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Business Studies: Pearson Edexcel

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0% found this document useful (0 votes)

167 views325 pages

Business Studies: Pearson Edexcel

Uploaded by

Saung Hay Pon

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

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You are on page 1/ 325

Write your name here

Surname Other names

Centre Number Candidate Number

Pearson Edexcel
International
Advanced Level

Business Studies
International Advanced Subsidiary
Unit 1: Business Enterprise

Wednesday 11 January 2017 – Morning Paper Reference

Time: 1 hour 30 minutes WBS01/01

You do not need any other materials. Total Marks

Instructions
• Use black ink or ball-point pen.
• Fill in the boxes at the top of this page with your name,
centre number and candidate number.
• Answer all questions in Section A and Section B.
• Answer the questions in the spaces provided
– there may be more space than you need.

Information
• The
The total mark for this paper is 80.
• – usemarks for each question are shown in brackets
this as a guide as to how much time to spend on each question.
• Inandyourgrammar,
responses, you should take particular care with punctuation
as well as the clarity of your expression.
• Calculators may be used.
Advice
• Read each question carefully before you start to answer it.
• Try to answer every question.
• your answers if you have time at the end.
Check

Turn over
Turn over

P48342A
©2017 Pearson Education Ltd.
*P48342A0120*
1/1/1/1
SECTION A
Answer ALL the questions in this section.
Write the letter of your chosen answer in the box and then explain your choice in the
space provided.
You should spend 30 minutes on this section. Use the data to support your answers where
relevant. You may annotate and include diagrams in your answers.
1 (a) Sharon Roberts used her own money to open her clothing repair business,
Sharon’s Sewing & Alterations. She operates it from her home.
Which one of the following is most likely to be the structure of Sharon’s business?
(1)
A Public Limited Company
B Private Limited Company
C Cooperative
D Sole Trader

Answer

(b) Explain why this answer is correct.

(3)

. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 1 = 4 marks)

2
*P48342A0220*
2 (a) Before launching a new cancer drug, pharmaceutical company Novartis
interviewed some doctors for their opinions about the product.
Which one of the following is this most likely to be an example of?
(1)
A Sampling
B Secondary research
C Market size
D Trade-off

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 2 = 4 marks)

*P48342A0320*
3
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3 (a) Ohungu Wilderness, a new business, is seeking £770 000 funding in return for 50%
ownership in its proposed adventure safari lodge in Namibia.
Which one of the following sources of finance best meets the needs of
Ohungu Wilderness?
(1)
A Overdraft
B Venture capital
C Debenture
D Retained profit

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 3 = 4 marks)

4
*P48342A0420*
4 Cosmetics company L’Oreal reported the results given below on 31 December 2014.

Extracts €m €m

Total revenues 22 532

Cost of goods sold 6 501

Gross profit 16 031

Other operating expenses 12 173

(a) What was L’Oreal’s profit for the year margin?

(1)
A 71.1%
B 28.8%
C 17.1%
D 31.7%

Answer

(b) Explain why this answer is correct. (Show your working.)

(3)

(Total for Question 4 = 4 marks)

*P48342A0520*
5
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5 (a) UK supermarket chain Tesco sells leading products at similar prices to
other supermarkets.
This is an example of:
(1)
A Premium pricing
B Competitive pricing
C Penetration pricing
D Psychological pricing

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 5 = 4 marks)

6
*P48342A0620*
6 (a) The UK government announced that from 1 October 2015 the minimum wage for
18–20-year-olds would rise from £5.13 per hour to £5.20 per hour.
What is the most likely impact of this change on small businesses in the UK?
(1)
A Profitability may increase
B Competitiveness may increase
C Wage costs may decrease
D Recruitment may decrease

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 6 = 4 marks)

TOTAL FOR SECTION A = 24 MARKS

*P48342A0720*
7
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SECTION B
Answer ALL questions in this section.
You should spend 60 minutes on this section.
Evidence A: How 14-year-old Rachel Zietz built a $1million company
Gladiator Lacrosse was founded in 2013 by Rachel Zietz when she was just 13 years old.
Her online lacrosse equipment company is now expected to exceed $1m in revenue.
Rachel lined up with the other finalists
for the Miami Chamber of Commerce’s
2015 Entrepreneur Award for young 5
professionals.
Rachel astonished all the judges
with her impressive background and
accomplishments at such a young age.
One of the judges said, “I kept thinking 10
her birth date had to be a mistake.
Her business acumen and planning skills were beyond impressive.”

Rachel was the first teenager ever nominated for this award. Her Gladiator Lacrosse
products are top-rated in their category on Amazon.com above bigger and better
known brands. 15

Evidence B: Young Entrepreneurs Academy (YEA!)

Before Gladiator Lacrosse was formed, Rachel joined a 33-week programme called the
Young Entrepreneurs Academy. The programme taught her to build a business plan
around a need in her own life.
A skilled lacrosse player who plays in school and national teams, Rachel was disappointed
with the equipment she used. The practice goals and rebounders that were available 5
seemed to break easily and were expensive. Rachel altered the two products, designing
thicker netting and more durable frames.
At the end of the Young Enterprise programme, using her business plan, she presented
her idea for high-quality lacrosse products to an investor. She was given $2 700 finance,
and used it to work with suppliers in China to secure her first 45-foot container of 10
lacrosse goals and rebounders.
(Source: adapted from ‘How 14-year-old Rachel Zietz built a $1 million company’,
Celia Ampel © American City Business Journals, 2015)

