The Purpose and Nature of Business Activity Solution ✍🏽
WaWay, a large manufacturing business, makes cell (mobile) phones.
WaWay exports 30% of its products. It imports most of its raw materials to help reduce total costs.
All 400 of WaWay’s employees understand the importance of quality control. WaWay’s directors are researching ways of further adding value to their products.
(c) Outline two ways WaWay can add value to its products. [4]
Way 1 Packaging
Explanation Use attractive packaging to add to the experience of “unboxing” the cell phone.
Way 2 Add features
Explanation Like fingerprint recognition to make phones easier to use.
Classification of Business Solution ✍🏽
| Percentage of economic activity by sector in country X, Y and Z | |||
| Primary | Secondary | Tertiary | |
| Country X | 37 | 19 | 43 |
| Country Y | 13 | 17 | 70 |
| Country Z | 75 | 15 | 20 |
(c) Outline two reasons why country Z may have a higher proportion of economic activity in the primary sector. [4]
Reason 1 Less developed country
Explanation Only 20% of activity in tertiary sector
Reason 2 Natural resources
Explanation 75% in primary sector because of large mining sector
Enterprise, Business Growth and Size Solution ✍🏽
Eka owns and manages She Works, a new business start-up in country X. It provides office space for female digital entrepreneurs for a monthly fee.
She Works has increasing sales revenue and Eka is considering opening another co-working space in a neighbouring town. Eka said “Without the government’s support and training in the early stages of the business development, She Works would not have survived”
(e) Do you think the government should help start-up businesses? Justify your answer. [6]
Yes, because start-ups create jobs. Higher employment means more spending and greater economic activity in Country X.
No because helping businesses means higher government spending and the government could spend its money on other projects like roads or hospitals.
Innovative business start-ups are crucial creating innovation for economic growth. Although an extra cost, in the long term they will repay the investment through tax on profits and providing employment.
Types of Business Organisation Solution ✍🏽
Tammy is a sole trader. She provides window cleaning services to home owners. Her business does not benefit from any economies of scale because it is small.
Tammy has just bought a new van and must make repayments to the bank every month. Tammy has to pay her employees every month. However, she gives her customers 2 months to pay.
(d) Explain one advantage and one disadvantage to Tammy of being a sole trader. [6]
Advantage : Keeps all the profit,
Explanation: so if successful she will make more money from the
window cleaning business.
Disadvantage: Unlimited Liability,
Explanation: so if business cannot make the van repayments every month, she may lose her personal possessions.
Business Objectives and Stakeholder Objectives Solution ✍🏽
Eka owns and manages She Works, a new business start-up in country X. It provides office space for female digital entrepreneurs for a monthly fee.
She Works has increasing sales revenue and Eka is considering opening another co-working space in a neighbouring town. Eka said “Without the government’s support and training in the early stages of the business development, She Works would not have survived”
She Works’ external stakeholders want the business to expand further.
(c) Identify four external stakeholder groups. [4]
Stakeholder group 1: local community
Stakeholder group 2: government
Stakeholder group 3: customers
Stakeholder group 4: banks
