iGCSE - 1.1 - Business Activity

Business Studies – iGCSE
0450
1.1 – Business Activity

How to Answer a Paper 2 Question
Scenario Glossary 1.1.1 1.1.2 1.1.3 1.1.4 Exam Question
1 – Definition
LO2: Be able to prepare a2effective
– Application
Splash Screen3 and
– Analysis
Navigation Screen4 - Evaluation
In relation to XXXX, the YYYY (DEFINITION) is relevant (APPLICATION) to the
business by…
This means that … (ANALYSIS)
Therefor …. (BALANCE FOR ANALYSIS)
However …. (BALANCE FOR ANALYSIS)
Based on the evidence provided in the Case Study, I would agree/disagree about
XXXX because …. (Evaluation)
Example:
Q1 – Haltec, a computer company has decided to market the release of a new brand of
gaming mouse. In your opinion, how could they use Product as their unique selling
point.
A1 – In relation to the Product, marketing that is aimed at emphasizing the quality of the
product as the best thing about it, this means that Haltec would show the quality in
advertisements like magazine adverts. Therefor the audience would be made aware of
the good points like size, speed, ability. However this may conflict with its price or the
place where they advertise.
Based on the evidence provided in the case study, I would agree that if the product is of
good quality then using Product as the USP would benefit the company more than the
other P’s in marketing as this is what the customers will look for in computer equipment.
Assignment Scenario
 For
LO2: thistoproject
Be able prepare ayou will Splash
effective need to select
Screen and a company
Navigation that
produces or
Screen
provides a range of products or services that employs at least 10
members of staff with a varied job range.
 Ideally this company should have a production, distribution and sales
side to it so that the staff employed do different work tasks, share
resources among departments and should have rivals.
 It can be within any industry, a shop that sells, a company that
provides help and support packages, a delivery company, a
restaurant or food shop but preferably not a franchise as this makes
it difficult when it comes to rules and regulations that apply.
 You can make up the company as long as you use the above
guidance to set the limits of what the company does and sells. If you
choose a company, it should be one you are familiar with and can
research things like ownership, grants, staffing issues and laws that
apply.
1.1 – Assessment Objectives
Outlines below are the objectives for this

LO2: Be able to prepare a effective Splash Screen and Navigation Screen
What it is that a
section of the Unit. They should be business wants
to achieve and
revised as part of the exam preparation. how they go
about getting
that.
1.1.1 - The purpose and nature of Who makes the
products
business activity: companies sell.
• Concepts of needs, wants, scarcity What else a
boss wants
and opportunity cost from the
company.
• Importance of specialisation Does image
• Purpose of business activity matter
Why do similar
• The concept of adding value and companies sell
more or less of
how added value can be increased the same
products.
1.1 – Glossary
These aretothe
LO2: Be able technical
prepare terms
a effective you will
Splash need
Screen andto know forScreen
Navigation the exam. Add them
to your own Glossary.
Added value – the difference between the selling price of a product and the cost of
raw materials used to make it
Effective demand – demand for a product that is backed up by the ability and
willingness to pay for it
Factors of production – the four categories of resources that are used to produce
goods and services: land, labour, capital, enterprise
Goods- tangible products that can be touched and consumed
Needs – things necessary to sustain life
Opportunity cost – the cost of something in terms of the next best thing
Private sector – the sector of business consisting of businesses owned by private
individuals or groups
Profit – the profit a business makes is the amount by which its income from selling the
goods and services it produces exceeds the costs of producing those goods and
services
Public sector – the sector of business consisting of businesses owned by the state
Resources – items of limited availability that can be used in human activity
Services – things other people or businesses do for you
Wants – things chosen to satisfy a need or to make life more enjoyable
1.1.1 – Concepts of Needs and Wants
•LO2:What wetoneed
Be able and
prepare what weSplash
a effective want can sometimes
Screen be Screen
and Navigation
confusing.
What it is that a
• Often you say you need a new Smart Phone or Trainers business wants
when in fact you want it rather than need it. to achieve and
• Needs – The concept of a ‘Need’ is something that you have how they go
to have to survive, a daily essential. Food, Water, Shelter, about getting
that.
Clothing.
• Wants – Is something that we desire, something that makes Who makes the
products
life easier or helps us progress, that does not mean selfish companies sell.
but can mean more efficient.
What else a
• Wants and needs do not have to be material, they do not boss wants
have to be objects to possess or use, they can be ideas, from the
plans, skills. company.
• For certain things Needs outweigh Wants, a company needs Does image
ingredients or raw materials to make a product and those matter
items are obvious, dough, cheese, toppings and heat from Why do similar
an oven to make a pizza and common needs. Is there companies sell
more or less of
something from that list that could be done without, if so, that the same
is a ‘Want’ not a need. products.