8
*P48342A0820*
Evidence C: Challenges of running a business
Rachel has said her biggest challenge in getting started with Gladiator Lacrosse was in
managing everything. “I learned time management skills are very important when trying
to balance school, competitive lacrosse, and my business.”
Rachel had to learn some lessons the hard way. She once ran out of products, not
realising how long it takes for factory shipments from China to arrive in the US. Her father 5
said “She learned what the expression ‘slow boat from China’ really meant. The business
lost sales at this time. She is much better at planning her business now”.
Rachel said, “My main advice would be to make sure you are ready to commit. I have to
constantly watch over my business – plan for growth, to become something successful
and meaningful in the world. You also learn perseverance and determination. 10
When someone tells you that you cannot build a business because you’re too young and
it’s a mistake, or too hard, that is when you prove them wrong. It is possible to start a
business no matter what anyone says.”
(Source: adapted from ‘Kidpreneur Rachel Zietz Is Building Better Lacrosse Equipment’,
Adam Toren © Kidpreneurs, 2014)

Evidence D: Gladiator Lacrosse Rebounder

Our lacrosse rebounder is durable and adjusts perfectly
for all sizes of practice space. It is four feet by three feet
and is easily adjusted to fit the height of any player.
The rebounder also adjusts to change the angle of
the bounce. 5

Steel pipes give the rebounder a sturdy base and it

has a dampened rebound surface to allow for usage in
smaller spaces.
Unlike most rebounders, the Gladiator Lacrosse
rebounder folds flat for easy storage, which protects it 10
from the elements and preserves the effectiveness of
its rebounding capabilities.
The Gladiator Lacrosse rebounder meets all of the
requirements of a quality rebounder and is available
from our website at a fair price of $245. 15

(Source: adapted from http://www.gladiatorlacrosse.com/products/)

*P48342A0920*
9
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7 Explain two entrepreneurial characteristics that Rachel demonstrated when starting
Gladiator Lacrosse.

(Total for Question 7 = 6 marks)

10
*P48342A01020*
8 (a) Explain two examples of opportunity cost for Rachel of setting up her
own business.
(6)

*P48342A01120*
11
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(b) Analyse two ways Gladiator Lacrosse has achieved a competitive advantage.
(6)

(Total for Question 8 = 12 marks)

12
*P48342A01220*
9 The following information is available from Gladiator Lacrosse.
Fixed costs for a full production run of the lacrosse rebounder = $32 000
Average variable costs per lacrosse rebounder = $85
Average selling price per lacrosse rebounder = $245
(a) Using the above data, calculate the break-even output for Gladiator Lacrosse
rebounders. (Show your working.)
(4)

*P48342A01320*
13
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(b) Rachel is planning to expand Gladiator Lacrosse over the next five years.
Assess the likely usefulness of a business plan in obtaining finance for Gladiator
Lacrosse’s expansion.
(8)

(Total for Question 9 = 12 marks)

14
*P48342A01420*
10 Assess Rachel’s decision to only sell her products through the digital economy.
(12)

*P48342A01520*
15
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. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 10 = 12 marks)

16
*P48342A01620*
11 Evaluate the extent to which Gladiator Lacrosse is a market orientated business.
(14)

*P48342A01720*
17
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. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 11 = 14 marks)

TOTAL FOR SECTION B = 56 MARKS

TOTAL FOR PAPER = 80 MARKS

18
*P48342A01820*
Write your name here
Surname Other names

Centre Number Candidate Number

Pearson
Edexcel GCE
Business Studies/Economics
and Business
Advanced Subsidiary
Unit 1: Developing New Business Ideas
Thursday 18 May 2017 – Afternoon Paper Reference
6BS01/01
Time: 1 hour 15 minutes 6EB01/01

You do not need any other materials. Total Marks

Instructions
• Use black ink or ball-point pen.
• Fill in the boxes at the top of this page with your name,
centre number and candidate number.
• Answer allthequestions
Answer in Section A and Section B.
• – there may bequestions in the spaces provided
more space than you need.
• You may use a calculator.
Information
• The total mark for this paper is 70.
• –Theusemarks for each question are shown in brackets
this as a guide as to how much time to spend on each question.
• written communication
Questions labelled with an asterisk (*) are ones where the quality of your
will be assessed
– you should take particular care on these questions with your spelling, punctuation
and grammar, as well as the clarity of expression.

Advice
• Try
Read each question carefully before you start to answer it.
• Checkto answer every question.
• your answers if you have time at the end.

Turn over
Turn over

P53242A
©2017 Pearson Education Ltd.
*P53242A0120*
1/1/1/1/1
SECTION A
Answer ALL questions in this section.
Write the letter of your chosen answer in the box and then explain your choice
in the space provided.
You should spend 30 minutes on this section. Use the data to support your answers where
relevant. You may annotate and include diagrams in your answers.
1 Award-winning entrepreneurs Holly Tucker and Sophie Cornish founded
notonthehighstreet.com. The business started in 2006 in their kitchen.
(a) Which one of the following may be described as an entrepreneurial characteristic?
(1)
A Resilience
B Works independently
C Social purpose
D Able to work from home

Answer

(b) Explain your answer.

(3)

(Total for Question 1 = 4 marks)

2
*P53242A0220*
2 The first ever Lego toy figure in a wheelchair was launched at the Nuremberg and
London toy fairs in January 2016. Lego decided to manufacture the toy in response
to a letter signed by over 20,000 customers.
(a) This is best described as an example of
(1)
A a margin of safety
B market orientation
C a product trial
D adding value

Answer

(b) Explain your answer.

(3)

(Total for Question 2 = 4 marks)

*P53242A0320*
3
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3 Ratchet Clothing Ltd designs and makes urban streetwear for young people.
In October 2013, it posted operating profits of £123 000. In October 2014, operating
profits had increased to £392 000. Sales revenue in October 2013 was £615 000;
by October 2014, sales revenue increased to £1 960 000.
(a) Which one of the following is correct?
(1)
A Contribution increased by £1 345 000
B Gross profit was £1 568 000
C Operating profit margins remained the same
D Ratchet Clothing Ltd’s prices increased

Answer

(b) Explain your answer (show your workings).

