INTERNATIONAL

ADVANCED LEVEL
Business Studies

SPECIFICATION
Pearson Edexcel International Advanced Subsidiary in Business Studies (XBS01)
Pearson Edexcel International Advanced Level in Business Studies (YBS01)
For first teaching in September 2013
First examination January 2014
INTERNATIONAL
ADVANCED LEVEL
Business Studies

SPECIFICATION
Pearson Edexcel International Advanced Subsidiary in Business Studies (XBS01)
Pearson Edexcel International Advanced Level in Business Studies (YBS01)
For first teaching in September 2013
First examination January 2014
Acknowledgements
This specification has been produced by Pearson on the basis of consultation with
teachers, examiners, consultants and other interested parties. Pearson would like
to thank all those who contributed their time and expertise to the specifications
development.

References to third-party material made in this specification are made in good faith.
We do not endorse, approve or accept responsibility for the content of materials, which
may be subject to change, or any opinions expressed therein. (Material may include
textbooks, journals, magazines and other publications and websites.)

ISBN: 9781446908303
All the material in this publication is copyright
Pearson Education Limited 2013
About this specification
Pearson Edexcel International Advanced Level in Business Studies is designed for use in schools and colleges outside
the United Kingdom. It is part of a suite of International Advanced Level qualifications offered by Pearson.
This qualification has been approved by Pearson Education Limited as meeting the criteria for Pearsons Self
Regulated Framework.
Pearsons Self Regulated Framework is designed for qualifications that have been customised to meet the needs
of a particular range of learners and stakeholders. These qualifications are not accredited or regulated by any UK
regulatory body.
Structure: modular structure comprising four equally weighted units.
Content:: up-to-date content which is engaging and relevant to international students.
Content
Assessment: 100% external assessment, with January and June assessment opportunities.
Approach: encourages wider reading on current issues, using real-life examples.

Specification updates
This specification is Issue 1 and is valid for the Pearson Edexcel International Advanced Subsidiary and International
Advanced Level examination from 2014. If there are any significant changes to the specification Pearson will write to
centres to let them know. Changes will also be posted on our website.
For more information please visit www.edexcel.com/IAL

Using this specification

This specification has been designed to give guidance to teachers and encourage effective delivery of the
qualification. The following information will help you get the most out of the content and guidance.
Compulsory content: as a minimum, all the bullet points in the content must be taught. The word including in unit
content specifies the detail of what must be covered.
Examples: throughout the unit content, we have included examples of what could be covered or what might
support teaching and learning. It is important to note that examples are for illustrative purposes only and centres can
use other examples. We have included examples that are easily understood and recognised by international centres.
Unit assessments use a range of material and are not limited to the examples given. Teachers should deliver the
qualification using a good range of examples to support the assessment of the unit content.
Students need to demonstrate knowledge of technical language where required.
Depth and breadth of content: teachers should prepare students to respond to assessment questions. Teachers
should use the full range of content and all the assessment objectives given in Section B: Specification overview.

Qualification abbreviations
International Advanced Level IAL
International Advanced Subsidiary IAS
International Advanced Level 2 (the additional content required for an IAL) IA2

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Contents

A Specification at a glance 4

Unit overview 4

B Specification overview 7

Summary of assessment requirements 7

Assessment objectives and weightings 8

Relationship of assessment objectives to units 8

Qualification summary 9
Aims 9
IAS/IA2 knowledge and understanding 9
IAS/IA2 skills 10

C Busines Studies unit content 11

Course structure 12

Unit 1 Business Enterprise 13

Unit 2 Business Structures and Processes 21

Unit 3 Strategic Business Decisions 27

Unit 4 Business in a Global Context 35

D Assessment and additional information 43

Assessment information 43
Assessment requirements 43
Entering candidates for the examinations for this qualification 43
Resitting of units 43
Awarding and reporting 43
Performance descriptions 43
Unit results 44
Qualification results 44
Language of assessment 44

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Contents

Additional information 45
Malpractice 45
Access arrangements and special requirements 45
Equality Act 2010 45
Prior learning and progression 45
Combinations of entry 45
Student recruitment 45

E Support, training and resources 47

Support 47

Training 47

Resources 48

Specifications, Sample Assessment Materials and Teacher Support Materials 48

F Appendices 49

Appendix 1 Performance descriptions 51

Introduction 51
IAS performance descriptors for Business Studies 52
IA2 performance descriptors for Business Studies 53

Appendix 2 Codes 55

Appendix 3 Glossary of International Accounting Standards (IAS) terminology 57

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 A Specification at a glance
Unit overview
IAS Unit 1: Business Enterprise *Unit code WBS01
Externally assessed 50% of the 25% of the
total IAS marks total IAL marks
Availability: January and June
First assessment: January 2014
Content summary
This unit provides an introduction to business practice, the importance of the market and how businesses interact
with customers and competitors. Students will learn about the role of the entrepreneur, market research techniques,
the importance and use of finance, break-even analysis and how to measure and analyse business performance. They
will also consider how the wider economic environment and stakeholders may affect businesses, large and small.
Assessment
Examination of 1 hour and 30 minutes, consisting of supported multiple-choice questions and questions based on
data.

IAS Unit 2: Business Structures and Processes *Unit code WBS02

Externally assessed 50% of the 25% of the
total IAS marks total IAL marks
Availability: January and June
First assessment: January 2014
Content summary
This unit covers the key functional areas of a business. Students will develop their understanding of how businesses
relate to their customers and analyse change in their markets. The unit introduces students to business operations
and develops their understanding of finance and why businesses may fail. Students will also consider how businesses
manage their people effectively.
Assessment
Examination of 1 hour and 30 minutes, consisting of supported multiple-choice questions and questions based on
data.

* See Appendix 2 for description of this code and all other codes relevant to this qualification.

