GCSE Business Exam Preparation Guide

Hello, if you're new to the channel, welcome and thanks for coming over and if you're returning, I'm so glad to have you back. This video will be a walkthrough paper one GCSE Edexcel business, which is called Investigating Small Business. You'll be able to see the structure of each section in the paper and also you'll be able to pause the video and attempt each question too. And as we know, practicing past paper questions is crucial for exam success. The paper two walkthrough will follow this. So I'd like to encourage you to like and subscribe to the channel and also click on that notification bell so you know when that video and future videos come out. So for paper one investigating small business you need to answer all questions. You have an hour and a half to complete the paper and the total amount of marks is 90. The paper is divided into three sections. Section A, section B and section C. Section A does not contain a case study and you should perhaps spend around 25 minutes or so on section A. You might want to approach section B first followed by section C because they have case studies associated with it and That will take up more of your time because you need to obviously apply your answer to the case study and take time and read the case study, etc. So you might want to start with Section B, then go to Section C and then go back to Section A. However, in this video we will go in order of the paper so you can look at the structure, you can see how the questions are structured and so forth. So we'll start off with section A and then we will go to B and then C. Section A, so there isn't a case study associated with section A. So for section A we start off with a multiple choice question. Which one of the following is a short-term source of finance? Retained profit, share capital, trade credit or venture capital? I'll be showing you the answer shortly. And the answer is C, trade credit. Next question. Which one of the following is a definition of an exchange rate? The flow of goods and services into a country. The value of one currency in terms of another currency. A tax on a particular good or service. When businesses operate on an international scale. And the answer is B. The value of one currency in terms of another currency. Now on to our first three mark question. Now if you're not sure how to answer particular exam questions then please do check the link in the description box where you'll find information on how to answer the three marker, both six markers, the nine marker and also the 12 marker. Explain one benefit to an entrepreneur of buying a franchise to start a business. So you do need to focus on the question. The question is asking you to explain the benefit of a franchise to an entrepreneur. So give it a go. Now for this answer, you are awarded one mark for identifying the benefit, plus two further marks for explaining this benefit, and that's using your strands. So an entrepreneur could receive support and training, that could have been one of your links. This means they are less likely to make poor business decisions. Another point is which reduces the chance of business failure. So the entrepreneur could benefit from national advertising campaigns because they have access to. a larger advertising budget and this means the business will have increased brand awareness. So hopefully you can see that there's a chain there of analysis. So our next three mark question, remember there are six of these in your paper and there isn't a case study so you're not attempting to use context at all. Explain one way a small business could use market segmentation to target customers. You need to ensure that you're explaining one way. and not explaining a benefit or a drawback. You're explaining a process. So you can give it a go. So on to the answer. So you might have started off by saying a small business could use market segmentation by using gender, or you might have referred to demographics or location. But here it's showing an example for gender. Other... appropriate answers are acceptable too. Different products can be targeted to customers depending on if they're a male or female. This will lead to a business being able to meet the needs of those particular customers. Or a small business could segment a market using income, people with a higher level of income. are more likely to buy luxury goods. This means a business could develop a higher quality product to target these customers. Another multiple choice question. This question is asking which two of the following are elements of the marketing mix and two is in bold. You need to select two answers. Payment, planning, price, product, profit. So give that a try. And the answers are price and product. Again, which two of the following areas are covered by employment law? You need to select two answers. Consumer rights, discrimination, e-commerce, health and safety, quality of products. Let's take a look at the answers. So the answers are discrimination and health and safety. On to our first calculation question. Calculate questions are worth eight marks per examination paper. And if you do have sufficient time in the exam, please do double check your answers for accuracy. Table 1 contains information about a small business for one month. The business sold 340 units in this month. So the fixed costs were £3,600 and the variable cost per unit were £9. You are asked to use the information in Table 1 to calculate the total cost for one month and you are advised to show your workings. So give this one a try. And the answer is 6,660. Another three mark question. Explain one possible non-financial aim an entrepreneur may have when starting a small business. Now for this question, you're not asked to explain the advantages and disadvantages of a non-financial method. You're asked to explain one possible non-financial aim an entrepreneur may have. You do need to ensure that your strands