(3)

(Total for Question 3 = 4 marks)

4
*P53242A0420*
4 In January 2016 Tim Cook, Apple’s Chief Executive, announced record profits
of $53.4bn and record sales revenue of $234bn.

Apple’s growth 2011-2015

250

200

150
$bn
100

0
2011 2012 2013 2014 2015
Fiscal year
Revenue ($bn)

(Source: http://www.telegraph.co.uk/technology/
apple/11959016/Apple-reports-biggest-annual-profit-in-history.html)

(a) The growth in Apple’s sales revenue, as shown in the chart above, could be
explained by an increase in each of the following, except
(1)
A repeat purchases
B contribution
C market size
D prices

Answer

6
*P53242A0620*
(b) Explain your answer.
(3)

(Total for Question 4 = 4 marks)

*P53242A0720*
7
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5 In October 2014, HSBC launched its online Business Plan Tool to support owners of
small businesses with their applications for a bank loan.
(a) A business plan can also usually support
(1)
A limited liability
B margin of safety
C trade credit
D market segmentation

Answer

(b) Explain your answer.

(3)

(Total for Question 5 = 4 marks)

8
*P53242A0820*
6 In the autumn of 2015, Disney created a massive demand amongst children across
the world for Star Wars merchandise. This led to there being a great interest in, and
demand for, the movie when it was released just before Christmas 2015.
(a) The above is best described as an example of the non-price demand factor
(1)
A complements
B income
C availability of substitutes
D improvements in technology

Answer

(b) Explain your answer.

(3)

(Total for Question 6 = 4 marks)

*P53242A0920*
9
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7 In 2009 the exchange rate for £ sterling averaged 8 Danish Krone.
In January 2016, the £ sterling was worth 10 Danish Krone.
(a) This could have led to
(1)
A an increase in the demand for UK chocolate bars exported to Denmark
B an increase in the number of Danish people visiting the UK
C a fall in the volume of exports of dairy products from Denmark to the UK
D an increase in the number of UK tourists visiting Denmark

Answer

(b) Explain your answer.

(3)

(Total for Question 7 = 4 marks)

10
*P53242A01020*
8 In November 2015, the UK inflation rate was 1.1%.
(a) Lower inflation rates are most likely to cause a UK business to have an increase in
(1)
A uncertainty
B demand for exports
C interest rates
D import costs

Answer

(b) Explain your answer.

(3)

(Total for Question 8 = 4 marks)

TOTAL FOR SECTION A = 32 MARKS

*P53242A01120*
11
Turn over
SECTION B
Answer ALL questions in this section.
You are advised to spend 45 minutes on this section.
Evidence A
Arrive ‘n’ Shine 2016
Dean Moore left school at the age of 16 to work for his father, Ted. Ted owned Rams Ltd,
a business that rinsed and cleaned empty refuse bins for residents across the city of
Derby. Ted knew that his son had the right attitude to do well ‘working with his hands’
rather than studying. Dean was a well-liked, friendly individual for whom nothing was
too much trouble. 5

After passing his driving test just a few days after his 17th birthday in January 2008,
Dean decided to increase his income by being employed as a window cleaner for
Sparkle, a well-established company in Derby. However, employment gave him some
problems. Dean would often work a 12-hour day, five days a week cleaning windows; he
was expected to clean the windows in the traditional way – using dangerous aluminium 10
ladders up to seven metres in length, sometimes contravening the Health and Safety
Executive 2005 Working At Height Regulations.
Dean eventually began to lose interest in working for Sparkle. As a father himself he
decided he wanted to be safer, have more flexibility and purpose to his life. So in January
2014 he used his savings of £5 000 to set up his own window cleaning business – Arrive 15
‘n’ Shine.
Dean uses deionised water-fed poles that are supplied from a 350 litre tank in his van.
This system is safer as Dean does not need to use ladders and windows are cleaner because
the thin film of salts that you get from dried tap water is not there.
Largely thanks to word-of-mouth advertising, Arrive ‘n’ Shine now has over 300 properties 20
on its books, covering a 15-mile radius around Derby, including commercial properties
such as the popular Motorpoint car sales showroom.
(Source: adapted from an interview with Dean More on 26 January 2016)

12
*P53242A01220*
Evidence B

Typical monthly budget for Arrive ‘n’ Shine £s

Receipts
Residential sales* 2 400
Commercial sales** 200
Total 2 600

Expenditure/payments
Labour costs 1 600
Stock: deionised water 150
Consumables: brushes, carbon filters, membranes 100
Vehicle fuel 150
Marketing, communications, admin 20
Insurances (vehicle and public liability) 60
Total 2 080
Balance (profit) 520

*based on average charge of £8 per property, 300 properties per calendar month
**based on an average of £50 per property, 4 properties per calendar month

(Source: adapted from an interview with Dean More on 26 January 2016)

*P53242A01320*
13
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9 Analyse two non-price factors that could affect the supply of Arrive ’n’ Shine’s services.

(Total for Question 9 = 6 marks)

14
*P53242A01420*
10 Using the case study, explain how Dean’s business, Arrive ’n’ Shine, adds value.

(Total for Question 10 = 4 marks)

*P53242A01520*
15
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11 Evaluate the importance of income as a key motive for Dean to become
an entrepreneur.

(Total for Question 11 = 8 marks)

16
*P53242A01620*
12 Evaluate why product trials might be useful to Arrive ‘n’ Shine.