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 Specification at a glance A

IA2 Unit 3: Strategic Business Decisions *Unit code WBS03

Externally assessed 50% of the 25% of the
total IA2 marks total IAL marks
Availability: January and June
First assessment: January 2014
Content summary
This unit develops the content of Unit 2 and examines the competitiveness of businesses through performance and
non-performance indicators. Students will analyse corporate objectives and strategy on the basis of these indicators
and on external influences to businesses. Students will assess the causes and effects of change on businesses and
examine how companies can manage risk and grow effectively.
Assessment
Examination of 2 hours, consisting of questions based on data, including extended response questions.

IA2 Unit 4: Business in a Global Context *Unit code WBS04

Externally assessed 50% of the 25% of the
total IA2 marks total IAL marks
Availability: January and June
First assessment: January 2014
Content summary
This synoptic unit focuses on the world of international business, and considers change and growth in global
economies. Students will examine the different factors businesses have to consider when operating in a global market.
Students will also assess the impact of multinational corporations on the global economy.
Assessment
Examination of 2 hours, consisting of questions based on data, including extended response questions.

* See Appendix 2 for description of this code and all other codes relevant to this qualification.

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 A Specification at a glance

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 B Specification overview

Summary of assessment requirements

Unit number and unit Level Assessment information Number of
title raw marks
allocated in
the unit
Unit 1: Business Enterprise IAS Examination length: 1 hour and 30 minutes 80
Examination paper in two sections:
Section A
Supported multiple-choice questions. Worth 24 marks.

Section B
Questions based on data. Worth 56 marks.
Unit 2: Business Structures IAS Examination length: 1 hour and 30 minutes 80
and Processes
Examination paper in two sections:
Section A
Supported multiple-choice questions. Worth 24 marks.

Section B
Questions based on data. Worth 56 marks.
Unit 3: Strategic Business IA2 Examination length: 2 hours 80
Decisions
Examination paper in two sections:
Section A
Questions based on data. Worth 40 marks.

Section B
Questions based on data. Worth 40 marks.
The case studies for Section A and B will have a linked
context.
Unit 4: Business in a Global IA2 Examination length: 2 hours 80
Context
Examination paper in two sections:
Section A
Questions based on data. Worth 40 marks.

Section B
Questions based on data. Worth 40 marks.
The case studies for Sections A and B will not be linked.

Note: Data represents passages of text based on a real business example, which may include graphs, tables of
information and/or diagrams.

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 B Specification overview

Assessment objectives and weightings

% in IAS % in IA2 % in IAL

AO1 Demonstrate knowledge and understanding of the 25% 20% 22.5%

specified content.
AO2 Apply knowledge and understanding of the specified 25% 20% 22.5%
content to problems and issues arising from both familiar
and unfamiliar situations.
AO3 Analyse problems, issues and situations. 25% 30% 27.5%

AO4 Evaluate, distinguish between and assess appropriateness of 25% 30% 27.5%
fact and opinion, and judge information from a variety of
sources.

Relationship of assessment objectives to units

Unit number Assessment objective
AO1 AO2 AO3 AO4
Unit 1 25% 25% 25% 25%
Unit 2 25% 25% 25% 25%
IAS weighting 25% 25% 25% 25%
Unit 3 20% 20% 30% 30%
Unit 4 20% 20% 30% 30%
IA2 weighting 20% 20% 30% 30%
Total for IAL 22.5% 22.5% 27.5% 27.5%

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 Specification overview B

Qualification summary
Aims

The aims of the International Advanced Level qualifications in Business Studies

are to enable students to:

develop an interest in and enthusiasm for the study of business

gain a holistic understanding of business
develop a critical understanding of organisations and their ability to meet
societys needs and wants
understand that business behaviour can be studied from a range of
perspectives
generate relevant solutions to business problems and issues
beaware of the ethical dilemmas and responsibilities faced by organisations
and individuals
acquire a range of relevant business and generic skills, including decision-
making, problem solving, the challenging of assumptions and the
quantification and management of information.

IAS/IA2 knowledge and understanding

These International Advanced Level qualifications in Business Studies require

students to:

investigate different types of businesses that develop and sell products and/or
services in a local, national or international marketplace. At IA2 level, students
will study the ways in which companies make decisions, and grow and
operate in the global market place
be able to analyse numerical information and understand how it assists the
decision-making process of a business
understand how a business is managed, how its performance is analysed and
how it could trade internationally.

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 B Specification overview

IAS/IA2 skills

These International Advanced Level qualifications in Business Studies require

students to use both qualitative and quantitative methods to make justifiable
decisions.

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C Busines Studies unit content

Unit 1 Business Enterprise 13

Unit 2 Business Structures and Processes 21

Unit 3 Strategic Business Decisions 27

Unit 4 Business in a Global Context 35

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 C Business Studies unit content

Course structure

The Pearson Edexcel International Advanced Level in Business Studies

comprises four units and contains an International Advanced Subsidiary subset
of two IAS units.
The Pearson Edexcel International Advanced Subsidiary in Business Studies is
the first half of the International Advanced Level course and consists of Units
1 and 2. It may be awarded as a discrete qualification or contribute 50 per cent
of the total International Advanced Level marks.
The full International Advanced Level award consists of the two IAS units
(Units 1 and 2), plus two IA2 units (Units3 and4) which make up the other
50 per cent of the International Advanced Level. Students wishing to take the
full International Advanced Level must, therefore, complete all four units.
The structure of this qualification allows teachers to construct a course of
study that can be taught and assessed either as:
uu distinctmodules of teaching and learning with related units of assessment
taken at appropriate stages during the course; or
uu a linear course which is assessed in its entirety at the end.

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Unit 1 IAS/IA2
Business Enterprise
compulsory unit Externally assessed

1.1 Unit description

About this unit This unit provides an introduction to business practice, the importance of the
market and how businesses interact with customers and competitors. Students
will learn about the role of the entrepreneur, market research techniques, the
importance and use of finance, break-even analysis and how to measure and
analyse business performance. They will also consider how the wider economic
environment and stakeholders may affect businesses, large and small.

Students are also expected to:

carry out calculations

interpret or use data from graphs, tables or diagrams.