relate to the features of the non-financial aim. So give this one a try. Let's take a look at the answer. You might have written something like this. An entrepreneur may wish to gain personal satisfaction from starting a business. This is because they may feel that they have achieved something in life, which is based on the hard work they put into starting a business. Or a non-financial aim could be independence. An entrepreneur is able to make their own decisions when starting a business instead of being told what to do as an employee. So you might have had this or some variation and the examiners would take that on board. Another three mark question. Explain one disadvantage to a small business of using qualitative data for market research. This question is not asking for a disadvantage of market research. but a disadvantage of qualitative research. So have a try. So as you can see you're awarded one mark for identifying a disadvantage and two further marks for explaining the disadvantage. You might have said responses are based on a person's opinions. This means they can be varied, therefore making it difficult to make a judgment on customer preferences. Qualitative data is mostly non-numeric. This makes it difficult to analyse the data. This can mean it is difficult to make decisions based on this data. Next question. Which one of the following is an example of a cash outflow for a small business? Select one answer. Bank loan, personal savings, raw materials or receipts? And the answer is raw materials. Another calculation question. Using the information in figure one, calculate the total profit for the period January to March. So ensure that you are calculating from January to March and not just focusing on one of the months. You are advised to show your workings. So workings have been shown there and the final answer is £6,000. On to the next question. Explain one benefit to a small business of understanding customer needs. So you need to identify the benefit and explain it with two strands. So give it a go. You might have written one benefit to a small business of understanding customer needs is that it can set a suitable price. This means that customers are more likely to buy the product. This will generate more revenue for the business or. The small business can develop the quality of the product to meet customer needs. This means that the business can gain a competitive advantage, which allows the business to gain a larger market share. Let's move on. Our final three mark question in the paper. Explain one reason why it is important to include financial information in a business plan. Give it a go. You could have written this will help minimise risk. Financial information such as a cash flow forecast can help identify potential problems. This will allow the business to plan for these problems in advance or the financial information can help. the business to obtain finance because the figures can be reviewed by a bank. Therefore the bank can then make a judgment whether the business can repay the loan or not. So you might have had that answer or any other appropriate response. Our first six marker it's a discuss question. Discuss the importance of cash to the survival of a small business. If you're not sure about the structure of the six mark discuss question There is an example, there is information about the structure in the video in the description box. Give this question a try. So the possible answers read as follows. Having access to cash will allow the business to pay its suppliers on time. Having a positive net cash flow will prevent insolvency in a small business. If a business fails to pay its suppliers on time, then they will lose trust and will not allow the business to purchase goods. using credit, like trade credit. Without cash, a business will struggle to pay running costs, such as wages and rent. This could cause the business to close down. We're now moving on to section B. Now, all of the questions will be requiring you to include application, amongst other skills, but you need to ensure your answers are totally related to the case study. So we don't have this in section A with the case study, there isn't one. So now for section B and also for section C you will need to include application. This is a case study that will be used in section B. If you're not sure how to apply context in your answers then please do check out the video on application. It will be in the description box, very useful and it can help you gain those marks. that many students lose out on in section b and c. On to our first question in section b. I would always advise you when it comes to section b and c to read the questions first and then read the case study. And then what you do once you're reading the case study and just reading through it, underline key information that links to a particular question. So it will save you time when you have to go back and find it. This two marker reads as follows, outline one risk taken by the owners when starting last course patisserie. So you need to choose a risk that is relevant to the business and you also need to develop your point, develop the method by showing application. So remember all of your answers for section B and C must have application. Give this one a go. The answer. You may have had the owner's risk a loss of security as they had previously had jobs in the food industry. So you can see that there's application to the case study there because it refers to the food industry. Or you might have had the owner's risk financial loss. There may have not been a demand for handmade desserts. Again, you can see the link of application to the context. We're now looking at a six mark analysed question. And for the six more analysed questions, the examiners are looking for five linked strands. They need to be accurate. They need to have development. And it could come from one or two points or impacts. The question reads as follows. Analyse