(Total for Question 12 = 8 marks)

*P53242A01720*
17
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*13 Assess the likely value of each of the following to Arrive ‘n’ Shine:
(a) trade credit
(6)

18
*P53242A01820*
(b) an overdraft
(6)

(Total for Question 13 = 12 marks)

TOTAL FOR SECTION B = 38 MARKS

TOTAL FOR PAPER = 70 MARKS

*P53242A01920*
19
Write your name here
Surname Other names

Centre Number Candidate Number

Pearson Edexcel
Level 3 GCE

Business
Advanced Subsidiary
Paper 1: Marketing and People

Thursday 18 May 2017 – Afternoon Paper Reference

Time: 1 hour 30 minutes 8BS0/01

You do not need any other materials. Total Marks

Instructions
• Use black ink or ball-point pen.
• Fill in the boxes at the top of this page with your name,
centre number and candidate number.
• Answer all questions.
• Answer the questions in the spaces provided
– there may be more space than you need.

Information
• The
The total mark for this paper is 80.
• – usemarks for each question are shown in brackets
this as a guide as to how much time to spend on each question.
• You may use a calculator.
Advice
• Read each question carefully before you start to answer it.
• Try to answer every question.
• Check your answers if you have time at the end.

Turn over
Turn over

P49836A
©2017 Pearson Education Ltd.
*P49836A0120*
1/1/1/1/1/1/1
Answer ALL questions.
SECTION A
Read Extract A before answering Question 1.
Write your answers in the spaces provided.
Extract A
Marks & Spencer’s (M&S) plan to revive its brand
High street brand M&S has long been a sign of British quality and tradition. It provides
a range of food, clothing and homeware, but over the past two years the business has
struggled to maintain its iconic status.
New chief executive, Steve Rowe, is reviewing the future of its range of fashion brands as 5
part of an overhaul of its struggling clothing business. “Our priority is fixing clothing” said
Rowe, womenswear seems to be the problem area. M&S has lost touch with what the
50+ age group really want and also needs to attract younger customers, such as those at
the top end of NEXT’s demographic of 25 to 45-year-olds.
Rowe acknowledged that some of its clothing needs to be more competitively priced. 10
M&S sold 30,000 pairs of black jeggings - a 200% increase - after cutting the price by
£2 to £17.50.
M&S’s food business is still very strong. Shoppers are more than happy to buy at M&S, but
they need to see non-food merchandise they like as well. Shoppers are much choosier
these days, meaning M&S needs to become more market orientated. 15

(Sources: adapted from Marks & Spencer Results: A Tale Of Two Halves © 2016
Mintel Group Ltd and New M&S boss brands latest clothing sales fall
‘unsatisfactory’ © 2016 Guardian News and Media Limited)

2
*P49836A0220*
1 (a) What is meant by competitive pricing?
(2)

(b) What is meant by market orientation?

(2)

(c) Explain how M&S could build its clothing brand.

(4)

*P49836A0320*
3
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(d) Construct a market map to illustrate the impact of M&S’s decision to aim its
clothing range at a younger target market.
(4)

4
*P49836A0420*
(e) Assess two factors that could influence the price elasticity of demand for M&S’s
clothing range.
(8)

*P49836A0520*
5
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(f ) Assess whether there is likely to be a trade-off for M&S when it targets a younger
market segment for its women’s clothes.
(10)

6
*P49836A0620*
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 1= 30 marks)

TOTAL FOR SECTION A = 30 MARKS

*P49836A0720*
7
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SECTION B
Read Extract B before answering Question 2.
Write your answers in the spaces provided.
Extract B
Select Service Provider (SSP) to really fly at airports
At airports and railway stations across Europe and beyond many people will have eaten
or drank at restaurants, bars and cafes operated by SSP. SSP is a leading operator of
branded food and beverage outlets in travel locations across 29 countries. It operates
about 2,000 outlets at 124 airports and 270 railway stations worldwide. 5

Some brands belong exclusively to SSP such as Millie’s Cookies, Upper Crust and Caffé
Ritazza, but SSP also operates franchises for well-known names such as Nando’s, Burger
King and Starbucks.
SSP has been successful since becoming a public limited company in 2014 and has a
strong plan to expand. 44% of its revenue comes from the UK, with Asia and the Middle 10
East offering the biggest potential for growth.
Today SSP has about 300 brands. In line with changing customer tastes, many serve
healthier, premium food.
(Source: adapted from ‘Food Outlet firm to really fly at airports abroad’
by Joanne Hart, The Mail on Sunday, 4 October 2015)

8
*P49836A0820*
2 (a) What is meant by public limited company?
(2)

(b) What is meant by a franchise?

(2)

(c) Explain how a flexible workforce might benefit SSP.

(4)

*P49836A0920*
9
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(d) Construct a supply and demand diagram to illustrate the likely impact of
changing consumer tastes on Burger King.
(4)

10
*P49836A01020*
(e) Assess two benefits to SSP of operating franchises.
(8)

*P49836A01120*
11
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(f ) Assess the likely benefits to a company, such as SSP, of using non-financial
techniques to motivate employees.
(10)

12
*P49836A01220*
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 2 = 30 marks)

TOTAL FOR SECTION B = 30 MARKS

*P49836A01320*
13
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SECTION C
Read Extract C before answering Question 3.
Write your answer in the space provided.
Extract C
Maria Allen Boutique
Combining creativity with ethics has proved a powerful mix for Maria Allen, whose
business Maria Allen Boutique counts the British Museum and David Cameron as clients.
Maria has created a business that stands out in a competitive market.
A champion of the Made-in-Britain slogan, Maria’s business creates beautiful and 5
sustainable gifts and products by reclaiming old wood to handcraft personalised and
unique merchandise.
Launched with just a couple of hundred pounds, she sold her handmade jewellery from
Etsy, an e-commerce website, and began generating a profit from day one.
The business, which is based in Brighton, now has a growing team of staff, an online retail 10
channel and sells to over 70 stockists worldwide as well as having exclusive partnerships
with the British Museum, Tate Galleries and the Royal Academy of Arts.
The company initially found popularity with its individually designed love letter
necklaces and envelope cufflinks, and has now expanded its product range from
jewellery to wedding, homeware and accessory collections. 15