Needs What it is that a
business wants
to achieve and
how they go
Clothing Food Shelter about getting
that.
Who makes the
products
Wants companies sell.
What else a
boss wants
from the
Clothing Shelter Food company.
Does image
matter
Jeans House Burger Why do similar
companies sell
more or less of
the same
Party Dresses Apartment Pizza products.
LO2: Be ableis
• What to prepare
the maina effective Splash Screen
difference and Navigation
between needsScreen
and wants? What it is that a
business wants
• For your Business make two lists: the first to achieve and
how they go
showing the things that your Business needs about getting
on a day to day basis to operate, think about that.
how the average Business Day runs; the Who makes the
products
second listing things that your Business would companies sell.
want. What else a
boss wants
• Identify 3 kinds of businesses or organisations from the
that supply each item on your lists. company.
• Select two businesses that you have identified Does image
matter
and explain why you think that they supply the Why do similar
item, why do you think they specialise in companies sell
more or less of
making that item. the same
products.
1.1.1 – Concepts of Needs and Wants - Scarcity
• Some
LO2: Be ableresources
to prepare a effective Splash Screen and Navigation Screen
such as air satisfy What else can be
scarce that
everybody’s needs affects a
but most resources Business
are not plentiful Can scarcity be
temporary.
enough for this. What alternative
• Although trees are resources can be
used during a
renewable you have scarcity.
to be careful of the What scarcities
amount of trees cut can be predicted
down taking into What resources
are guaranteed to
consideration of the be more scarce in
time it takes for the the future.
replacement tree to How does
Scarcity impact
grow. on Product price
1.1.1 – Concepts of Scarcity - Activity
•LO2:
Since resources
Be able toaproduce
to prepare effective goods
Splash and services
Screen are scarce
and Navigation Screen
a choice must be made to decide what to produce from
them. What else can be
• For example, furniture and houses can be made from timber scarce that
affects a
so a decision needs to be made whether to cultivate trees Business
for furniture or houses.
Can scarcity be
• Similarly, if a government spends too much money on temporary.
building skills then it will not be able to spend much on What alternative
training extra doctors. resources can be
• Activity – In groups discuss and prepare a presentation on used during a
how a scarcity of a certain raw material could impact on the scarcity.
production of your products within a country. You should go What scarcities
beyond the obvious for this, think of the short, medium and can be predicted
longer term implications and cascaded impact on reliant What resources
businesses. are guaranteed to
be more scarce in
the future.
How does
Scarcity impact
on Product price
1.1.1 – Concepts of Opportunity Cost
•LO2:
Opportunity cost of aa choice
Be able to prepare is the
effective valueScreen
Splash of the product you did not
choose due to cost, where a choice needs to be made between
several alternatives given limited resources. Assuming the best choice
is made, it is the "cost" incurred by not enjoying the benefit that would The range of
be had by taking the second best choice available or the "loss of products on the
potential gain from other alternatives when one alternative is chosen". market for one
• The principle of opportunity cost helps ensure that scarce resources purpose.
are used efficiently. Why companies
• Opportunity costs are not restricted to financial costs, it also includes would
the cost of output forgone, lost time, pleasure or any other benefit that deliberately
provides benefits should also be considered opportunity costs. produce inferior
• If you want an iPod and a pair of shoes but only have enough money products.
to buy one of them, you will have to choose which one to buy. Both How they
products cost money and that is their financial cost. promote these to
• There is also an opportunity cost – the possibility of buying and get your sales.
enjoying the use of the other item. If you buy the iPod, the opportunity Who owns these
cost of the iPod is the shoes. If you buy the shoes, the opportunity companies.
cost of the shoes is the iPod
• If a gardener decides to grow carrots, his or her opportunity cost is the What happens
when a lesser
alternative crop that might have been grown instead (potatoes,
product becomes
tomatoes, pumpkins, etc.)
more popular.
1.1.1 – Concepts of Opportunity Cost – Activity 1
•LO2:
Opportunity
Be able tocost is nota easy
prepare to grasp
effective at first
Splash but think
Screen and of a time when
Navigation Screen
you could not afford something and had to settle for something else,
either because of a lack of money, time or opportunity.
• Answer the following questions: The range of
• What was the situation that stopped you buying or using the primary products on the
product? market for one
1. What alternatives were available? purpose.
2. Which alternative did you choose? Why companies
3. How much money or time did you save? would
4. Did you ever choose that alternative again as a primary choice deliberately
when the Opportunity Cost was no loner there? produce inferior
5. How do you think the company who produced the alternative, products.
lesser, product marketed their product as the alternative to your How they
choice? promote these to
6. Of the 4P’s (Product, Place, Price and Promotion) which did they get your sales.
use to capture your sales attention? Who owns these
7. Can you name any product that is sold as “Opportunity Cost” that is companies.
made by the same company as the preferred choice?
8. Why would a company do this? What happens
when a lesser
product becomes
more popular.
1.1.1 – Concepts of Opportunity Cost – Activity 2
•LO2:
Kuwait Petroleum
Be able Corporation
to prepare a effective(KPC)
Splash is Screen
one of the
andworld’s largest
Navigation oil
Screen
companies. The company makes products such as petrol and
diesel from crude oil. Crude oil is oil in it’s raw or natural state. It
occurs naturally in deposits within the earth. To produce the petrol The range of
products on the
that people buy from garages, KPC must first extract the crude oil
market for one
from the earth. The company does this by drilling oil wells, many of
purpose.
which are under the sea. KPC then transports the crude oil to oil
refineries where it is turned into petrol or other oil products Why companies
customers want. would
deliberately
• Individually answer the following questions:
produce inferior
1. What does KPC produce? products.
2. Does KPC produce goods or services?
3. Where can you buy KPC’s product? How they
promote these to
4. What is KPC’s product made from?
get your sales.
5. Other than driving, what else could KPC products be used for?
6. Why do you think KPC produces petrol and diesel? Who owns these
7. What are the Opportunity Cost products? companies.
8. Why do people choose one brand of oil over another when it is What happens
refined to the same quality? when a lesser
9. Use the concepts of cost, ownership, preference, moral, product becomes
political and environmental, why would KPC products, if they more popular.
are cheaper, not be the sole market trader.
1.1.2 – Importance of Specialisation
•LO2: Be able to prepare