the impact on last course patisserie of operating as a private limited company. So give this question a go and don't forget to link it to the case study. You've got to get your application marks. So you should pause the video now because we're going to go on to the answer. So the possible answer to the analysed question. It can make it easier to raise finance for the business expansion as it can sell shares. Shareholders may not agree about the most suitable location for the possible new premises. The business will require increased funds. to increase the production of the desserts on the new menu. This will include the purchase of new machinery. It could be felt that it would be better to move the premises closer to the market, whilst others would argue it is better to stay closer. to the excellent suppliers. Hopefully you can see the application in there as well. On to a calculation question. Last course patisserie has the following financial information for the month of April. Raw materials for each dessert 50p, packaging for each dessert 20p. Fixed cost £2,730 Selling price for each dessert £2 Use the information in table 2 Calculate the level of output required to break even in April You are advised to show your work in Please do show your workings because even if your final answer is wrong, but your workings were correct and just at the very end you made an error, you can still get one mark. So please do show your workings. Let's take a look at the answer. You can see the workings there. The final answer is 2,100 desserts. Another calculation question. In May, suppliers increased the cost of raw materials by 4%. Using the information in table 2, calculate the variable cost per dessert following the increase in the cost of raw materials. You should put the video on pause now. So you can see the workings and the answer is 72p. On to our second analyse question. UK consumer incomes are expected to rise over the next 10 years. Analyse the likely impact on last course patisserie of this changing level of consumer income. So put the video on pause and give this question a go. Let's take a look at the possible answers. Now I do want you to pay attention to the application. People will have higher incomes and are more likely to spend this on luxury goods. This will increase the demand for the handmade desserts application AO2. Higher consumer income will lead to increased demand in the economy. This could therefore lead to an increase in inflation which could mean the price of ingredients for the desserts application may increase. This supports the plans for last course patisserie to expand. The increase in recent demand for the desserts is now likely to be sustained, meaning a longer term investment is less of a risk. If suppliers increase the price of the ingredients, then voca desserts will experience a rise in costs. This could mean they may make less profit for each dessert or have to charge a higher price to their customers. This question is assessing your application skills. The new head chef carried out secondary market research to identify information about the food market. State one benefit to last course patisserie of conducting secondary market research. So give this question a go. Any appropriate response will be awarded a mark. Research into food purchases has already been carried out, thus saving time. So you can see the application there. It is more convenient as it can be difficult finding customers within rural areas such as Devon. Again, application. Sources such as the government provide a validated information on amount of money households spend on food. Again, further application. So you need to ensure that your answers are. are very much tailored to what is happening in the case study, but also it meets the needs of the question. Next question. Outline one impact on a stakeholder group of last course patisserie if it relocates to new premises. Give it a go. Possible answers. Employees will be affected as they may have to travel away from Devon to work at the new location or the owners shareholders will be affected as the new premises will allow increased production of desserts and therefore more sales. Now on to our first nine marker, nine mark justify question. They're typically written like this, you've got two options, option one and option two. In order to increase the number of desserts that can be produced to meet the extra demand, Last course patisserie is considering two options. Option one, investing in new machinery. Option two, employing more staff. Justify which one of these options last course patisserie should choose. Now, when it comes to nine markers, there's no requirement for you to consider both options in your answer. You can still achieve nine marks from considering one option only. You can pause the video now and attempt this question. Machinery can work more quickly than employees which will increase the rate of production. Employing more staff allows last course patisserie to continue using existing production methods. An increased rate of production will allow more desserts to be produced in the same amount of time. This will reduce the average cost of making each dessert. Last course patisserie can then decide to maintain existing price and more profit per dessert. or reduce its price to gain competitive advantage over other handmade products. Last course patisserie can be flexible when making its products because they are handmade. If it continues to make the desserts by hand then this can be seen as a quality feature which adds value to the food. Now on to the evaluation AO3B and how you can gain those three marks. Investing in machinery involves high initial costs. This invested may therefore be wasted because the increased demand for the desserts may not be sustainable. This could still be made comfortably by hand if there were more employees and more space. Another point. If the business continues to expand, then the use of