Note: Data represents passages of text which may include graphs, table(s) of
information or diagrams.

1.2 Assessment information

Examination length: 1 hour and 30 minutes

Examination paper in two sections:

Section A: supported multiple-choice questions 24 marks.
Section B: questions based on data 56 marks.

Total for paper: 80 marks.

Students may use a calculator.

The quality of written communication will be assessed in the context of this unit
through the 14 mark data response question in Section B of the paper. When
answering this question students should consider the structure, coherence,
punctuation and grammar of their responses.

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 Unit 1 Business Enterprise

1.3 Unit content

1.3.1 Entrepreneurship

What students need to learn:

1 Characteristics Individual characteristics, including takes initiative, hard-working, resilient,
creative, self-confident, risk-taking, effective communicator.

2 Motivations Reasons why people set up businesses, including:

uu profit as a motive, e.g. profit maximisers, profit satisficers
uu other motives, e.g. ethical stance, social entrepreneurship.

3 Role The initial idea.

Creating and setting up a business.
Running a business.
Expanding a business.
Innovation within a business.

4 Company Different ways of structuring a business, including:

structures
uu sole trader
uu partnership

uu private limited company

uu public limited company
uu co-operative.

Other forms of business organisation, including franchises.

5 Stakeholders Definition:any person or organisation that has an interest in the outcome of a

business decision/action.
Internal stakeholders, e.g. employees, owners/shareholders.
External stakeholders, e.g. suppliers, customers.

6 Opportunity cost Choices and potential trade-offs.

Impact on decision-making.
Effects on stakeholders.

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 Business Enterprise Unit 1

1.3.2 Researching a business opportunity

What students need to learn:

1 Market research Product and market orientation.
Primary and secondary market research (quantitative and qualitative), used to
quantify demand and gain insight into consumer behaviour.
Use of ICT to support market research, including websites, social networking,
databases.
Sampling: size, methods, potential bias.
Market segmentation, e.g. gender, age.

2 The market Definition: any medium in which buyers and sellers interact and agree to trade
at a price, e.g. virtual, face-to-face.
Market size and characteristics, e.g. a mass market, a niche market.
Competition from existing businesses, e.g. differentiation.

3 Positioning Market mapping.

Competitive advantage of product or service.
Adding value.

4 Product trial Customer trialling to encourage purchases, e.g. free samples, tasting.
Test marketing of a product to assess likely demand levels.

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 Unit 1 Business Enterprise

1.3.3 Supply and demand

What students need to learn:

1 Demand The relationship between price and demand.
Non-price factors affecting demand, including tastes and fashions, income,
price of substitutes and complements, demographics, seasonality, external
shocks.

2 Supply The relationship between price and supply.

Non-price factors affecting supply, including changes in costs, technological
change, climate/weather, external shocks, taxes and subsidies.

3 Interaction How changes in demand might impact on supply.

of supply and
How changes in supply might impact on demand.
demand

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 Business Enterprise Unit 1

1.3.4 Finance

What students need to learn:

1 Sources of finance Internal sources: retained profit, sale of assets.
External sources: loans, debentures, venture capital, ordinary share capital,
overdrafts, leasing, trade credit.
Alternative sources, e.g. business angels and venture capitalists, peer-to-peer.
Secured and unsecured loans and the cost of borrowing.
Sources of finance appropriate for company structure.
Implications of limited and unlimited liability.
Relevance of a business plan in obtaining finance.

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 Unit 1 Business Enterprise

1.3.5 Measuring business performance

What students need to learn:

1 Pricing, sales Pricingstrategies, including cost-plus, competitive, skimming, penetration,
revenue, coasts psychological, destroyer/predatory, premium.
and profit
Sales revenue, fixed and variable costs.
Calculation of profit/loss.

2 Break-even Contribution (selling price minus variable cost per unit).

Break-even point (total fixed costs + total variable costs = total sales revenue).
Using contribution to calculate break-even point.
Margin of safety.

3 Measuring and Gross profit.

improving profit
Profit for the year.
Calculation of gross profit margin and profit for the year margin.
How a business might improve profitability.

4 Importance of Distinction between profit and cash flow.

cash flow
How to construct simple cash flow forecast.
Use of a cash flow forecast to manage finances.

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 Business Enterprise Unit 1

1.3.6 The wider business environment

What students need to learn:

1 Government Impact on businesses of government policy, e.g. taxation, spending levels.
influences
Impacton businesses of government legislation, e.g. health and safety,
minimum wages.
Government support for businesses, e.g. grants, subsidies.
Government protection of businesses, e.g. trademarks, patents.
Consumer protection legislation, e.g. product safety, product labelling.

2 Economic Impact on businesses of unemployment, e.g. effect on demand, job

influences recruitment.
Impact on businesses of exchange rates, e.g. exporters, importers.
Impact on businesses of inflation, e.g. cost of supplies, competitiveness.

3 Social influences Impact

on businesses of the digital economy, e.g. ecommerce,
communications.
Impact on businesses of ethical considerations, e.g. Fair Trade, child labour.
Impacton businesses of environmental considerations, e.g. the circular
economy, climate change.
Impact on businesses of demographic change, e.g. an ageing population,
migration.

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Unit 1 Business Enterprise

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Unit 2 Business Structures and Processes
IAS/IA2 compulsory unit Externally assessed

2.1 Unit description

About this unit This unit covers the key functional areas of a business. Students will develop
their understanding of how businesses relate to their customers and analyse
change in their markets. The unit introduces students to business operations and
develops their understanding of finance and why businesses may fail. Students
will also consider how businesses manage their people effectively.

Students are also expected to:

carry out calculations

interpret or use data from graphs, tables or diagrams.

Note: Data represents passages of text which may include graphs, table(s) of
information or diagrams.

2.2 Assessment information

Examination length: 1 hour and 30 minutes.

Examination paper in two sections:

Section A: supported multiple-choice questions 24 marks.
Section B: questions based on data 56 marks.