Importance of Specialisation
a effective –Splash
For decades
Screenthe
andmajor companies
Navigation Screen
in the world made one thing each, that was what they were known
for, that was what they were good at, and that was where their The range of
money came from. Microsoft made operating systems and products on the
software. Honda made cars, Apple made computers, Puma made market for one
trainers, Kellogg's made bran flakes. We could look at the brand purpose.
names below and say what their specialised product was: Why companies
would
deliberately
produce inferior
products.
• Why do companies specialise – How they
o Created demand that is constant promote these to
o Work force that is trained in that production skill get your sales.
o Marketing, promotion, distribution and client base is in place.
Who owns these
o Results in greater efficiency and productivity. Workers don’t have
companies.
to move between jobs. This leads to lower cost of production.
o Time is saved as the workers become for efficient in performing a What happens
when a lesser
particular job, becoming ‘experts’, they commit less mistakes
product becomes
which leads to less wastage. more popular.
o Due to specialisation production level increases which make it
possible to carry out mass production.
1.1.2 – Importance of Specialisation and Division of Labour
•LO2:
Specialisation and a
Be able to prepare Division
effectiveofSplash
Labour – Thisand
Screen is aNavigation
separationScreen
of
work process into a number of tasks with each task performed by
a separate person or group. However this does not necessarily
The range of
lead to a decrease in skills. products on the
• Division of Labour raises outpour per person as staff become market for one
good through constant repetition of a task. This gain helps purpose.
companies lower production costs.
Why companies
• Think of a factory making a car. Having one person making the would
whole inside of the car from seats to dashboard to steering etc. deliberately
would mean taking a long time over one car in one place. Then produce inferior
consider one person putting in the seats all day, they will be very products.
good at seat putting by the end of the day, and a master at it after How they
10 years. promote these to
• Upsides – Faster production levels, getting the right person for get your sales.
the job, Economies of large scale production, time saving, less Who owns these
training, inventiveness of task. companies.
• Downsides – Unrewarding and repetitive, people get bored and
What happens
leave, little training so the worker is not skilled beyond the task, when a lesser
leads to mass produced goods and therefor little variety in product becomes
products, loss of pride, decline in craftsmanship, reduction of more popular.
labour mobility.
1.1.2 – Importance of Specialisation and Division of Labour - Drawbacks
1.
LO2:Monotony in worka -effective
Be able to prepare A workerSplash
has toScreen
do the and
same small task
Navigation again and again.
Screen
Therefore, the job becomes boring and the worker loses interest in his work. Boredom
and monotony create mental fatigue which ultimately spoils the quality of work.
2. Lack of responsibility - A worker performs only a part of the total job. Therefore, no
individual can be held responsible if anything goes wrong. It is very difficult to fix
responsibility for defect in the product.
3. Greater interdependence - Job, work processes and industries become increasingly
inter dependent due to division of labour. Any problem or defect in one part may cause
disturbance and dislocation in the entire process of production.
4. Loss of job pride - Since every worker produces only a small part of the product, he
cannot take pride in ultimate result. Loss of sense of job satisfaction reduces the
involvement of employees.
5. Reduced mobility of labour - Since every worker specializes in one type of work, he
may find it difficult to procure a job in case of unemployment.
6. Decline in craftsmanship - Division of labour and consequent mechanisation of work
reduces the role of worker in the production process. The tradition of craftsmanship
may decline and the creative instincts of workers may remain unsatisfied.
7. Pollution of environment - Division of labour leads to large scale production in
factories. This leads to pollution of air, water and land. Slums develop near industrial
areas.
1.1.2 – Importance of Specialisation and Division of Labour - Advantages
1.
LO2:Right person
Be able in the aright
to prepare Job - Splash
effective Every worker
Screenis assigned the task Screen
and Navigation for which he is best suited.
This helps to provide, opportunities for the best use of natural talents as a person performs the
job which he likes he gets pleasure in work and becoming an expert in performing the job.
2. Greater Efficiency - Division of labour helps to increase the efficiency of workers due to two
reasons. First, every worker is assigned a job that suits his skills, experience, training and