machinery may become inevitable. If levels of demand for the new menu continue to rise, then employee only production will not be able to supply the market with enough desserts. Let's get on to section C. With section C we have a new case study. So again go straight to the question and then to the case study. So our first question is a one marker. State one way Aphrodite could use social media. You may want to... pause here whilst I proceed. So the answers to this question does again need to be tied into the case study. So Facebook could show images of new clothing, Twitter could be used to provide links to a new designer. We have a one mark identify question. Identify questions require candidates to read off a graph or interpret table. This question reads as follows. Identify from table three which month. was best for Aphrodite to import clothes from Paris so your answer only required you to write a month not a sentence. So you can pause the video now and answer the question and the answer is September. Outline one reason why Aphrodite's range of stock could give it an advantage over its competitors. So again, very much linking to the case study. So you can pause the video now and give this question a go. Possible answers. Aphrodite can stock a range of clothes that no other shop has. This will attract customers who like buying new fashion. Or new designers may offer special discounts to Aphrodite to stock their clothes. This gives Aphrodite a cost advantage over competition. So those are the types of answers they're looking for. or any other appropriate type of answer. On to our final nine marker in the paper. To pay for the conversion of the premises, Aphrodite is considering two options. Option one, obtaining a bank loan or option two, crowdfunding. Justify which one of these two options Aphrodite should choose. So just as before you can gain full marks for your nine marker by considering the pros and cons of one option so long as you have application analysis and evaluation in there so pause the video and give it a go a loan is an external source of finance which means that the brothers can use retained profit at a later date crowdfunding is a source of finance that will not require any interest to be paid when financing the conversion figure two shows that interest rates are very low. It makes financial sense to take advantage of this and obtain a loan. The interest rate will be fixed so Aphrodite will continue to benefit from the low rate for the full duration of the loan. If no interest is paid on finance then Aphrodite can keep its costs low. This will be beneficial as it goes through a period of change. It is better to use crowdfunding to grow the business. as it reduces financial risks. However, despite the previous success of Aphrodite, the bank may be reluctant to provide a loan. Even if the bank agrees, it will require financial plans for the expansion and may even ask for security from Aphrodite to secure the loan. Another, however, or on the other hand, Aphrodite is expanding the premises for the first time. They may encounter unexpected building problems when they start to convert next door. If the brothers do not raise enough money through crowdfunding, then they will not be able to cover any additional costs. And finally the 12 marker, the big mark question of the paper. This question assesses all four assessment objectives. They assess you on your understanding, your analysis, your application and evaluation. Unfortunately some students do not get to finish the 12 marker because they run out of time. So again that is why I did suggest that you start off with section b followed by c and then answer section a let's take a look at this 12 mark question evaluate the impact of e-commerce on aphrodite's marketing mix you should use the information provided as well as your knowledge of business and if you are not sure how to answer 12 mark question do check out the video in the description box Pause now and attempt the question. Let's see what the mark scheme shows. E-commerce will allow Aphrodite to sell its clothes to a wider market. The clothes market is very competitive, so using e-commerce may have a limited effect on sales. The website has been operating since 2007, allowing customers from all over the world to buy clothes from Aphrodite. Many other clothes shops sell labels such as Stone Island and Hugo Boss. This will make it difficult to attract the attention of new customers. The full range of clothes with all sizes can be displayed on the website. If the website is well designed and the ordering returns as easy for customers, then sales should increase because new customers will be confident that the service they receive from the website matches the high service levels they would have received in person. In order to attract new customers, then the brothers may be price competitive. This would mean lowering their prices and reducing the profit margins on the clothes. Suppliers, however, may not allow them to do this as cheaper prices can harm the image of a brand. However, customers may be reluctant to purchase clothes using e-commerce because they are unable to try the clothes on to ensure that they fit. Aphrodite sell expensive brands so customers may not want to spend large sums of money if they cannot check the fit and quality first. However, another however point, many people live busy lives and may not be able to go shopping as much as they would like. E-commerce would still lead to increased sales with existing customers as they would shop online. They trust the business And as long as the website offers excellent service, they will appreciate the convenience it offers. I hope you got on well with that question and the others in the paper. If for any reason you didn't, then you can always watch it again and watch particular parts of the video so that you can keep on practising particular questions. I wish you the very best of luck in your studies.