Total for paper: 80 marks.

Students may use a calculator.

The quality of written communication will be assessed in the context of this unit
through the 14 mark data response question in Section B of the paper. When
answering this question students should consider the structure, coherence,
punctuation and grammar of their responses.

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 Unit 2 Business Structures and Processes

2.3 Unit content

2.3.1 Marketing

What students need to learn:

1 Marketing Definitionof marketing: the management process responsible for sales
objectives and promotion and for identifying, anticipating and satisfying customer
strategy requirements profitably.
Marketing objectives based on market research, sales or profit forecasts, e.g.
increased sales, build a brand image.
Marketing strategies appropriate for different types of market, e.g. niche
markets, mass markets.

2 Marketing mix Components of the marketing mix: product, price, promotion, place (4Ps).
Identification of a marketing mix which meets the needs of a product or
service.
Product life cycle and product extension strategies.
Boston matrix and the product portfolio.
How current social trends may affect the composition of the marketing mix:
uu product, e.g. use of recycled materials, ethical sourcing
uu price, e.g. online sales, price comparison sites
uu promotion, e.g. viral marketing, social media
uu place, e.g. cloud, online distribution.

3 Price elasticity of Effect on businesses of price changes.

demand (PED)
Calculation and interpretation of PED.
Effects on total revenue.
Implications for pricing strategies.

4 Income elasticity Normal and inferior goods.

of demand (YED)
Effect on businesses of changes in income.
Calculation and interpretation of YED.
Implications for businesses.

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 Business Structures and Processes Unit 2

2.3.2 Managing operations

What students need to learn:

1 Productivity and Definition of productivity: output per unit of input.
efficiency
Factorsinfluencing productivity, including physical capital, technology, process
innovation, human capital, organising resources, access to finance.
Distinction between labour and capital intensive production.
Definition of efficiency: organising production so that waste is minimised and
costs are the lowest possible.
Factors influencing efficiency, including location of production, quality and
availability of labour, labour turnover.

2 Product or service The design mix (function, aesthetics, economic manufacture).

design
Changes in the elements of the design mix to reflect social and economic
trends, e.g. changes in type of materials and technology used in design to
minimise waste, resource depletion.

3 Capacity Calculating capacity utilisation:

utilisation (current output/maximum possible output) x 100.
Implications of under- and over-utilisation of capacity.
Ways of improving capacity utilisation.

4 Inventory control Inventory control graphs.

Implications of poor inventory control, e.g. cash tied up in inventory, loss of
production.

5 Lean production Just in time (JIT) management of inventory.

and quality
Competitive advantage of short product development lead times.
management
Minimising waste of resources.
Quality management techniques, including quality assurance and quality
control.
TotalQuality Management (TQM) as part of company culture, e.g.
continuous improvement (Kaizen), quality circles.

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 Unit 2 Business Structures and Processes

2.3.3 Managing finance

What students need to learn:

1 Budgets Types of budget, e.g. sales budget, production budget.
Purpose of budgets.
Historical-based budgeting.
Zero-based budgeting.
Variance analysis.

2 Sales forecast Purpose of sales forecasts.

Difficulties of estimation.
Factors
affecting sales forecasts, e.g. economic variables, actions of
competitors.

3 Managing Importance of working capital.

working capital
Managing potential cash shortfalls.
Managing customer and supplier credit terms and payments, including timing
of payments.
Holding appropriate levels of inventory.
Contingency finance planning, including overdrafts, loans, factoring,
introduction of extra cash into the business by the owner/shareholders.

4 Why businesses Differences between cash and profit.

fail
Importance of cash in the short run and profit in the long run.
Reasons why businesses fail, including poor management of cash flow,
overestimation of sales, poor inventory control, changing market conditions,
attitude of lenders to releasing funds, overtrading.

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 Business Structures and Processes Unit 2

2.3.4 Managing people

What students need to learn:

1 Organisational Hierarchy.
structures
Types of structure, including tall, flat, matrix.
Chain of command.
Span of control.
Decentralisation and centralisation.
How organisational structures affect the ability to manage businesses
effectively.

2 Recruitment, Planning staffing requirements accurately.

selection and
Internal against external recruitment.
training
Recruitment and selection process.
Costs of recruitment, selection and training.
Types of training, including induction, on-the-job, off-the-job.

3 Leadership styles Types of leadership style, including autocratic, paternalistic, democratic,

laissez-faire.
McGregors Theory X and Theory Y.

4 Motivation of Motivation theorists (Taylor, Mayo, Maslow, Herzberg).

staff
Financial
incentives to improve staff performance including piecework,
commission, bonus, profit share, performance related pay.
Non-financial techniques to improve staff performance, including delegation,
consultation, empowerment, team working, flexible working, job enrichment,
job rotation.

5 Reduction of Flexible employment, e.g. part-time, flexible hours.

labour costs
Flexible working, e.g. multi-skilled workforce, responding to change.
Reducing staff costs, e.g. dismissal, redundancy.

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Unit 2 Business Structures and Processes

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Unit 3 Strategic Business Decisions
IA2 compulsory unit Externally assessed

3.1 Unit description

About this unit This unit develops the content of Unit 2 and examines the competitiveness of
businesses through performance and non-performance indicators. Students will
analyse corporate objectives and strategy on the basis of these indicators and on
external influences to businesses. Students will assess the causes and effects of
change on businesses and examine how companies can manage risk and grow
effectively.

Students are also expected to:

carry out calculations

interpret or use data from graphs, tables or diagrams.

Note: Data represents passages of text which may include graphs, table(s) of
information or diagrams.

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 Unit 3 Strategic Business Decisions

3.2 Assessment information

Examination length: 2 hours.

Examination paper in two sections:

Section A: questions based on data 40 marks.
Section B: extended response questions based on data 40 marks.

Total for paper: 80 marks.

Students may use a calculator.

