1.3. Enterprise, business growth and size
A subsection of Business Studies, 7115, through 1. Understanding business activity
Listing 10 of 16 questions
Terfil Enterprises organises special events such as concerts and music festivals. The founder, Ceri Terfil, converted the business into a private limited company in 2004. ‘We are in a niche market’ said Ceri ‘and have built a reputation for efficiency and low prices. I would like the business to continue to grow in the future’. What is meant by the term ‘niche market’? Identify two objectives that Ceri might have had for his business when he started it. Objective 1: Objective 2: Identify and explain two advantages to Ceri of converting the business to a private limited company. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain three potential problems to Terfil Enterprises of continuing to grow in the future. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: How important are low prices in determining the long term success of Terfil Enterprises? Justify your answer.
7115_s11_qp_12
THEORY
2011
Paper 1, Variant 2
View
Five years ago Manisha started making cakes for celebrations, such as weddings and birthdays, from her home. Now she has a small shop and 3 employees. Product quality is important to her business. Manisha said: ‘I have benefited from the economic boom but I did not expect demand to increase by 500% each year. Somehow I have managed to cope with higher interest rates and all the challenges of being a sole trader. The business is profitable at last but I have to work every day.’ A friend has offered to become Manisha’s business partner. What is meant by an ‘economic boom’? Identify two factors which might affect demand for Manisha’s products. Factor 1: Factor 2: Identify and explain two ways in which higher interest rates might affect Manisha’s business. Way 1: Explanation: Way 2: Explanation: 1 4 Identify and explain two reasons why product quality might be important to Manisha’s business. Reason 1: Explanation: Reason 2: Explanation: Do you think Manisha should have a business partner? Justify your answer. [ 1 4
7115_s17_qp_12
THEORY
2017
Paper 1, Variant 2
View
Dmit is a partner in a small retail clothing business. The business has been successful, but it is finding it difficult to compete against larger retailers. The partners are thinking of converting the partnership into a private limited company. Identify two features of a partnership. Feature 1: Feature 2: Identify two ways of measuring the success of a business. Way 1: Way 2: Identify and explain two reasons why the business might be finding it difficult to compete against larger retailers. Reason 1: Explanation: Reason 2: Explanation: Identify and explain three methods of promotion that the partnership could use to increase sales. Method 1: Explanation: Method 2: Explanation: Method 3: Explanation: Consider the advantages and disadvantages of converting the partnership into a private limited company. Recommend whether the partners should do this. Justify your answer. Advantages: Disadvantages: Recommendation:
7115_w13_qp_11
THEORY
2013
Paper 1, Variant 1
View
Lu is a sole trader. He manages a bakery shop making and selling bread and cakes. He employs 4 workers all of whom are paid on time rate. Lu wants to expand the business by buying a new shop and using it as a café . He also wants to make a wider range of cakes, such as wedding and birthday cakes, for which he thinks there is a demand. At present the business sells all of the bread and cakes it makes. What is meant by a ‘sole trader’? Identify two methods Lu could use for paying employees (other than time rate). Method 1: Method 2: Identify and explain two suitable sources of finance Lu could use to buy a new shop. Source 1: Explanation: Source 2: Explanation: Identify and explain two methods of promotion that Lu could use for the new range of cakes. Method 1: Explanation: Method 2: Explanation: Do you think that Lu’s business will be more profitable if he expands it by opening a café in a new shop? Justify your answer.
7115_w14_qp_11
THEORY
2014
Paper 1, Variant 1
View
DPC operates 200 takeaway pizza shops. Over 75% of its pizzas are ordered through e-commerce. The Managing Director thinks 2017 was a successful year. She said: ‘Looking ahead, there are signs that the economy is growing. However, DPC has a number of challenges. The Government plans to increase the minimum wage to $5 per hour. DPC has to respond to environmental pressures as well. Food waste and litter caused by used pizza boxes are problems. Complaints from the local community about this are too high.’ Identify two ways to measure business success. Way 1: Way 2: Identify two features of a growing economy. Feature 1: Feature 2: Identify and explain two ways in which an increase in the minimum wage could affect DPC. Way 1: Explanation: Way 2: Explanation: 1 1 Identify and explain two advantages to DPC of using e-commerce. Advantage 1: Explanation: Advantage 2: Explanation: Explain two ways in which DPC could respond to environmental pressures. Recommend which of the two options it should choose. Justify your answer. [ 1 1
7115_s18_qp_12
THEORY
2018
Paper 1, Variant 2
View
Just4U manufactures motor car parts. The production methods are capital intensive. The management believes that the company benefits from economies of scale. However, problems with the workers in the factory have led to poor quality production. Despite this, the Managing Director believes that the company must continue to grow if it is to achieve its objectives. The business is planning a takeover of a competitor. What is meant by ‘capital intensive’? Identify two objectives that a business like Just4U might have. Objective 1: Objective 2: Identify and explain two economies of scale from which Just4U could benefit. Economy of scale 1: Explanation: Economy of scale 2: Explanation: Identify and explain two problems that poor quality might create for Just4U. Problem 1: Explanation: Problem 2: Explanation: Do you think that a takeover of a competitor will benefit the shareholders of Just4U? Justify your answer.
7115_w12_qp_12
THEORY
2012
Paper 1, Variant 2
View
Questions Discovered
16