aptitude.
3. Better Quality of Work - Division of labour not only increases the quantity of work it also
improves the quality of production. Better and modern machines and equipment are used. Better
quality products help to increase the goodwill and profits of business.
4. Saving of time - Division of labour helps to avoid waste of time and effort caused by changes
from one type of work to another. The worker does not have to shift from one process to another.
5. Economies of large scale production - Division of labour facilitates mass production. Large
scale production provides economies in the use of resources, such as raw materials, labour, tools
etc. Optimum use of means of production helps to reduce cost of production.
6. Less learning period - Under division of labour a worker needs to learn only a part of the whole
task. Therefore, lesser time and expenditure is involved in training workers.
7. Inventions and Innovations - A worker doing the same task again and again tries to find new
and better ways of doing the job. Small and simple parts of a task can easily be done by
machines. Thus, division of labour increases scope for inventions and innovations.
8. Wider Market - Division of labour makes available cheaper goods of a wide variety. As a result
demand for goods and services increases.
9. Benefits to society - Society is benefited due to (a) reduced cost on account of large scale
production (b) higher productivity which leads to economic growth (c) employment of unskilled
workers and (d) better quality of goods and services for consumers.
1.1.2 – Importance of Specialisation - Activity
•LO2:
Specialisation and Division
Be able to prepare of Labour
a effective – This task
Splash Screen andwill allow youScreen
Navigation to
discuss the basics of:
• Outcomes of "cottage industry" process with "division of labour" How you are
process in manufacturing a product improving each
• Outcomes of "cottage industry" process with "division of labour" time you do the
process in manufacturing a product task.
• Job satisfaction of both processes How you are
• Construct wholly or specifically a product using one of two processes. reliant on
• The class will need to be split into teams of three or four with at least others to finish
one team working as independent workers and the other teams working theirs.
as a team where each person in that team will do one part of the task How solitary
for everyone. We will be making a dice using scissors, glue and a pen. work is different
• Group 1 – Independent working, create the dice from start to finish from group
each. work.
• Group 2: How you might
• Player 1 - Cuts out the dice template for all members. prefer to do the
• Player 2 - Writes the numbers on the dice in elaborate fashion. other tasks.
• Player 3 - Glues the dice together.
How it feels to
• Player 4 - Optional player, quality control and management of tasks.
be judged on
• When done you will need to measure how long it took to complete the
your own or as
task, groups against individuals, and test the quality of the finished
a group.
product, Teams against individuals.
• Use the following dice template, print it out for the students to use.
1.1.3 – Purpose of Business Activity
•LO2:
TheBepurpose of all aBusinesses
able to prepare is toScreen
effective Splash combine
andthe factors Screen
Navigation of
production to make products which will satisfy peoples Local, National
and Global
wants. These products can either be goods – physical items
such as cars and shoes which we can touch and see – or Primary,
Secondary,
they can be services, such as insurance, tourism or banking. Tertiary.
• Businesses can be small or large, some businesses employ
Public, Private,
thousands of people with operations in many different Shareholder,
countries. PLC.
• Businesses can be privately owned or state owned, can e Services, Sales,
owned by one person or by shareholders. Charity, Non-
• Whatever the size and whomever owns them, they all have profit.
one thing in common, they combine factors of production to Single shop,
make products which satisfy people’s wants. Franchise,
Chain, Web
based.
Factors of Production
Part time, full
time, occasional
or seasonal
Land Labour Capital Enterprise staffing.
•LO2:
This
Be may seem
able to like asomething
prepare that isScreen
effective Splash completely normal to Screen
and Navigation us,
we are used to it, we see it all around us from the corner shops
to the big business names. However in undeveloped societies Local, National
and Global
businesses do not exist as such. Everyone attempts to do
everything for themselves, the are self-sufficient. Primary,
• With their own plot of land and by their own efforts, such as Secondary,
Tertiary.
hunting or barter, they attempt to survive and produce enough
for their own needs. This is a very basic existence and living Public, Private,
Shareholder,
standards will be very low.
PLC.
• By a slow process of specialisation, people began to
Services, Sales,