Synoptic assessment in the context of this unit requires students to:

understand the inter-relatedness of many business issues and problems

understand how certain concepts, theories and techniques may be relevant to
a range of different contexts
apply such concepts, theories and techniques in analysing business issues and
problems and in evaluating arguments and evidence.

The emphasis will be on students ability to use business concepts, theories and
techniques that they have built up during their course of study. The assessment
of this unit may draw on material from Units 1 and 2, enabling synoptic
assessment.

The quality of written communication will be assessed in the context of this unit
through the 12 mark data response question in Section A and both the 20 mark
questions in Section B of the paper. When answering these questions students
should consider the structure, coherence, punctuation and grammar of their
responses.

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 Strategic Business Decisions Unit 3

3.3 Unit content

3.3.1 Corporate objectives and strategy

What students need to learn:

1 Corporate Corporate aims.
objectives
Mission statements.
Corporate objectives.

2 Stakeholder Stakeholder objectives.

influences
Stakeholder conflicts.
on corporate
objectives Impact of conflicting and common aims between different groups of
stakeholders.
Corporatesocial responsibility (CSR) and potential conflicts between profit-
based and other objectives.

3 Corporate culture Definitionof corporate culture: the set of important assumptions that are
shared by people working in a particular business and influence the ways in
which decisions are taken.
Classification
of corporate cultures, including power, role, task, person cultures
(Charles Handy).
Factors
influencing the formation of corporate culture, e.g. owner aspirations,
customer demand.
Characteristics of strong corporate cultures, e.g. staff loyalty, high staff
motivation.
Characteristicsof weak corporate cultures, e.g. poor retention of skilled staff,
staff do not support objectives.
Difficulties in changing an established corporate culture.

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Unit 3 Strategic Business Decisions

4 Corporate Corporate strategy, e.g. market entry or exit, mergers and takeovers.
strategy
Portfolio analysis, including Boston matrix.
Achieving competitive advantage through distinctive capabilities, e.g. brand
image, customer loyalty.
Porters strategic matrix (cost leadership, differentiation, cost focus,
differentiation focus).
Impact of strategic and tactical decisions on human, physical and financial
resources.
Strategic choice can involve co-operation or competition.
Externalinfluences on strategy, including Political, Economic, Social,
Technological, Legal and Environmental (PESTLE).

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 Strategic Business Decisions Unit 3

3.3.2 Making strategic and tactical decisions

What students need to learn:

1 Decision making SWOT analysis.
models
Ansoffs matrix.

2 Investment Nature and purpose of investment appraisal.

appraisal
Calculations and interpretations of figures generated by investment appraisal
techniques:
uu simple payback
uu average rate of return
uu discounted cash flow (net present value only).
Limitations of investment appraisal techniques.

3 Decision trees Nature and purpose of decision trees.

Construction and interpretation of simple decision tree diagrams.
Limitations of decision trees.

4 Critical Path Nature and purpose of critical path analysis.

Analysis (CPA)
Constructing simple networks showing critical path and calculating the total
float.
Calculating Earliest Start Time (EST) and Latest Finish Time (LFT).
Limitations of critical path analysis.

5 Contribution Nature and purpose of contribution.

Calculation and interpretation of contribution.
Contribution as a decision-making tool for making special order decisions.

6 Business Nature and purpose of business contingency planning.

contingency
Business contingencies, e.g. external shocks, loss of data.
planning
Contingency planning to reduce risk.

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 Unit 3 Strategic Business Decisions

3.3.3 Assessing competitiveness

What students need to learn:

1 Interpretation Nature and purpose of financial statements: statement of comprehensive
of financial income, statement of financial position.
statements
Calculation and interpretation of ratios using simplified financial statements to
determine:
uu profitability (gross profit margin, profit for the year margin)
uu return on capital employed (ROCE)
uu liquidity (current and acid test ratio)
uu gearing ((non-current liabilities/capital employed) x100).
Limitations of ratio analysis.
Corporate response to profitability, liquidity and gearing issues.

2 Human resource Calculation and interpretation of:

competitiveness
uu labour productivity (output per time period/number of employees)
uu labour turnover ((number of staff leaving/number of staff employed) 3
100).
Limitations of these calculations.
Corporate response to labour productivity and labour turnover issues.

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 Strategic Business Decisions Unit 3

3.3.4 Company growth

What students need to learn:

1 Nature of Organic and inorganic growth.
company growth
Mergers and takeovers, including horizontal, vertical and conglomerate.
Joint ventures.
Reasons for growth, including to achieve economies of scale.

2 Effects of growth Positive effects of growth, e.g. increased market share, diversification.
Negative
effects of growth, e.g. diseconomies of scale, problems with
communication.

Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013 33
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Unit 3 Strategic Business Decisions

34 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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Unit 4 Business in a Global Context
IA2 compulsory unit Externally assessed

4.1 Unit description

About this unit This synoptic unit focuses on the world of international business, and considers
change and growth in global economies. Students will examine the different
factors businesses have to consider when operating in a global market. Students
will also assess the impact of multinational corporations on the global economy.

Students are also expected to:

carry out calculations

interpret or use data from graphs, tables or diagrams
develop and refine the concepts and theories they previously covered in Units
1, 2 and 3, and to apply these in a range of international contexts.

Note: Data represents passages of text which may include graphs, table(s) of
information or diagrams.

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 Unit 4 Business in a Global Context

4.2 Assessment information

Examination length: 2 hours.

Examination paper in two sections:

Section A: questions based on data 40 marks.
Section B: extended response questions based on data 40 marks.

Total for paper: 80 marks.

Students may use a calculator.

Synoptic assessment in the context of this unit requires students to:

understand the inter-relatedness of many business issues and problems

understand how certain concepts, theories and techniques may be relevant to
a range of different contexts
apply such concepts, theories and techniques in analysing business issues and
problems and in evaluating arguments and evidence.

The emphasis will be on students ability to use business concepts, theories and
techniques that they have built up during their course of study. The assessment
of this unit may draw on material from other parts of the course, enabling
synoptic assessment.