(Source: adapted from http://startups.co.uk/young-entrepreneurs-

maria-allen-maria-allen-boutique/)

14
*P49836A01420*
Maria Allen aims to reach sales of £500 000 by the end of the year. To achieve this, she
could focus on ethical sourcing or cost minimisation.
3 Evaluate these two options and recommend which option would help Maria Allen
meet her sales target.
(20)

*P49836A01520*
15
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. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

16
*P49836A01620*
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 3 = 20 marks)

TOTAL FOR SECTION C = 20 MARKS

TOTAL FOR PAPER = 80 MARKS

*P49836A01720*
17
Write your name here
Surname Other names

Centre Number Candidate Number

Pearson Edexcel
International
Advanced Level

Business Studies
International Advanced Subsidiary
Unit 1: Business Enterprise

Thursday 18 May 2017 - Afternoon Paper Reference

Time: 1 hour 30 minutes WBS01/01

You do not need any other materials. Total Marks

Turn over
Turn over

P48261A
©2017 Pearson Education Ltd.
*P48261A0120*
1/1/1/1
SECTION A
Answer ALL questions in this section.
Write the letter of your chosen answer in the box and then explain your choice in the
space provided.
You should spend 30 minutes on this section. Use the data to support your answers where
relevant. You may annotate and include diagrams in your answers.
1 Gautam Lulla started his business, Travel Tripper, which allows customers to book
hotel rooms online. He knew many competitors already existed.
(a) Which one of the following entrepreneurial characteristics best describes
Gautam Lulla?
(1)
A Computer literate
B Social entrepreneur
C Profit maximiser
D Risk taker

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 1 = 4 marks)

2
*P48261A0220*
2 The UK Office for National Statistics publishes a report showing the amount of
building materials used each year.
(a) For a building company, this report is best described as a source of
(1)
A primary research data
B secondary research data
C demographic data
D qualitative data

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 2 = 4 marks)

*P48261A0320*
3
Turn over
3 A Month of Sundaes is a café in Yorkshire that manufactures its own traditional ice
cream. It has a number of fixed and variable costs.
(a) Which one of the following is a variable cost for the café?
(1)
A Manager’s salary
B Café rent
C Insurance
D Raw materials

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 3 = 4 marks)

4
*P48261A0420*
4 Paws for Thought, a profitable dog-grooming business, is owned by Jenny, a sole trader.
(a) Jenny is most likely to use her profit to pay
(1)
A shareholders
B utility bills
C for expansion
D staff wages

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 4 = 4 marks)

*P48261A0520*
5
Turn over
5 A private investor is willing to lend £1.2m to Tata Power, a large multinational
corporation.
(a) What is the most appropriate financial arrangement for the investor?
(1)
A Debenture
B Trade credit
C Venture capital
D Leasing agreement

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 5 = 4 marks)

6
*P48261A0620*
6 The UK inflation rate increased in the three months up to February 2016.
(a) Which one of the following is most likely to be the effect on Tyneside Safety Glass,
a UK manufacturing business?
(1)
A Increase in costs of supplies
B Increase in export orders
C Increase in investment
D Increase in business confidence

Answer

(b) Explain why this answer is correct.

(3)

(Total for Question 6 = 4 marks)

TOTAL FOR SECTION A = 24 MARKS

*P48261A0720*
7
Turn over
SECTION B
Answer ALL questions in this section.
You should spend 60 minutes on this section.
Evidence A: bio-bean ltd
Arthur Kay, a social entrepreneur, is the
co-founder of energy start-up bio-bean ltd,
which is one of those innovative and
obviously brilliant business ideas that leaves
you asking “Why didn’t I think of that?” Arthur 5
thought of the business idea after designing
a coffee roasting machine whilst at university
studying architecture. He researched how
coffee waste could be used for power to heat
the building. 10

bio-bean ltd collects used coffee grounds from London’s wholesale producers and coffee
shops (Londoners produce over 200,000 tonnes of coffee waste each year), converts it
into biodiesel and biomass pellets and then sells it on to transport and heating industries.
The business was launched after Arthur won £275 000 in funding from The Pitch 2013, an
enterprise challenge competition. 15

To date, bio-bean ltd has received financial backing from several private investors and won
numerous financial awards including:
• €500 000 to expand the business from the Postcode Lottery Green Challenge 2014
• £20 000 from Santander Universities Entrepreneurship Competition
• $100 000 from innovation investor Founder.org 20

• £40 000 from Shell Oil.

In addition to growing the business, Arthur aims to be a pioneer for the environment.
As well as diverting vast tonnes of coffee waste from landfill sites, his start-up has saved
the equivalent of 729,600 tonnes of CO2 and 53,200 barrels of oil. Arthur launched
the social enterprise business to counteract the rising waste collections and disposal 25
problems, and the need for cleaner, affordable energy.
The environment remains at the forefront of Arthur and bio-bean ltd’s future plans with
an ultimate ambition to “introduce the idea of waste as a resource to a wider market and
kick-start the circular economy here in the UK.”
(Source: adapted from Young Entrepreneurs: Arthur Kay, Bio-Bean © startups.co.uk)

8
*P48261A0820*
Evidence B: Catching up with Arthur Kay, The Pitch 2013 champion
Why do you think you won The Pitch 2013?
We are a young, enthusiastic team who really believe in what
we are doing. We had to clearly express this to the judges of
The Pitch and convince them that our idea has the potential
to make a real difference: both to London’s green economy 5
and on a more global, environmental scale.
We have proposed a business solution that addresses the
huge amount of waste produced and carbon emissions from
fuel. Both are problems that have really come into the public
view in the last few years. 10
(Source: © bio-bean limited)

What are your plans for the future?

