QCAA Business cheat sheet

Market: any arrangement where buyers and sellers exchange goods or services; price emerges from interaction of demand and supply.

Law of demand: as price rises, quantity demanded falls, all else equal; demand curve slopes downward.

Law of supply: as price rises, quantity supplied rises, all else equal; supply curve slopes upward.

Equilibrium price occurs where quantity demanded equals quantity supplied; a surplus pushes price down, a shortage pushes price up.

Demand shifters: income, tastes, prices of substitutes and complements, population, expectations. Supply shifters: input costs, technology, taxes and subsidies, number of sellers.

Market structures ranked by competition: perfect competition, monopolistic competition, oligopoly, monopoly; concentration rises along this sequence.

PESTLE framework scans macro environment: Political, Economic, Social, Technological, Legal, Environmental factors.

Substitutes have positive cross-price elasticity; complements have negative cross-price elasticity.

Price elasticity of demand = percentage change in quantity demanded divided by percentage change in price; demand is elastic when the value exceeds 1.

Business model describes how a firm creates, delivers and captures value: value proposition, customer segments, channels, revenue streams and cost structure.

Revenue models include direct sales, subscription, freemium, commission and advertising; choice affects cash flow timing and predictability.

Break-even quantity = fixed costs divided by (unit price minus unit variable cost); the denominator is the contribution margin per unit.

Contribution margin = selling price per unit minus variable cost per unit; it contributes first to fixed costs, then to profit.

Operations transform inputs (labour, materials, capital, information) into outputs through processes; efficiency measures output per input.

Inventory methods: FIFO (first in, first out) and LIFO (last in, first out) change cost of goods sold and closing stock valuation when prices move.

Lean operations target waste reduction; just-in-time supply reduces holding costs but raises vulnerability to supply disruption.

Quality approaches: quality control inspects outputs, quality assurance manages processes, total quality management embeds quality culture across the firm.

Capacity utilisation = actual output divided by maximum possible output, expressed as a percentage.

Growth routes: organic (internal expansion), inorganic (merger or acquisition), and strategic alliance or joint venture.

Ansoff matrix pairs products with markets: market penetration, product development, market development, diversification; risk generally rises across these.

Economies of scale: falling average cost as output rises (technical, purchasing, managerial, financial). Diseconomies arise from coordination and motivation problems.

Vertical integration combines firms at different supply-chain stages (backward toward suppliers, forward toward customers); horizontal integration combines competitors.

Decision-making steps: define problem, gather information, generate alternatives, evaluate against criteria, select, implement, review.

Cost-benefit analysis compares total expected benefits with total expected costs; net benefit positive supports the decision.

Opportunity cost is the value of the next best alternative forgone; it applies to capital, time and capacity decisions.

SWOT summarises internal strengths and weaknesses with external opportunities and threats to inform strategic choice.

Ratios for evaluation: gross profit margin = gross profit divided by revenue; net profit margin = net profit divided by revenue; return on investment = net gain divided by cost of investment.

Stakeholders include owners, shareholders, employees, customers, suppliers, lenders, government, community and environment; interests frequently conflict.

Shareholders prioritise returns and share price; employees prioritise pay, security and conditions; customers prioritise quality, price and service.

Stakeholder mapping plots power against interest; high power and high interest groups warrant closest engagement.

Triple bottom line evaluates performance on profit, people and planet rather than financial return alone.

Corporate social responsibility is voluntary action beyond legal minimum toward social and environmental outcomes.

Sustainability reporting commonly covers emissions, energy and water use, waste, labour practices and supply-chain conduct.

Legislation and regulation set minimum standards for workplace safety, consumer protection, competition, environmental discharge and disclosure.

Ethical decision tests: is it legal, does it treat stakeholders fairly, would it withstand public disclosure.

Conflict resolution tools include consultation, negotiation, mediation and, where rights are enforceable, legal action.