The quality of written communication will be assessed in the context of this unit
through the 12 mark data response question in Section A and both the 20 mark
questions in Section B of the paper. When answering these questions students
should consider the structure, coherence, punctuation and grammar of their
responses.

36 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 Business in a Global Context Unit 4

4.3 Unit content

4.3.1 International markets

What students need to learn:

1 Reasons for the Factorscontributing to increased globalisation, e.g. political change,
increased growth improvements in transport and communication.
of international
Increasing trade liberalisation.
trade
Increasing specialisation by countries, e.g. Indonesia and palm oil, Sri Lanka
and tea.
Reduction of international trade barriers, including the role of the World Trade
Organization (WTO).
Expansion of trading blocs, e.g. European Union, Association of Southeast
Asian Nations (ASEAN).
Increase in foreign direct investment (FDI).

2 Conditions that Push factors, e.g. saturated domestic markets, fierce domestic competition.
prompt businesses
Pull factors, e.g. extending product life cycle, increase in sales and profits.
to trade
internationally Outsourcing and offshoring.

3 Global mergers Spreading risk over different countries/regions.

and takeovers
Entering new markets/trade blocs.
Acquiring national/international brand names and patents.
Securing resources/supplies.
Maintaining/increasing global competitiveness.

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 Unit 4 Business in a Global Context

4.3.2 Changing global economy

What students need to learn:

1 Growing Indicators of growth, e.g. GDP per capita, literacy.
economies
Emergence of the BRICS economies (Brazil, Russia, India, China, South Africa).
Other growing countries, e.g. Mexico, Indonesia.
Anawareness of other growing regional economies, e.g. Africa, South
America.
Implicationsof their economic growth for individuals and businesses, e.g.
trade opportunities for businesses, employment patterns.

38 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 Business in a Global Context Unit 4

4.3.3 Business location

What students need to learn:

1 Assessment of Factors to consider, including:
a country as a
uu levels and growth of disposable income
market
uu ease of doing business
uu infrastructure

uu geographic proximity
uu exchange rate.

2 Assessment of Factors to consider, including:

a country as
uu skills and availability of labour force
a production
location uu costs of production
uu infrastructure

uu location in trade bloc

uu government incentives
uu ease of doing business
uu natural resources
uu likely return on investment
uu joint ventures.

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 Unit 4 Business in a Global Context

4.3.4 Other considerations before trading internationally

What students need to learn:

1 Trade barriers Protectionism.

Tariffs.

Import quotas.
Other trade barriers, e.g. government legislation, domestic subsidies.

2 Ethical Stakeholder conflicts.

considerations
Pay and working conditions.
Environmental considerations, e.g. emissions, waste disposal.
Supply chain considerations, e.g. exploitation of labour, child labour.
Marketingconsiderations, e.g. misleading product labelling, inappropriate
promotional activities.

3 Social/cultural Considerations for businesses, including:

differences in
uu religion
doing business
uu cultural differences
uu diet

uu language, e.g. unintended meanings, inappropriate/inaccurate translations

uu inappropriate branding and promotion
uu gender roles.

40 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 Business in a Global Context Unit 4

4.3.5 Global marketing

What students need to learn:

1 Global marketing Global marketing strategy and global localisation (glocalisation).
Different marketing approaches, including:
uu domestic/ethnocentric

uu mixed/geocentric

uu international/polycentric.

Application and adaptation of the marketing mix (4Ps) for global markets.

2 Global niche Definition

of international subcultures: groups of people across the globe who
markets have common interests or values.
Features of global niche markets.
Application and adaptation of the marketing mix (4Ps) to suit global niches.

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 Unit 4 Business in a Global Context

4.3.6 Multinational corporations (MNCs)

What students need to learn:

1 Potential positive Positive factors to consider, including:
impact of
uu foreign direct investment (FDI) flows
multinationals on
overseas countries uu employment and income
uu wider effects, e.g. jobs created indirectly, spread of wealth
uu impact on local businesses
uu impact on wider economy, e.g. tax revenues, economic growth
uu skills and technology transfer
uu corporate social responsibility (CSR).

2 Potential negative Negative factors to consider, including:

impact of
uu poor wages and working conditions
multinationals on
overseas countries uu exploitation of labour/child labour
uu impact on local businesses
uu transfer pricing and tax avoidance
uu race to the bottom
uu cultural imperialism
uu environmental impact.

3 Controlling Factors to consider, including:

multinationals
uu political influence
uu legal control
uu pressure groups
uu social media.

42 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 D Assessment and additional information

Assessment information

Assessment For a summary of assessment requirements and assessment objectives, see

requirements Section B: Specification overview.

Entering Details of how to enter candidates for the examinations for this qualification
candidates for the can be found in the International Information Manual, copies of which are
examinations for sent to all examinations officers. The information can also be found at
www.edexcel.com/international
this qualification

Resitting of units There is one resit opportunity allowed for each unit prior to claiming certification
for the qualification. The best available result for each contributing unit will
count towards the final grade.

After certification all unit results may be reused to count towards a new award.
Students may re-enter for certification only if they have retaken at least one unit.

Results of units are held in the Pearson unit bank and have a shelf life limited
only by the shelf life of this specification.

Awarding and The IAS qualification will be graded and certificated on a five-grade scale from A
reporting to E. The full International Advanced Level will be graded on a six-point scale A*
to E. Individual unit results will be reported.

A pass in an International Advanced Subsidiary subject is indicated by one of

the five grades A, B, C, D, E of which grade A is the highest and grade E the
lowest. A pass in an International Advanced Level subject is indicated by one of
the six grades A*, A, B, C, D, E of which GradeA* is the highest and GradeE
the lowest. To be awarded an A* students will need to achieve an A on the
full International Advanced Level qualification and an A* aggregate of the IA2
units. Students whose level of achievement is below the minimum judged by
Pearson to be of sufficient standard to be recorded on a certificate will receive an
unclassified U result.

Performance Performance descriptions give the minimum acceptable level for a grade. See
descriptions Appendix 1 for the performance descriptions for this subject.

