seminar • Take a factor of location and report back
Exam Question • One of the major decisions a business can face is where to locate a new factory.What factors would be taken into consideration in the decision making process. 10 marks
Locating Abroad • Why Locate Abroad? • Cut Costs – How? • New International Markets • Avoid Trade Barriers • Improved Transport and Communications • Where do you locate in todays world? • Map the countries.
What are the issues of locating abroad? • Video • Write up