Olympic Games 2012

a) Revenue expenditure is spending on the daily running of a business, such as materials and wages used in the preparation for the 2012 Olympic Games. Capital expenditure, on the other hand, refers to the finance spent on purchasing fixed assets, such as the buildings and machinery, land used in preparation of the Olympic Games in London.

b) There are different potential benefits to businesses, such as:

• Pre-Olympic Games, firms in the transport and construction industries will be involved in the infrastructure needed to hold the Olympic Games, e.g. building an Olympic Games stadium.
• Huge opportunities exist for human resource planning and job creation. The preparation and development of the Olympic Games will create jobs and wealth in the UK and London, thereby providing further potential benefits to UK businesses.
• The Olympic Games will attract a huge volume of foreign tourists and visitors to the UK and London, thereby providing many business opportunities.
• Seasonal price increases will help to boost profit margins for UK-bases and London businesses.
• There are huge marketing opportunities for British multinationals, including sponsorship deals and advertising agencies. Broadcasters will also benefit from the global attractiveness of the Olympic Games.

Businesses in London are most possible to benefit the most, although other organisations such as suppliers outside of the capital may also benefit. There must be a clear examination of at least two benefits to be awarded maximum marks.