Making the Business Effective (Edexcel GCSE Business)

Exam Questions

2 hours27 questions
12 marks

Which two of the following are elements of the marketing mix?

Select two answers.

  • Payment

  • Planning

  • Price

  • Product

  • Profit

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21 mark

Which one of the following is a characteristic of a sole trader?

Select one answer.

  • They require a business qualification

  • They have unlimited liability

  • They can sell shares to raise finance

  • They do not employ staff

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32 marks

Case Study

Stand up paddleboarding is a sport which is similar to surfing but the riders use a paddle whilst standing on the board. Joe Thwaites opened Loco in 2012 as he spotted a gap in the market manufacturing stand up paddleboards (SUPs). Joe felt that he could compete using innovative designs and by changing the shape of the SUPs he made. He spent a few weeks in Fuerteventura, Spain, working with professional SUP riders where he developed designs for three Loco boards.

Since then Loco has surrounded itself with creative talent. This includes world class SUP shapers, graphic designers and team riders, who compete in competitions using its boards. Within months of its new SUPs becoming available, one of the team went on to win the British National Championship and represent Team GB in the World Championships.

Loco now sells an extensive range of SUPs, surf and kite boards throughout the UK and Europe and is ready to further extend its brand. Joe feels that the use of digital marketing using social media is vital in this growth. This combination of creative marketing and Joe’s active role in the business, by offering advice to customers, has provided him with a firm belief that Loco can compete against larger manufacturers.

Outline one way that a business plan could have helped Joe Thwaites when starting Loco.

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41 mark

Which one of the following is a disadvantage of starting a partnership?

Select one answer.

  • Business owners have different skills

  • Can be easier to raise finance

  • Business decisions affect all partners

  • Financial information is kept private

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52 marks

Outline one disadvantage to a small business of operating as a private limited company.

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62 marks

Outline one benefit to a small business owner of running a franchise.

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72 marks

Which two of the following types of business ownership typically have unlimited liability?

Select two answers.

  • Private limited companies

  • Franchises

  • Sole Traders

  • PLCs

  • Partnerships

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82 marks

Outline one reason why a sole trader may choose to become a partnership.

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91 mark

Alana believes there is a market for dog sitting services in her local area and has carried out a survey. Some of the results are shown below.

What is the most important factor in your decision to choose a dog sitting service?

 

% of responses

Price of the service

14

Quality of the service

38

Advertisements for the service

13

Locations covered by the service

35

According to the table, which one element of the marketing mix should Alana focus on when marketing her business?

  • Price

  • Place

  • Promotion

  • Product

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101 mark

State one impact of technology on the marketing mix.

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112 marks

Which two of the following are commonly included in a business plan?

Select two answers.

  • Invoices and receipts from purchases and sales

  • A copy of a design for a business card

  • A cash-flow forecast

  • An overview of the businesses main objectives

  • Application forms from job applicants

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122 marks

Case Study

Last Course Patisserie Ltd is a small private limited company based in Devon which produces hand-made desserts and puddings. The business was established in 1986. Its owners previously worked in the food industry but felt they could offer better value for money to customers. All of the desserts are made fresh to order which has provided Last Course Patisserie with a reputation for being flexible when meeting customer needs.

Getting the best ingredients for the desserts is a vital part of the business. Last Course Patisserie found excellent suppliers of free range eggs and dairy products close to its business location. This means all ingredients could be delivered quickly when needed.

Last Course Patisserie has recently employed a new head chef from Switzerland who has introduced a new range of products to the menu. This has proved to be very popular with customers and the business now struggles to keep up with demand. Last Course Patisserie is receiving increased orders for desserts but, due to the size of its business premises, struggles to meet this increase in demand. The owners have decided that it is the right time for Last Course Patisserie to expand and possibly relocate to new premises

Outline one factor that is likely to determine Last Course Patisserie's pricing strategy.

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1
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3 marks

Explain one benefit to an entrepreneur of buying a franchise to start a business.

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2
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3 marks

Explain one reason why it is important to include financial information in a business plan.

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3
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3 marks

Explain one disadvantage of starting a small business as a partnership.

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4
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3 marks

Explain one way the marketing mix of a small business may change due to changing consumer needs.

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5
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3 marks

Explain one way an entrepreneur can reduce the risk of failure when starting a new business.

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6
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6 marks

Case Study

Last Course Patisserie Ltd is a small private limited company based in Devon which produces hand-made desserts and puddings. The business was established in 1986. Its owners previously worked in the food industry but felt they could offer better value for money to customers. All of the desserts are made fresh to order which has provided Last Course Patisserie with a reputation for being flexible when meeting customer needs.

Getting the best ingredients for the desserts is a vital part of the business. Last Course Patisserie found excellent suppliers of free range eggs and dairy products close to its business location. This means all ingredients could be delivered quickly when needed.

Last Course Patisserie has recently employed a new head chef from Switzerland who has introduced a new range of products to the menu. This has proved to be very popular with customers and the business now struggles to keep up with demand. Last Course Patisserie is receiving increased orders for desserts but, due to the size of its business premises, struggles to meet this increase in demand. The owners have decided that it is the right time for Last Course Patisserie to expand and possibly relocate to new premises

Analyse the impact on Last Course Patisserie of operating as a private limited company.