And as we know, practicing past paper questions is crucial for exam success. The paper two walkthrough will follow this. So I'd like to encourage you to like and subscribe to the channel and also click on that notification bell so you know when that video and future videos come out. So for paper one investigating small business you need to answer all questions. You have an hour and a half to complete the paper and the total amount of marks is 90. The paper is divided into three sections.

Section A, section B and section C. Section A does not contain a case study and you should perhaps spend around 25 minutes or so on section A. You might want to approach section B first followed by section C because they have case studies associated with it and That will take up more of your time because you need to obviously apply your answer to the case study and take time and read the case study, etc.

So you might want to start with Section B, then go to Section C and then go back to Section A. However, in this video we will go in order of the paper so you can look at the structure, you can see how the questions are structured and so forth. So we'll start off with section A and then we will go to B and then C. Section A, so there isn't a case study associated with section A. So for section A we start off with a multiple choice question. Which one of the following is a short-term source of finance?

Retained profit, share capital, trade credit or venture capital? I'll be showing you the answer shortly. And the answer is C, trade credit.

Next question. Which one of the following is a definition of an exchange rate? The flow of goods and services into a country. The value of one currency in terms of another currency.

A tax on a particular good or service. When businesses operate on an international scale. And the answer is B. The value of one currency in terms of another currency. Now on to our first three mark question.

Now if you're not sure how to answer particular exam questions then please do check the link in the description box where you'll find information on how to answer the three marker, both six markers, the nine marker and also the 12 marker. Explain one benefit to an entrepreneur of buying a franchise to start a business. So you do need to focus on the question. The question is asking you to explain the benefit of a franchise to an entrepreneur. So give it a go.

Now for this answer, you are awarded one mark for identifying the benefit, plus two further marks for explaining this benefit, and that's using your strands. So an entrepreneur could receive support and training, that could have been one of your links. This means they are less likely to make poor business decisions. Another point is which reduces the chance of business failure. So the entrepreneur could benefit from national advertising campaigns because they have access to.

a larger advertising budget and this means the business will have increased brand awareness. So hopefully you can see that there's a chain there of analysis. So our next three mark question, remember there are six of these in your paper and there isn't a case study so you're not attempting to use context at all.

Explain one way a small business could use market segmentation to target customers. You need to ensure that you're explaining one way. and not explaining a benefit or a drawback. You're explaining a process. So you can give it a go.

So on to the answer. So you might have started off by saying a small business could use market segmentation by using gender, or you might have referred to demographics or location. But here it's showing an example for gender. Other...

appropriate answers are acceptable too. Different products can be targeted to customers depending on if they're a male or female. This will lead to a business being able to meet the needs of those particular customers.

Or a small business could segment a market using income, people with a higher level of income. are more likely to buy luxury goods. This means a business could develop a higher quality product to target these customers. Another multiple choice question. This question is asking which two of the following are elements of the marketing mix and two is in bold.

You need to select two answers. Payment, planning, price, product, profit. So give that a try.

And the answers are price and product. Again, which two of the following areas are covered by employment law? You need to select two answers. Consumer rights, discrimination, e-commerce, health and safety, quality of products.

Let's take a look at the answers. So the answers are discrimination and health and safety. On to our first calculation question.

Calculate questions are worth eight marks per examination paper. And if you do have sufficient time in the exam, please do double check your answers for accuracy. Table 1 contains information about a small business for one month.

The business sold 340 units in this month. So the fixed costs were £3,600 and the variable cost per unit were £9. You are asked to use the information in Table 1 to calculate the total cost for one month and you are advised to show your workings.

So give this one a try. And the answer is 6,660. Another three mark question. Explain one possible non-financial aim an entrepreneur may have when starting a small business. Now for this question, you're not asked to explain the advantages and disadvantages of a non-financial method.

You're asked to explain one possible non-financial aim an entrepreneur may have. You do need to ensure that your strands relate to the features of the non-financial aim. So give this one a try. Let's take a look at the answer. You might have written something like this.