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 D Assessment and additional information

Unit results The minimum uniform marks required for each grade for each unit:

All units

Unit grade A B C D E

Maximum uniform mark 5 100 80 70 60 50 40

Students who do not achieve the standard required for a grade E will receive a
uniform mark in the range 039.

Qualification The minimum uniform marks required for each grade:

results
International Advanced Subsidiary cash-in code XBS01

Qualification grade A B C D E

Maximum uniform mark 5 200 160 140 120 100 80

Students who do not achieve the standard required for a grade E will receive a
uniform mark in the range 079.

International Advanced Level cash-in code YBS01

Qualification grade A B C D E

Maximum uniform mark 5 400 320 280 240 200 160

To be awarded an A* students will need to achieve an A on the full International

Advanced Level qualification and an A* aggregate of the IA2 units.

Students who do not achieve the standard required for a grade E will receive a
uniform mark in the range 0159.

Language of Assessment of this specification will be available in English only. Assessment

assessment materials will be published in English only and all work submitted for
examination must be produced in English.

44 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 Assessment and additional information D

Additional information

Malpractice For up-to-date information on malpractice, please refer to the latest Joint
Council for Qualifications (JCQ) Suspected Malpractice in Examinations and
Assessments: Policies and Procedures document, available on the JCQ website:
www.jcq.org.uk

Access Pearsons policy on access arrangements and special considerations for GCE,
arrangements GCSE, IAL and Entry Level is designed to ensure equal access to qualifications for
and special all students (in compliance with the Equality Act 2010) without compromising
the assessment of skills, knowledge, understanding or competence.
requirements
Please see the JCQ website (www.jcq.org.uk) for their policy on access
arrangements, reasonable adjustments and special considerations.

Please see our website (www.edexcel.com) for:

theforms to submit for requests for access arrangements and special
considerations
dates for submissions of the forms.

Equality Act 2010 Please see our website (www.edexcel.com) for information on the Equality Act
2010.

Prior learning and Prior learning

progression Students who would benefit most from studying an International Advanced
Level in Business Studies are likely to have a Level 2 qualification such as an
International GCSE in Business Studies at grades A* C.

Progression
This qualification supports progression into further education, training or
employment.

Combinations of Only units achieved from this qualification may contribute to the certification of
entry the International Advanced Subsidiary in Business Studies or the International
Advanced Level in Business Studies.

Student Pearsons access policy concerning recruitment to our qualifications is that:

recruitment they must be available to anyone who is capable of reaching the required
standard
they must be free from barriers that restrict access and progression
equal opportunities exist for all students.

Specification Pearson International Advanced Level in Business Studies Issue 1 June 2013 45
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 D Assessment and additional information

46 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 E Support, training and resources

Support

Pearson aim to provide the most comprehensive support for our qualifications.
Here are just a few of the support services we offer:

SubjectAdvisor subject experts are on-hand to offer their expertise to answer

any questions you may have on delivering the qualification and assessment.
Subject Page written by our Subject Advisors, the subject pages keep you up
to date with the latest information on your subject.
Subject Communities exchange views and share information about your
subject with other teachers.
Training see Training below for full details.

For full details of all the teacher and student support provided by Pearson to help
you deliver our qualifications, please visit
www.edexcel.com/ial/businessstudies/support

Training

Our programme of professional development and training courses, covering

various aspects of the specification and examinations, are arranged each year on
a regional basis. Pearson training is designed to fit you, with an option of face-to-
face, online or customised training so you can choose where, when and how you
want to be trained.

Face-to-face training
Our programmes of face-to-face training have been designed to help anyone who
is interested in, or currently teaching, a Pearson Edexcel qualification. We run a
schedule of events throughout the academic year to support you and help you to
deliver our qualifications.

Online training
Online training is available for international centres who are interested in, or
currently delivering, our qualifications. This delivery method helps us run training
courses more frequently to a wider audience.

To find out more information or to book a place please visit:

www.edexcel.com/training

Alternatively, email [email protected] or

telephone +44 (0) 44 844 576 0025

Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 E Support, training and resources

Resources

Pearson is committed to ensuring that teachers and students have a choice of

resources to support their teaching and study.

Teachers and students can continue to use their existing GCE A level resources for
International Advanced Levels.

To search for Pearson GCE resources, please visit www.pearsonschools.co.uk

To search for endorsed resources from other publishers, please visit

www.edexcel.com/resources

Specifications, Sample Assessment Materials and

Teacher Support Materials

Specifications, Sample Assessment Materials (SAMs) and Teacher Support

Materials (TSMs) can be downloaded from the International Advanced Level
subject pages.

To find a complete list of supporting documents, including the specification,

SAMs and TSMs, please visit www.edexcel.com/ial/businessstudies

48 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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F Appendices

Appendix 1 Performance descriptions 51

Appendix 2 Codes 55

Appendix 3 Glossary of International Accounting Standards (IAS) terminology 57

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 F Appendices

50 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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Appendix 1 Performance descriptions

Introduction

Performance descriptions describe the learning outcomes and levels of attainment

likely to be demonstrated by a representative candidate performing at the A/B
and E/U boundaries for IAS and IA2.

In practice most candidates will show uneven profiles across the attainments
listed, with strengths in some areas compensating in the award process
for weaknesses or omissions elsewhere. Performance descriptions illustrate
expectations at the A/B and E/U boundaries of the IAS and IA2 as a whole; they
have not been written at unit level.

Grade A/B and E/U boundaries should be set using professional judgement.
The judgement should reflect the quality of candidates work, informed by the
available technical and statistical evidence. Performance descriptions are designed
to assist examiners in exercising their professional judgement. They should be
interpreted and applied in the context of individual specifications and their
associated units. However, performance descriptions are not designed to define
the content of specifications and units.