concentrate on what they were best at. They then traded those
Charity, Non-
goods for other goods made by people who have different skills. profit.
This is called a market economy.
Single shop,
• Business activity therefor: Franchise,
• Combines scarce factors of production to produce goods Chain, Web
and services. based.
• Produces goods and services which are needed to satisfy Part time, full
the needs and wants of the population time, occasional
• Employs people as workers and pays them wages to allow or seasonal
them to consume products made by other people. staffing.
•LO2:
Using the to
Be able heading choose
prepare research
a effective three
Splash businesses
Screen for each Screen
and Navigation
business field and explain the similarities in the field they operate
and the differences. Local, National
and Global
Medical Product sales Manufacturing Providing a Service
Primary,
Global Secondary,
Company 1 Tertiary.
Similarities Public, Private,
Shareholder,
Differences
PLC.
National Services, Sales,
Company 2 Charity, Non-
Similarities profit.
Single shop,
Differences
Franchise,
Local Chain, Web
Company 3 based.
Similarities Part time, full
time, occasional
Differences or seasonal
staffing.
1.1.4 – Adding and Increasing Value
•LO2:
Added
Be ablevalue - Theadifference
to prepare between
effective Splash theand
Screen price of the Screen
Navigation
finished product/service and the production costs involved in How Branding
making it. links to value
added
• This is because of the work carried out increases the value of
How marketing
the parts and raw materials used. When the product is can change the
complete its value and the price it is sold at is more than the image of a
value of the factors of production used to make the product. product.
• Therefor added value is the increase in value that a business What a Loss-
Leader is and how
creates by undertaking the production process. this affects value
• Consider the examples of new cars rolling down the added when
production line being assembled by robots. The final, money is lost in
the sale price.
completed and shiny new car that comes off the production
The loss of
line has a value (price) that is more than the cost of the sum customers through
of the parts. Value has been added. Exactly how much added bad customer
value is determined by the price that a customer pays. service even when
the product is
• Alternatively, imagine a celebrity chef preparing a meal at his good.
luxury restaurant. Once the cooking is complete, the meal is How some
being served and sold for a high price, substantially more companies benefit
than the cost of buying the ingredients. Value has been the wider
community as a
added. value added.
1.1.4 – Adding and Increasing Value
•LO2:
YouBedon’t have
able to to use
prepare robots orSplash
a effective have Screen
the culinary skills of Gordon
Ramsay to “add value”. Businesses can also add value by:
• Building a brand – a reputation for quality, value etc. that How Branding
customers are prepared to pay for. Nike trainers sell for much links to value
added
more than Hi-tec, even though the production costs per pair are
How marketing
similar. can change the
• Delivering excellent service – high quality, attentive personal image of a
service can make the difference between achieving a high price product.
or a medium one. What a Loss-
• Product features and benefits – additional functionality in Leader is and how
this affects value
different versions of software can enable a software seller to added when
charge higher prices, different models of cars are designed to money is lost in
achieve the same effect. the sale price.
• Offering convenience – customers will often pay a little more The loss of
for a product that they can have straightaway, or which saves customers through
bad customer
them time. service even when
• A business that successfully adds value should find that it is able the product is
to operate profitably. Remember the definition of adding value - good.
where the selling price is greater than the costs of production. How some
• Do not confuse added value with profit as they are not the same companies benefit
the wider
community as a
value added.
1.1.4 – Adding and Increasing Value - Activity
•LO2:
Discussion
Be able to–prepare
2 Groups – One forSplash
a effective and one against.
Screen andEven if you are
Navigation Screen
against or for, you should be able to create an argument for either
side for the sake of arguing. How Branding
• Would you be willing to pay a bit more for a loaf that has been made links to value
added
at home. Can you say the same for clothes, a bicycle, your school
How marketing
bag.
can change the
image of a
product.
What a Loss-
Leader is and how
this affects value
added when
money is lost in
the sale price.
The loss of
customers through
bad customer
service even when
the product is
good.
Cheaper, cleaner process, guaranteed How some
100% Profit to the baker, promotes home
industry, morally right, tastes fresher, paying quality, regulated by health board, package companies benefit