Our main aim is to set up bio-bean in London as a fully functioning social enterprise.
We hope to expand the business to operate in other big cities, particularly in Northern
Europe and the US.
We have obtained EU and US patents because they are the two biggest markets for 15
renewable energy and have the highest per capita consumption of coffee in the world.
(Source: adapted from Catching up with The Pitch class of 2013:
Arthur Kay, Bio Bean © BusinessZone.co.uk)

Evidence C: Ellen MacArthur Foundation

The Ellen MacArthur Foundation works in education, business innovation and analysis to
accelerate the worldwide move towards a circular economy.
Circular Economy Overview
Today’s ‘take, make and dispose’ economic model relies on large quantities of cheap,
easily accessible materials and energy. It is a model that is reaching its physical limits. 5
A circular economy is an attractive and viable alternative that businesses have already
started exploring today.
The concept of a circular economy
A circular economy aims to keep products, components, and materials out of waste
disposal and recycle as many times as possible to extract maximum usage and value. 10

*P48261A0920*
9
Turn over
7 Explain two benefits to Arthur Kay of bio-bean ltd being a private limited company.

(Total for Question 7 = 6 marks)

10
*P48261A01020*
8 (a) Explain two non-price factors that could increase the demand for bio-bean ltd’s
services.
(6)

12
*P48261A01220*
(b) Explain two reasons why bio-bean ltd would want to obtain patents.
(6)

(Total for Question 8 = 12 marks)

*P48261A01320*
13
Turn over
9 Projected sales and costs figures for bio-bean ltd’s next annual accounts are as follows:
• Expenses £270 200
• Cost of Goods Sold £140 000
• Revenues £650 000
(a) Calculate, to 2 decimal places, bio-bean ltd’s projected profit for the year margin.
(Show your working.)
(4)

14
*P48261A01420*
(b) Assess the likely impact of bio-bean ltd’s trading operations on two stakeholders.
(8)

(Total for Question 9 = 12 marks)

*P48261A01520*
15
Turn over
10 Assess the likely importance to Arthur Kay of making a profit from running bio-bean ltd.
(12)

16
*P48261A01620*
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 10 = 12 marks)

*P48261A01720*
17
Turn over
11 Evaluate the extent to which bio-bean ltd contributes to a circular economy.
(14)

18
*P48261A01820*
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . .

(Total for Question 11 = 14 marks)

TOTAL FOR SECTION B = 56 MARKS

TOTAL FOR PAPER = 80 MARKS

*P48261A01920*
19
Write your name here
Surname Other names

Pearson Edexcel Centre Number Candidate Number

International
Advanced Level

Business Studies
International Advanced Subsidiary
Unit 1: Business Enterprise

Tuesday 10 October 2017 – Afternoon Paper Reference

Time: 1 hour 30 minutes WBS01/01

You do not need any other materials. Total Marks

Information
• The total mark for this paper is 80.
• The marks for each question are shown in brackets
– use this as a guide as to how much time to spend on each question.
• You should take care in your responses with your punctuation and grammar, as
well as the clarity of expression.
• Calculators may be used.
Advice
• Read each question carefully before you start to answer it.
• Try to answer every question.
• your answers if you have time at the end.
Check

Turn over

*P50799A0120*
P50799A
©2017 Pearson Education Ltd.

1/1/1

SECTION A
Answer ALL the questions in this section.
Write the letter of your chosen answer in the box and then explain your choice
in the space provided.
You should spend 30 minutes on this section. Use the data to support your answers
where relevant. You may annotate and include diagrams in your answers.
1 (a) Ben Cohen and Jerry Greenfield originally set up Ben and Jerry’s Ice Cream
business as a partnership.
Which one of the following is the main advantage of a business partnership?
(1)
A Shared ownership
B Limited liability
C Ability to sell shares
D Unlimited liability

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 1 = 4 marks)

2
*P50799A0220*

2 (a) McCormick is a multinational company producing food products and spices. It

regularly carries out test marketing on its new ranges of foods and drinks.
What is the main reason for a business to carry out test marketing?
(1)
A Guarantee sales
B Reduce margin of safety
C Gather secondary research
D Assess likely levels of demand

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................................................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 2 = 4 marks)

3
*P50799A0320* Turn over

3 (a) Nocturne has been creating hand-made lamps from hardwood, marble, stone and
metal for five years.
Which one of the following would be the most suitable source of finance for its
purchase of raw materials?
(1)
A Debenture
B Trade credit
C Share issue
D Bank loan

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 3 = 4 marks)

4
*P50799A0420*

4 (a) Dream Bridal Wear is one of the UK’s largest retailers of bridal gowns, bridesmaid
dresses and mother of the bride outfits.
Which one of the following is the main market segment that Dream Bridal Wear
is targeting?
(1)
A Age
B Gender
C Income
D Occupation

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................................................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 4 = 4 marks)

5
*P50799A0520* Turn over

5 (a) J Barbour & Sons supplies clothing to a wide range of retailers.
• Break-even output per month = 350 units
• Monthly sales revenue = £100 000
• Unit selling price = £250
Which one of the following is the monthly margin of safety for J Barbour & Sons?
(1)
A 25
B 40
C 50
D 75

Answer

(b) Explain why this answer is correct. (Show your working.)