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 52
Assessment objective 1 Assessment objective 2 Assessment objective 3 Assessment objective 4

Assessment Demonstrate knowledge Apply knowledge and Analyse problems, issues and Evaluate, distinguish
objectives and understanding of the understanding of the situations. between and assess
specified content. specified content to appropriateness of fact
problems and issues arising and opinion, and judge
from both familiar and information from a variety
unfamiliar situations. of sources.
A/B boundary Candidates characteristically: Candidates characteristically: Candidates characteristically: Candidates characteristically:
performance
a demonstrate knowledge a demonstrate the ability a analyse problems, issues a distinguish between fact
descriptions
and understanding of the to apply relevant and situations: and opinion
key business concepts knowledge to familiar

Pearson Education Limited 2013

build logical arguments b assess the
in the IAS specification, and unfamiliar business
use appropriate appropriateness of
with few significant contexts
numerical and non- information from a
omissions.
b show knowledge and numerical techniques. variety of sources
understanding of the
c make a reasoned
issues arising from these
evaluation of the sources
situations.
considered.
Appendix 1 Performance descriptors

E/U boundary Candidates characteristically: Candidates characteristically: Candidates characteristically: Candidates characteristically:
performance
a demonstrate a basic a demonstrate the ability a provide partial analysis a make some distinction
descriptions
knowledge and some to apply a basic level of of problems, issues and between fact and
understanding of the relevant knowledge to situations: opinion
business concepts in the familiar business contexts build arguments b assess at a basic level
IAS specification.
b show some knowledge use appropriate the appropriateness of
and understanding of numerical and non- information from one or
the issues arising from numerical techniques. more sources
IAS performance descriptors for Business Studies

these situations.
c make a partial
evaluation of the sources
considered.

Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
 Assessment objective 1 Assessment objective 2 Assessment objective 3 Assessment objective 4
Assessment Demonstrate knowledge Apply knowledge and Analyse problems, issues and Evaluate, distinguish
objectives and understanding of the understanding of the situations. between and assess
specified content. specified content to problems appropriateness of fact
and issues arising from and opinion, and judge
both familiar and unfamiliar information from a variety of
situations. sources.
A/B boundary Candidates characteristically: Candidates characteristically: Candidates characteristically: Candidates characteristically:
performance
a demonstrate precise a demonstrate effective a critically analyse a distinguish between fact
descriptions
knowledge and application of relevant problems, issues and and opinion
understanding of key knowledge to familiar situations:
b assess critically the
business concepts and unfamiliar business build logical arguments appropriateness of
drawn from the IA2 contexts
use appropriate numerical information from a wide
specification, with few
b show knowledge and and non-numerical variety of sources
omissions
understanding of the techniques
c make a well-reasoned
b show knowledge and issues arising from these
b analyse a business evaluation of the sources
understanding of the situations.
strategy considered.
links between business
concepts.

E/U boundary Candidates characteristically: Candidates characteristically: Candidates characteristically: Candidates characteristically:
performance
a demonstrate knowledge a demonstrate the application a provide a simple analysis a distinguish between fact
descriptions
and some understanding of relevant knowledge to of problems, issues and and opinion
of business concepts drawn familiar and unfamiliar situations:
b assess the appropriateness
from the IA2 specification business contexts build arguments of information from several
b show some knowledge and b show some knowledge and use appropriate numerical sources
IA2 performance descriptors for Business Studies

understanding of the links understanding of the issues and non-numerical

c make an evaluation of the
between business concepts. arising from these situations. techniques
sources considered.
b outline a business strategy.

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Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
Performance descriptors Appendix 1

53
Appendix 1 Performance descriptors

54 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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Appendix 2 Codes

Type of code Use of code Code number

Unit codes Each unit is assigned a unit code. This unit code is Unit 1 WBS01
used as an entry code to indicate that a student
wishes to take the assessment for that unit. Centres Unit 2 WBS02
will need to use the entry codes only when entering
students for their examination. Unit 3 WBS03

Unit 4 WBS04

Cash-in codes The cash-in code is used as an entry code to IAS XBS01
aggregate the students unit scores to obtain the
overall grade for the qualification. Centres will need IAL YBS01
to use the entry codes only when entering students
for their qualification.

Entry codes The entry codes are used to: Please refer to the
Pearson Information
1 enter a student for the assessment of a unit Manual, available on our
2 aggregate the students unit scores to obtain the website
overall grade for the qualification. (www.edexcel.com).

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Appendix 2 Codes

56 Specification Pearson Edexcel International Advanced Level in Business Studies Issue 1 June 2013
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 Glossary of International Accounting Standards
Appendix 3 (IAS) terminology

The following is a glossary of the comparison between the International Accounting Standards (IAS)
terminology and the UK GAAP (Generally Accepted Accounting Practice in the UK) terminology.
The assessments for the International Advanced Subsidiary in Business Studies and the International Advanced
Level in Business Studies will use only IAS terminology.

Previously used UK GAAP terminology IAS terminology

Final accounts Financial statements

Trading and profit and loss account Statement of comprehensive income

Sales Revenue
Purchases Raw materials/ Ordinary goods purchased
Cost of goods sold Cost of sales
Stock Inventory
Work in progress Work in progress
Gross profit Gross profit
Sundry expenses Other operating expenses
Sundry income Other operating income
Interest receivable Investment revenues/ finance income
Interest payable Finance costs
Net profit Profit for the year

Balance sheet Statement of financial position

Fixed assets Non-current assets

Land and buildings Property
Plant and equipment Plant and equipment
Investments Investment property
Goodwill etc Intangible assets

Current assets Current assets

Stock Inventory
Stock take Inventory count
Debtors Trade receivables
Prepayments Other receivables
Bank and cash Cash

Current liabilities/Creditors: amounts due within 12 months Current liabilities

Creditors Trade payables
Accruals Other payables
Loans repayable within 12 months Bank overdraft and loans

Long term liabilities/ Creditors: Non-current liabilities

amounts falling due after 12 months
Loans repayable after 12 months Bank (and other) loans
Net book value Carry over

Capital Capital or Equity

Share capital Share capital

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