Year 11 Paper 6: Full Course Mixed Practice
Enterprise and entrepreneurship, business aims and objectives, spotting a business opportunity, cash flow, profit margins, the marketing mix, operations management and external influences on business.
Year 11 here means a typical teaching order, not a syllabus rule. No exam board defines what belongs to Year 11, and schools sequence the course differently. Check it against your own scheme of work before using it to decide what a class has covered.
Questions
Question 1 [3 marks]
Business Aims and Objectives
Explain one reason why a new charity shop might set a survival objective, even though it does not aim to make a profit for owners.
Question 2 [3 marks]
Spotting a Business Opportunity
Explain one advantage to a new business of using secondary market research rather than primary market research.
Question 3 [3 marks]
Operations Management
A small bakery makes trays of 24 identical cupcakes at a time, then switches its equipment to make a different batch of, for example, brownies.
Explain one advantage to the bakery of using batch production rather than making each item completely individually.
Question 4 [3 marks]
Enterprise and Entrepreneurship
Explain one reason why having a genuine passion for a product or service can help an entrepreneur succeed.
Question 5 [3 marks]
External Influences on Business
Explain one way a rise in interest rates could affect a small business that has a bank loan.
Question 6 [3 marks]
Cash Flow
Explain one reason why a business might arrange an overdraft facility with its bank, even if it does not expect to use it.
Question 7 [3 marks]
The Marketing Mix
Explain one reason why a new energy drink brand might use a penetration pricing strategy when it first launches.
Question 8 [4 marks]
Operations Management
A phone case manufacturer currently only checks finished products at the very end of the production line and rejects any faulty ones.
Explain two benefits to the manufacturer of moving to a quality assurance approach, where quality is checked at every stage of production.
Question 9 [4 marks]
The Marketing Mix
A furniture company sells only through its own website, with no physical shops.
Explain two advantages to the company of using online distribution rather than selling through shops.
Question 10 [5 marks]
Operations Management
A car repair garage is deciding whether to introduce quality assurance checks at each stage of a repair, rather than only checking the car once the whole job is finished.
Explain two benefits to the garage of checking quality at each stage of the repair, rather than only at the end.
Question 11 [5 marks]
Profit and Financial Performance
A restaurant has sales revenue of 210000 pounds, total costs of 178500 pounds, and net profit of 31500 pounds for the year. The owner's target is a net profit margin of at least 20 percent.
Calculate the restaurant's net profit margin, to one decimal place, and state whether it has met the owner's target.
Question 12 [5 marks]
Spotting a Business Opportunity
A new gym sends a questionnaire to 400 potential customers, and 92 of them respond.
Calculate the response rate as a percentage, and explain one way the gym could try to increase this response rate.
Question 13 [5 marks]
Operations Management
A bakery has a maximum daily production capacity of 800 loaves. It currently produces 560 loaves a day.
Calculate the bakery's capacity utilisation as a percentage, and explain one way the bakery could increase its capacity utilisation.
Question 14 [5 marks]
Spotting a Business Opportunity
A local taxi firm had annual revenue of 150000 pounds last year, in a local taxi market worth 750000 pounds a year.
Calculate the taxi firm's market share as a percentage last year. This year, the market has grown to 900000 pounds and the firm's revenue has grown to 162000 pounds. Calculate the firm's market share this year, and state whether its market share has grown or shrunk.
Question 15 [5 marks]
Operations Management
A workshop has fixed costs of 6000 pounds a month and a maximum capacity of 1000 units a month.
Calculate the fixed cost per unit if it operates at 40 percent capacity utilisation, and the fixed cost per unit if it operates at 80 percent capacity utilisation.
Question 16 [5 marks]
Spotting a Business Opportunity
In a small town, three plumbing firms share a market worth 500000 pounds a year.
Firm A has annual revenue of 175000 pounds and Firm B has annual revenue of 235000 pounds.
Calculate Firm A's market share and Firm B's market share as percentages, and state which firm has the larger share.
Question 17 [6 marks]
External Influences on Business
A UK toy exporter sells a toy for 25 US dollars to an American retailer. When the pound is worth 1.25 dollars, this converts to 20 pounds for the exporter.
Calculate what the 25-dollar sale converts to in pounds if the pound strengthens to 2.00 dollars, and evaluate the impact of this strengthening pound on the exporter's revenue from dollar sales.
Question 18 [6 marks]
Profit and Financial Performance
A software support company's net profit margin has fallen from 22 percent to 14 percent over the past year, even though sales revenue has grown, because staff wages and office costs have risen sharply.
Evaluate two methods the company could use to improve its net profit margin.
Question 19 [6 marks]
Enterprise and Entrepreneurship
A new entrepreneur is planning to launch a business selling handmade greetings cards only through a physical market stall, with no online presence.
Evaluate whether the entrepreneur should also sell online through a website and social media, given how technology is changing the way small businesses reach customers.
Question 20 [6 marks]
The Marketing Mix
A board game that launched five years ago has reached the maturity stage of its product life cycle, and sales have started to decline as newer games attract customers instead.
Evaluate two extension strategies the manufacturer could use to boost the game's declining sales.
Question 21 [6 marks]
Profit and Financial Performance
A clothing retailer's gross profit margin has fallen from 45 percent to 38 percent over the past year, even though sales revenue has grown.
Evaluate two methods the retailer could use to improve its gross profit margin.
Question 22 [6 marks]
Spotting a Business Opportunity
A new business is planning to launch a range of premium, handmade chocolates priced above most supermarket chocolate.