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7
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6 marks

Case Study

Sports Tours Ltd was established in 1989 and is one of the leading online specialist sports tour operators in the United Kingdom. It arranges tours for teams to destinations in the United Kingdom and Europe in sports such as football, rugby, hockey and netball. The business not only organises travel, accommodation and meals, but it also arranges games and entry to tournaments for the sports team whilst on tour

Sports Tours Ltd has very high standards. It carries out full risk assessments for all tours including possible pre-tour inspection visits. Tours are licensed and authorised through official agencies. All tours have regular contact with a member of staff from Sports Tours Ltd.

In recent years the business has faced increasing competition. This is not only from other sports tour operators but also from teams organising their own tours. Changing levels of consumer income and exchange rates have also had an impact on demand for tours by sports teams.

Sports Tours Ltd are confident that the high level of service they offer will help them to remain competitive. However, it is always looking for more ways to add value to its business activities.

Analyse the impact of the internet on the location of Sports Tours Ltd’s premises.

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83 marks

Explain one drawback for a small business owner of running a franchise.

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93 marks

Explain one factor that would be likely to affect the choice of location for a small restaurant.

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106 marks

Discuss the impact of technology on elements of a small businesses marketing mix.

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113 marks

Explain how one stakeholder group may make use of a business plan.

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126 marks

Discuss the reasons why an entrepreneur would include market research in their start-up business plan.

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1
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12 marks

Case Study

Aphrodite is a clothes shop that was formed in 1994 by two brothers, Andrew and Duncan McKenzie. They opened the shop because they had a lifelong enthusiasm for new fashion.

Andrew and Duncan visit Paris, Milan and London each year to buy their stock. They aim to buy well-known brands, such as Stone Island and Hugo Boss, and to also stock clothes from new designers. This range of stock helps provide them with an advantage over their competition.

Customer service has always been an important part of Aphrodite’s success. A polite and friendly attitude greets all customers on arrival at the shop. In 2007 the business launched its website, which sells its range of clothing using e-commerce. The owners looked to maintain existing high standards of service for customers using their website.

A new opportunity was created when the shop premises next to Aphrodite became available to buy. Andrew and Duncan are considering buying the shop in order to convert the two shops into one large premises. They have calculated that this will cost them £250 000 but are undecided on the best way to finance this.

Evaluate the impact of e-commerce on Aphrodite’s marketing mix. You should use the information provided as well as your knowledge of business.

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2
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9 marks

Case Study

That Feeling is a unique barber shop in Potters Bar, Hertfordshire. Its owner, Justin Carr, started the business, aged 25, because of his passion for being a barber. When he left school after his GCSEs he was advised to follow a different career path. However, he wanted to work in a creative industry. This ambition led him to opening a barber shop where his regular customers include England international footballers such as Kyle Walker, Kieran Trippier and Dele Alli.

The unique nature of That Feeling not only comes from the high quality haircuts but also from the way it looks after its customers. They can play on arcade games and get drinks whilst waiting for their appointment. The shop also sells That Feeling branded clothes and vintage glasses frames.

When asked about his business objectives Justin was very clear that non-financial objectives are crucial. Justin stated:

‘It is important to be passionate about what you do and always try to be the best you can. The financial rewards of running a business will come if you get the other things right.’

Justin now acts as a mentor to staff members at That Feeling by giving help and advice about their career. Most of the employees are aged between 19 and 22. Justin feels that if they are given the opportunity to develop their skills they will bring new ideas and creativity to the business.

In order to improve its brand awareness, That Feeling is considering two options:

Option 1: launch its own range of mens grooming products

Option 2: open a mens spa in an adjoining empty retail unit

Justify which one of these two options That Feeling should choose.

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3
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9 marks

Case Study

Stand up paddleboarding is a sport which is similar to surfing but the riders use a paddle whilst standing on the board. Joe Thwaites opened Loco in 2012 as he spotted a gap in the market manufacturing stand up paddleboards (SUPs). Joe felt that he could compete using innovative designs and by changing the shape of the SUPs he made. He spent a few weeks in Fuerteventura, Spain, working with professional SUP riders where he developed designs for three Loco boards.

Since then Loco has surrounded itself with creative talent. This includes world class SUP shapers, graphic designers and team riders, who compete in competitions using its boards. Within months of its new SUPs becoming available, one of the team went on to win the British National Championship and represent Team GB in the World Championships.

Loco now sells an extensive range of SUPs, surf and kite boards throughout the UK and Europe and is ready to further extend its brand. Joe feels that the use of digital marketing using social media is vital in this growth. This combination of creative marketing and Joe’s active role in the business, by offering advice to customers, has provided him with a firm belief that Loco can compete against larger manufacturers.

In order to increase brand awareness, Loco is considering two options:

Option 1: introduce a range of paddle boards aimed at the youth market

Option 2: launch a range of branded Loco training and leisurewear

Justify which one of these two options Loco should choose.

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