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 5 = 4 marks)

6
*P50799A0620*

6 (a) By 2025, the population of people in Japan aged 65 or over is expected to

increase to 36%. Siemens has decided to increase its output of the hearing aids it
produces in Japan.
Which one of the following influences is most likely to have caused this decision?
(1)
A Ethical
B Environmental
C Demographic
D Legal

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 6 = 4 marks)

TOTAL FOR SECTION A = 24 MARKS

7
*P50799A0720* Turn over

SECTION B
Answer ALL questions in this section.
You should spend 60 minutes on this section.
Evidence A – Nina Devani, DevaniSoft
Meet the 16-year-old schoolgirl juggling a tech start-up with AS levels.
Challenging the traditional
entrepreneurial stereotype, Nina Devani
is the teenager who founded her 5
business DevaniSoft aged just 14.
Specialising in computer security
software, Nina launched the company’s
first app ‘Prompt Me Nina’ after her father’s
Facebook account was hacked. Having 10
had trouble remembering his different
passwords, Nina came up with a solution.
She designed an app to prompt you on both usernames and passwords without having
to give away your actual passwords.
Nina raised £10 000 from a venture capitalist to start the business and says the company 15
has been “profitable since its launch” but it’s her get-up-and-go attitude that commands
praise. The teenage entrepreneur says business has been her “passion” since she was
really young and believes “in making things happen rather than dreaming
about them”.
However, Nina states that starting a business at such a young age hasn’t always been 20
easy; “It takes hard work and perseverance to make those dreams into a reality”.
With five employees and an additional 10 consultants working for her, Nina appears
to have the business ability that will see her go far. She is currently working on new
products to launch later this year and she hopes these will be a huge success. She plans
to expand her skills set in the future by studying economics at university. 25

Shortlisted for the NatWest Everywoman Awards 2014, the awards’ youngest ever finalist,
Nina points out that being a young entrepreneur has meant “less people take you
seriously” but still advises others to follow in her footsteps: “It really sets you on the right
path for the future and seeing your ideas turn into a reality develops a really strong sense
of independence and satisfaction.” 30

Whether or not Nina will become a millionaire from DevaniSoft is uncertain but with so
much focus, ambition and determination, we certainly think Nina Devani is a name we’ll
be hearing more of.
(Source: adapted from @ startups.co.uk)

8
*P50799A0820*

Evidence B – Products launched so far

Applications launched by DevaniSoft so far include Prompt Me Nina™ and Prompt
Me Now™. Prompt Me Nina™ is a consumer password reminder service for online
shoppers and Prompt Me Now™ is for business users. These apps are only available
from devanisoft.com. 5

Prompt Me Nina™
Prompt Me Nina is our consumer password
reminder application, available on Android
and Windows phones. Our password reminder
can ‘Prompt’ you manually or automatically on 10
any website.

(Source: adapted from © Devanisoft.com)

Evidence C – DevaniSoft – Next Steps

Following the success of her consumer and desktop applications called ‘Prompt Me
Nina’ and ‘Prompt Me Now’ Nina is currently working on a secure solution for the banking
industry.
‘Prompt Me Now’ is proving a winner in the business security market with new 5
clients signing up every day. DevaniSoft is clearly more successful than hundreds of other
app designer companies.
Strong sales, low production costs and high profit margins mean DevaniSoft is attracting
attention from Silicon Valley companies in the US. Nina, winner of the 2013 Safer Internet
Youth Achievement Award (in association with Microsoft), states Nick D’Aloisio is her 10
inspiration. Aged just 18, D’Aloisio sold his company Summly to Yahoo for a reported $30m.
(Source: adapted from © 2017 Women’s Business Council)

9
*P50799A0920* Turn over

7 Explain two entrepreneurial characteristics demonstrated by Nina Devani when
starting DevaniSoft.

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 7 = 6 marks)

10
*P50799A01020*

8 (a) Explain two reasons why Nina may have had to use a venture capitalist to raise
£10 000 to fund her start-up of DevaniSoft.
(6)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................................................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11
*P50799A01120* Turn over

(b) Analyse two ways ICT can be used to help DevaniSoft carry out market research.
(6)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 8 = 12 marks)

12
*P50799A01220*

9 (a) Last year DevaniSoft’s revenue was £141 600 with a gross profit of £117 600.
Using these figures, calculate, to 2 decimal places, the gross profit margin for
DevaniSoft. (Show your working.)
(4)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................................................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13
*P50799A01320* Turn over

(b) Nina is currently working on a secure solution for the banking industry. This will
be a new app and her third product.
Assess whether penetration pricing is the most suitable pricing strategy to use
when launching this new app.
(8)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14
*P50799A01420*

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 9 = 12 marks)

15
*P50799A01520* Turn over

10 Evaluate the extent to which DevaniSoft is a product orientated business.
(12)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16
*P50799A01620*

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 10 = 12 marks)

17
*P50799A01720* Turn over

11 Evaluate the impact of e-commerce on DevaniSoft.
(14)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18
*P50799A01820*

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 11 = 14 marks)

TOTAL FOR SECTION B = 56 MARKS

TOTAL FOR PAPER = 80 MARKS

19
*P50799A01920*

BLANK PAGE

Every effort has been made to contact copyright holders to obtain their permission for the use of copyright material.
Pearson Education Ltd. will, if notified, be happy to rectify any errors or omissions and include any such rectifications in
future editions.

20
*P50799A02020*
Write your name here
Surname Other names

Pearson Edexcel Centre Number Candidate Number

International
Advanced Level

Business Studies
International Advanced Subsidiary
Unit 1: Business Enterprise

Monday 8 January 2018 – Morning Paper Reference

Time: 1 hour 30 minutes WBS01/01

You do not need any other materials. Total Marks

Instructions
• Use black ink or ball-point pen.
• centrethe
Fill in boxes at the top of this page with your name,
number and candidate number.
• Answer all questions in Section A and Section B.
• –Answer the questions in the spaces provided
there may be more space than you need.