for time and effort. sealed, more people involved in work the wider
process. community as a
value added.
1.1.4 – Adding and Increasing Value – Tasks - Homework
1. Missing
LO2: Be ablewords
to prepare a effective Splash Screen and Navigation Screen
Adding value means creating a finished product that is worth more to
the customer than the sum of the parts. At Starbucks, 25p of coffee How Branding
beans, milk and flavourings turns into a selling price of £2.50. The links to value
£__________of value added pays for staff, the equipment, the sofas, added
the rent and still generates a generous _______________. Adding How marketing
value is the ultimate goal of Research and Development teams and can change the
image of a
marketing departments. It generates the surplus that pays the bills. product.
The formula for calculating value added is: ________________ -
What a Loss-
bought-in goods and services. Leader is and how
2. Ways to add value (Match the points A – H to the relevant
product type or types) ? this affects value
added when
money is lost in
Product type Ways to add value Ways to add value the sale price.
1. Car manufacturing A. Obtain a E. Carry out the process The loss of
prestigious address faultlessly customers through
2. Biscuit production B. Measure up, F. Excellent design and styling bad customer
then make to fit service even when
3. Running a private C. Offer a short G. Impressive, prestige the product is
hospital lead time packaging good.
4. Making wedding D. Add a technical H. Use low cost materials How some
dresses innovation where they’re not visible to the companies benefit
customer the wider
community as a
value added.
3. Calculations
Tardew Car Dealers buys a 6 year old Fiesta for £700 cash. One car seat is
replaced and a new exhaust fitted - the parts cost £105. After a thorough How Branding
clean-up inside and out and a squirt of air freshener inside (materials cost: links to value
£5), the Fiesta goes onto the forecourt at £1,495 and is sold for £1,400 a added
week later. How marketing
I. Calculate the added value can change the
II. Explain why this added value cannot be treated as pure profit. image of a
product.
Strength is a cure for baldness based on herbal medicines. It sells in bottles What a Loss-
priced at £24 that provide enough for two weeks. A full cure is said to take Leader is and how
one year, though the packaging says that only 50% of users will find the cure this affects value
effective. Jenny Ireland, the inventor of Strength, has hired a well-known TV added when
and film actor to promote the product on a series of TV commercials. The money is lost in
the sale price.
production process and costs of Strength are a closely guarded secret, but
the materials themselves cost no more than 30p - the same as the The loss of
packaging. Jenny often refers to the ‘huge overheads’ of running the customers through
bad customer
business, but with sales of 2 million bottles last year, no wonder she has just
service even when
bought herself a Mercedes sports car. the product is
a) Calculate the
III. value added per bottle
IV. total value added in the last year
? good.
How some
companies benefit
b) Give one justification Jenny might find to defend the high price she the wider
charges for Strength. community as a
value added.
LO2: Be able
4. Outline to prepare
one exampleaof:
effective Splash Screen and Navigation Screen
4.1 Added value based upon deception or cleverness (such as Aero adds
value by blowing air through chocolate) How Branding
___________________________________________________________ links to value
___________________________________________________________ added
___________________________________________________________ How marketing
___________________________________________________________ can change the
___________________________________________________________ image of a
product.
4.2 Added value based upon a unique selling point (a USP)
___________________________________________________________ What a Loss-
___________________________________________________________ Leader is and how
this affects value
___________________________________________________________ added when
___________________________________________________________ money is lost in
___________________________________________________________ the sale price.
4.3 TV advertisements you have seen recently that seem focused upon The loss of
adding value customers through
___________________________________________________________ bad customer
___________________________________________________________ service even when
___________________________________________________________ the product is
___________________________________________________________ good.
___________________________________________________________ How some
Download Word Version to Print Download Answers companies benefit
? the wider
community as a
value added.
1.1.1: Business Activity - Revision Questions