An entrepreneur may wish to gain personal satisfaction from starting a business. This is because they may feel that they have achieved something in life, which is based on the hard work they put into starting a business. Or a non-financial aim could be independence. An entrepreneur is able to make their own decisions when starting a business instead of being told what to do as an employee. So you might have had this or some variation and the examiners would take that on board.

Another three mark question. Explain one disadvantage to a small business of using qualitative data for market research. This question is not asking for a disadvantage of market research.

but a disadvantage of qualitative research. So have a try. So as you can see you're awarded one mark for identifying a disadvantage and two further marks for explaining the disadvantage.

You might have said responses are based on a person's opinions. This means they can be varied, therefore making it difficult to make a judgment on customer preferences. Qualitative data is mostly non-numeric. This makes it difficult to analyse the data.

This can mean it is difficult to make decisions based on this data. Next question. Which one of the following is an example of a cash outflow for a small business? Select one answer.

Bank loan, personal savings, raw materials or receipts? And the answer is raw materials. Another calculation question.

Using the information in figure one, calculate the total profit for the period January to March. So ensure that you are calculating from January to March and not just focusing on one of the months. You are advised to show your workings. So workings have been shown there and the final answer is £6,000.

On to the next question. Explain one benefit to a small business of understanding customer needs. So you need to identify the benefit and explain it with two strands. So give it a go.

You might have written one benefit to a small business of understanding customer needs is that it can set a suitable price. This means that customers are more likely to buy the product. This will generate more revenue for the business or. The small business can develop the quality of the product to meet customer needs. This means that the business can gain a competitive advantage, which allows the business to gain a larger market share.

Let's move on. Our final three mark question in the paper. Explain one reason why it is important to include financial information in a business plan.

Give it a go. You could have written this will help minimise risk. Financial information such as a cash flow forecast can help identify potential problems.

This will allow the business to plan for these problems in advance or the financial information can help. the business to obtain finance because the figures can be reviewed by a bank. Therefore the bank can then make a judgment whether the business can repay the loan or not.

So you might have had that answer or any other appropriate response. Our first six marker it's a discuss question. Discuss the importance of cash to the survival of a small business. If you're not sure about the structure of the six mark discuss question There is an example, there is information about the structure in the video in the description box. Give this question a try.

So the possible answers read as follows. Having access to cash will allow the business to pay its suppliers on time. Having a positive net cash flow will prevent insolvency in a small business.

If a business fails to pay its suppliers on time, then they will lose trust and will not allow the business to purchase goods. using credit, like trade credit. Without cash, a business will struggle to pay running costs, such as wages and rent. This could cause the business to close down. We're now moving on to section B.

Now, all of the questions will be requiring you to include application, amongst other skills, but you need to ensure your answers are totally related to the case study. So we don't have this in section A with the case study, there isn't one. So now for section B and also for section C you will need to include application. This is a case study that will be used in section B. If you're not sure how to apply context in your answers then please do check out the video on application.

It will be in the description box, very useful and it can help you gain those marks. that many students lose out on in section b and c. On to our first question in section b. I would always advise you when it comes to section b and c to read the questions first and then read the case study.

And then what you do once you're reading the case study and just reading through it, underline key information that links to a particular question. So it will save you time when you have to go back and find it. This two marker reads as follows, outline one risk taken by the owners when starting last course patisserie. So you need to choose a risk that is relevant to the business and you also need to develop your point, develop the method by showing application. So remember all of your answers for section B and C must have application.

Give this one a go. The answer. You may have had the owner's risk a loss of security as they had previously had jobs in the food industry. So you can see that there's application to the case study there because it refers to the food industry. Or you might have had the owner's risk financial loss.

There may have not been a demand for handmade desserts. Again, you can see the link of application to the context. We're now looking at a six mark analysed question.

And for the six more analysed questions, the examiners are looking for five linked strands. They need to be accurate. They need to have development. And it could come from one or two points or impacts. The question reads as follows.

Analyse the impact on last course patisserie of operating as a private limited company. So give this question a go and don't forget to link it to the case study. You've got to get your application marks. So you should pause the video now because we're going to go on to the answer.

So the possible answer to the analysed question. It can make it easier to raise finance for the business expansion as it can sell shares. Shareholders may not agree about the most suitable location for the possible new premises. The business will require increased funds. to increase the production of the desserts on the new menu.