Information
• The total mark for this paper is 80.
• T–heusemarks for each question are shown in brackets
this as a guide as to how much time to spend on each question.
• and grammar,
In your responses, you should take particular care with punctuation
as well as the clarity of your expression.
• Calculators may be used.
Advice
• Read each question carefully before you start to answer it.
• Checkanswer
Try to every question.
• your answers if you have time at the end.

Turn over

*P54527A0120*
P54527A
©2018 Pearson Education Ltd.

1/1/1

SECTION A
Answer ALL the questions in this section.
Write the letter of your chosen answer in the box and then explain your choice in
the space provided.
You should spend 30 minutes on this section. Use the data to support your answers
where relevant. You may annotate and include diagrams in your answers.
1 UK fashion manufacturer Sewport Ltd needs a new machine costing £125 000 to cut
fabric for its clothes production lines.
(a) Which one of the following would be the most appropriate source of finance?
(1)
A Trade credit
B Overdraft
C Leasing
D Debenture

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 1 = 4 marks)

2
*P54527A0220*

2 Sony has launched the long awaited next generation PlayStation Pro games console,
which uses newly developed technology.
(a) What is the most appropriate pricing strategy for the new PlayStation?
(1)
A Predatory pricing
B Price skimming
C Cost-plus pricing
D Competitive pricing

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 2 = 4 marks)

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3 Shampoos are often differentiated by features such as ‘with tea tree oil’ or ‘with sea
algae and minerals’.
(a) The most likely reason for shampoo manufacturers to use product differentiation
is to
(1)
A reduce production costs
B appeal to the mass market
C give a competitive advantage
D predict demand for a new product

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 3 = 4 marks)

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4 In 2016, Cineworld cinema chain reported a worldwide increase in box office revenue
of 7.9%, whilst its retail sales of popcorn increased by 8.5%.
(a) Which one of the following is the most likely reason for the increase in popcorn
sales?
(1)
A Ice cream prices were reduced
B Popcorn is linked to obesity
C Incomes were falling
D It is a complementary product

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 4 = 4 marks)

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5 Samsung announced a worldwide recall of every Galaxy Note 7 smartphone sold
before September 2016 because of reported dangerous faults.
(a) Consumer protection legislation requires that goods and services sold must be
(1)
A guaranteed for life
B produced under Fair Trade agreements
C taxed by the government
D fit for their intended purpose

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 5 = 4 marks)

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6 In July 2016, the pound sterling (£) depreciated against the euro (€) and the
US dollar ($).
(a) The most likely impact of this depreciation on UK businesses would be
(1)
A export prices increase
B export orders increase
C import orders increase
D import prices decrease

Answer

(b) Explain why this answer is correct.

(3)

................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Total for Question 6 = 4 marks)

TOTAL FOR SECTION A = 24 MARKS

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SECTION B
Answer ALL questions in this section.

You should spend 60 minutes on this section.

Evidence A: Srikanth Bolla
Srikanth Bolla was the winner of Social Entrepreneur of the Year in 2016, he is also a
millionaire. His business, Bollant Industries, offers 100% sustainable and environmentally
sensitive products; 60% of the workforce are disabled and 58% of the workforce are
women. 5

Srikanth himself is blind and has had to face many obstacles throughout his life. Coming
from a poor farming background in the south of India, he had to fight the government to
follow a science course at school. When he was later refused entry to Indian universities,
Srikanth became the first international blind student to be admitted to the prestigious
Massachusetts Institute of Technology (MIT) in the US. 10

(Sources: adapted from © Youth Business International

and © YourStory Media Private Limited)

Evidence B: Bollant Industries

“Even while studying at MIT, I had a vision for myself – I wanted to create a social
enterprise addressing three primary areas of concern to me: increasing pollution through
indiscriminate use of plastics and harmful chemicals; lack of employment opportunities
for India’s 80 million disabled people; and improving the livelihoods of Indian farmers.” 5

Srikanth is the CEO of Hyderabad-based Bollant

Industries, a private limited company launched
in 2012. It manufactures eco-friendly, disposable
consumer packaging solutions.
His research showed that creating products from 10
recycled agricultural materials could be a
sustainable and viable business.
One of the first materials he started using was the Areca (betel) nut. It is typically
harvested by farmers in the Southern states of India as a commercial crop but they do
not use the entire nut: leaf sheaths that were once discarded are now used by Bollant 15
Industries to create an eco-friendly alternative to plastic tableware.
Since its launch, the company has also developed a line of containers from recycled
paper. Not wanting to continue using chemicals in production, Srikanth created his
own line of alternative, eco-friendly glues and adhesives to use in their manufacturing
processes. 20

Bollant Industries is also creating positive experiences for others in the supply chain. To
date, the company has contributed to 800 jobs indirectly. Areca nut farmers benefit from
an additional source of stable income. By creating sustainable alternatives to plastic,
Bollant Industries has replaced roughly 700 tonnes of plastic waste within three years.
(Source: adapted from © Youth Business International)

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Evidence C: Growth and Investment

Business angel, Ravi Mantha, was so impressed with Srikanth’s business acumen and his
vision for the business that he not only decided to mentor him but also invested in the
company. Several other angel investors are now involved, including Kirin Grandhi of GMR
Group and Ratan Tata of Tata Industries. 5

They are raising $2m in funding and have already raised $1.4m.
In 2016, Bollant Industries has four factories, one each in Hubli and Nizamabad, and two
in Hyderabad. A large new factory, in Sri City, is under construction and will be 100%
solar powered.
Bollant Industries achieved a turnover of $330 000 in less than 3 years. Further growth 10
is planned and it is expected to grow into a $13m turnover company by 2018. This will
expand opportunities for disabled people in India.
(Source: adapted from © Youth Business International)

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BLANK PAGE

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7 Explain two entrepreneurial characteristics that Srikanth Bolla has demonstrated.