1. From the following list, decide which items are human
needs and which are wants:
• Luxury House, Shelter, Coca-Cola, Car, Clean Water,
Designer Jeans, Clothing [3]
2. Explain what is meant by scarcity when referring to the
economic problem [3]
3. List the 4 factors of production and explain briefly and
explain briefly why each is necessary for production to
take place [8]
4. Explain, with the aid of an example, what the term
opportunity cost means to a consumer [3]
5. Give 2 other examples of opportunity cost that would
6.
affect groups other than consumers [2]
Explain what is meant by the term division of labour [2]
?
1.1.1: Business Activity - Revision Questions

7. Why is a business likely to increase output if it
adopts division of labour [2]
8. List 4 tasks involved in the making of cakes that
could be given over to different workers through
division of labour [2]
9. State 3 benefits to society of business activity [3]
10. What is meant by added value [2]
11. Identify and explain 2 ways in which a retailer of
clothes could add value to their products. (Hint:
the answer is not to buy more expensive clothes
for the shop as this will not necessarily add
value.) [6]
?

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Business Studies – iGCSE

1.1 – Business Activity

Outlines below are the objectives for this

LO2: Be able to prepare a effective Splash Screen and Navigation Screen

•LO2: Be able to prepare

Scenario Glossary 1.1.1 1.1.2 1.1.3 1.1.4 Exam Question

Scenario Glossary 1.1.1 1.1.2 1.1.3 1.1.4 Exam Question

LO2: Be able to prepare a effective Splash Screen and Navigation Screen

LO2: Be able to prepare a effective Splash Screen and Navigation Screen

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