This will include the purchase of new machinery. It could be felt that it would be better to move the premises closer to the market, whilst others would argue it is better to stay closer. to the excellent suppliers.

Hopefully you can see the application in there as well. On to a calculation question. Last course patisserie has the following financial information for the month of April. Raw materials for each dessert 50p, packaging for each dessert 20p.

Fixed cost £2,730 Selling price for each dessert £2 Use the information in table 2 Calculate the level of output required to break even in April You are advised to show your work in Please do show your workings because even if your final answer is wrong, but your workings were correct and just at the very end you made an error, you can still get one mark. So please do show your workings. Let's take a look at the answer.

You can see the workings there. The final answer is 2,100 desserts. Another calculation question.

In May, suppliers increased the cost of raw materials by 4%. Using the information in table 2, calculate the variable cost per dessert following the increase in the cost of raw materials. You should put the video on pause now.

So you can see the workings and the answer is 72p. On to our second analyse question. UK consumer incomes are expected to rise over the next 10 years. Analyse the likely impact on last course patisserie of this changing level of consumer income. So put the video on pause and give this question a go.

Let's take a look at the possible answers. Now I do want you to pay attention to the application. People will have higher incomes and are more likely to spend this on luxury goods. This will increase the demand for the handmade desserts application AO2.

Higher consumer income will lead to increased demand in the economy. This could therefore lead to an increase in inflation which could mean the price of ingredients for the desserts application may increase. This supports the plans for last course patisserie to expand. The increase in recent demand for the desserts is now likely to be sustained, meaning a longer term investment is less of a risk. If suppliers increase the price of the ingredients, then voca desserts will experience a rise in costs.

This could mean they may make less profit for each dessert or have to charge a higher price to their customers. This question is assessing your application skills. The new head chef carried out secondary market research to identify information about the food market.

State one benefit to last course patisserie of conducting secondary market research. So give this question a go. Any appropriate response will be awarded a mark.

Research into food purchases has already been carried out, thus saving time. So you can see the application there. It is more convenient as it can be difficult finding customers within rural areas such as Devon. Again, application.

Sources such as the government provide a validated information on amount of money households spend on food. Again, further application. So you need to ensure that your answers are.

are very much tailored to what is happening in the case study, but also it meets the needs of the question. Next question. Outline one impact on a stakeholder group of last course patisserie if it relocates to new premises. Give it a go.

Possible answers. Employees will be affected as they may have to travel away from Devon to work at the new location or the owners shareholders will be affected as the new premises will allow increased production of desserts and therefore more sales. Now on to our first nine marker, nine mark justify question.

They're typically written like this, you've got two options, option one and option two. In order to increase the number of desserts that can be produced to meet the extra demand, Last course patisserie is considering two options. Option one, investing in new machinery.

Option two, employing more staff. Justify which one of these options last course patisserie should choose. Now, when it comes to nine markers, there's no requirement for you to consider both options in your answer. You can still achieve nine marks from considering one option only. You can pause the video now and attempt this question.

Machinery can work more quickly than employees which will increase the rate of production. Employing more staff allows last course patisserie to continue using existing production methods. An increased rate of production will allow more desserts to be produced in the same amount of time.

This will reduce the average cost of making each dessert. Last course patisserie can then decide to maintain existing price and more profit per dessert. or reduce its price to gain competitive advantage over other handmade products.

Last course patisserie can be flexible when making its products because they are handmade. If it continues to make the desserts by hand then this can be seen as a quality feature which adds value to the food. Now on to the evaluation AO3B and how you can gain those three marks.

Investing in machinery involves high initial costs. This invested may therefore be wasted because the increased demand for the desserts may not be sustainable. This could still be made comfortably by hand if there were more employees and more space. Another point. If the business continues to expand, then the use of machinery may become inevitable.

If levels of demand for the new menu continue to rise, then employee only production will not be able to supply the market with enough desserts. Let's get on to section C. With section C we have a new case study. So again go straight to the question and then to the case study.

So our first question is a one marker. State one way Aphrodite could use social media. You may want to... pause here whilst I proceed. So the answers to this question does again need to be tied into the case study.

So Facebook could show images of new clothing, Twitter could be used to provide links to a new designer. We have a one mark identify question. Identify questions require candidates to read off a graph or interpret table. This question reads as follows. Identify from table three which month.

was best for Aphrodite to import clothes from Paris so your answer only required you to write a month not a sentence. So you can pause the video now and answer the question and the answer is September. Outline one reason why Aphrodite's range of stock could give it an advantage over its competitors. So again, very much linking to the case study. So you can pause the video now and give this question a go.

Possible answers. Aphrodite can stock a range of clothes that no other shop has. This will attract customers who like buying new fashion. Or new designers may offer special discounts to Aphrodite to stock their clothes.

This gives Aphrodite a cost advantage over competition. So those are the types of answers they're looking for. or any other appropriate type of answer. On to our final nine marker in the paper. To pay for the conversion of the premises, Aphrodite is considering two options.

Option one, obtaining a bank loan or option two, crowdfunding. Justify which one of these two options Aphrodite should choose. So just as before you can gain full marks for your nine marker by considering the pros and cons of one option so long as you have application analysis and evaluation in there so pause the video and give it a go a loan is an external source of finance which means that the brothers can use retained profit at a later date crowdfunding is a source of finance that will not require any interest to be paid when financing the conversion figure two shows that interest rates are very low. It makes financial sense to take advantage of this and obtain a loan.

The interest rate will be fixed so Aphrodite will continue to benefit from the low rate for the full duration of the loan. If no interest is paid on finance then Aphrodite can keep its costs low. This will be beneficial as it goes through a period of change. It is better to use crowdfunding to grow the business. as it reduces financial risks.

However, despite the previous success of Aphrodite, the bank may be reluctant to provide a loan. Even if the bank agrees, it will require financial plans for the expansion and may even ask for security from Aphrodite to secure the loan. Another, however, or on the other hand, Aphrodite is expanding the premises for the first time.

They may encounter unexpected building problems when they start to convert next door. If the brothers do not raise enough money through crowdfunding, then they will not be able to cover any additional costs. And finally the 12 marker, the big mark question of the paper.

This question assesses all four assessment objectives. They assess you on your understanding, your analysis, your application and evaluation. Unfortunately some students do not get to finish the 12 marker because they run out of time. So again that is why I did suggest that you start off with section b followed by c and then answer section a let's take a look at this 12 mark question evaluate the impact of e-commerce on aphrodite's marketing mix you should use the information provided as well as your knowledge of business and if you are not sure how to answer 12 mark question do check out the video in the description box Pause now and attempt the question.

Let's see what the mark scheme shows. E-commerce will allow Aphrodite to sell its clothes to a wider market. The clothes market is very competitive, so using e-commerce may have a limited effect on sales.

The website has been operating since 2007, allowing customers from all over the world to buy clothes from Aphrodite. Many other clothes shops sell labels such as Stone Island and Hugo Boss. This will make it difficult to attract the attention of new customers.

The full range of clothes with all sizes can be displayed on the website. If the website is well designed and the ordering returns as easy for customers, then sales should increase because new customers will be confident that the service they receive from the website matches the high service levels they would have received in person. In order to attract new customers, then the brothers may be price competitive.

This would mean lowering their prices and reducing the profit margins on the clothes. Suppliers, however, may not allow them to do this as cheaper prices can harm the image of a brand. However, customers may be reluctant to purchase clothes using e-commerce because they are unable to try the clothes on to ensure that they fit.

Aphrodite sell expensive brands so customers may not want to spend large sums of money if they cannot check the fit and quality first. However, another however point, many people live busy lives and may not be able to go shopping as much as they would like. E-commerce would still lead to increased sales with existing customers as they would shop online.

They trust the business And as long as the website offers excellent service, they will appreciate the convenience it offers. I hope you got on well with that question and the others in the paper. If for any reason you didn't, then you can always watch it again and watch particular parts of the video so that you can keep on practising particular questions. I wish you the very best of luck in your studies.

Transcript for:GCSE Business Exam Preparation Guide

Transcript for:
GCSE Business Exam Preparation Guide