A market map for the UK chocolate market shows most existing brands cluster around low price and high volume, with only a small number of competitors in the high price, low volume segment.
Evaluate whether launching into this high price, low volume gap is likely to be a good strategy for the new business.
Model solutions
| Question 1[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that even a not-for-profit needs enough income to cover its running costs, such as rent and staff | B1 |
| developing this, such as being unable to continue any charitable work at all if it has to close | B1 |
| concluding that staying open is the top priority before it can help more people or expand | B1 |
| Final answer: Even a not-for-profit needs to cover its running costs to avoid closing, so staying open is the priority before it can help more people or expand | |
| Question 2[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying an advantage, such as secondary research being cheaper and quicker to obtain | B1 |
| developing it, such as the data already existing in published reports or government statistics, so it does not need to be collected from scratch | B1 |
| a valid conclusion, such as this saving the limited budget of a new business for other start-up costs | B1 |
| Final answer: It is cheaper and quicker because the data already exists, saving a new business's limited start-up budget | |
| Question 3[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that identical items are made together in a group, or batch | B1 |
| developing this, such as allowing some economies of scale on each batch while still offering a variety of different products | B1 |
| concluding that this lowers the average cost per item compared with making every single item one at a time | B1 |
| Final answer: Making identical items together in a batch allows some economies of scale while still offering variety, lowering the average cost per item compared with making each one individually | |
| Question 4[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that a passionate entrepreneur is strongly motivated by the product or service itself | B1 |
| developing this, such as being more likely to keep working hard through the difficult early months of trading | B1 |
| concluding that this increases the chance the business survives long enough to succeed | B1 |
| Final answer: Genuine passion motivates an entrepreneur to keep working hard through the difficult early months, increasing the chance the business survives | |
| Question 5[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that the cost of borrowing increases, so monthly loan repayments rise | B1 |
| developing this, such as leaving the business with less cash available for other costs such as wages or stock | B1 |
| concluding that this could reduce the business's profit or force it to raise its own prices | B1 |
| Final answer: Higher interest rates increase loan repayments, leaving less cash for other costs and potentially reducing profit or forcing higher prices | |
| Question 6[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that an overdraft acts as a safety net of short-term cash | B1 |
| developing this, such as being available immediately if an unexpected shortfall occurs, for example from a late-paying customer | B1 |
| concluding that this reduces the risk of being unable to pay bills on time even during an unplanned shortfall | B1 |
| Final answer: An overdraft acts as a safety net of short-term cash that is available immediately if an unexpected shortfall occurs, reducing the risk of being unable to pay bills on time | |
| Question 7[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that a low initial price is set | B1 |
| developing this, such as attracting customers away from established rival brands quickly | B1 |
| concluding that this helps the new brand build market share and awareness before it later raises prices | B1 |
| Final answer: A low launch price attracts customers from established rivals, helping the brand build market share and awareness before prices rise later | |
| Question 8[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying a benefit, such as faults being caught earlier, at the stage where they occur | B1 |
| developing it, such as reducing the material and labour wasted on items that would otherwise be rejected at the end anyway | B1 |
| identifying a second benefit, such as fewer faulty products reaching customers | B1 |
| developing it, such as protecting the business's reputation and reducing costly returns or refunds | B1 |
| Final answer: Two developed benefits, such as less wasted material and labour from catching faults earlier, and fewer faulty products reaching customers, protecting reputation and reducing returns | |
| Question 9[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying an advantage, such as lower costs from not paying shop rent, rates or shop staff | B1 |
| developing it, such as being able to offer lower prices or keep more profit per sale | B1 |
| identifying a second advantage, such as reaching a wider, potentially national or international, customer base | B1 |
| developing it, such as customers not being limited to those who can visit a physical location, increasing potential sales | B1 |
| Final answer: Two developed advantages, such as lower costs than running shops, and access to a wider customer base not limited by location | |
| Question 10[5 marks] | |
|---|---|
| Answer or working | Marks |
| identifying a benefit, such as a mistake being caught and corrected at the stage it happens, before further work is built on top of it | B1 |
| developing it, such as avoiding having to redo a large amount of completed work if a fault is only found at the very end | B1 |
| identifying a second benefit, such as fewer faults reaching the customer when they collect their car | B1 |
| developing it, such as protecting the garage's reputation and reducing the cost of comebacks or complaints | B1 |
| a concluding link, such as this making quality assurance more cost-effective overall than checking only at the end | B1 |
| Final answer: Two developed benefits, such as catching faults early before further work is built on them, and fewer faults reaching the customer, both making quality assurance more cost-effective than checking only at the end | |
| Question 11[5 marks] | |
|---|---|
| Answer or working | Marks |
| dividing net profit of 31500 by sales revenue of 210000 | M1 |
| multiplying the result by 100 | M1 |
| a net profit margin of 15.0 percent | A1 |
| correctly comparing 15.0 percent with the 20 percent target | B1 |
| the correct conclusion that the restaurant has not met the target, since 15.0 percent is below 20 percent | B1 |
| Final answer: Net profit margin = 15.0 percent; no, this has not met the owner's 20 percent target | |
| Question 12[5 marks] | |
|---|---|
| Answer or working | Marks |
| dividing 92 by 400 | M1 |
| multiplying the result by 100 | M1 |
| a response rate of 23 percent | A1 |
| a valid method to increase the response rate, such as offering a small incentive or shortening the questionnaire | B1 |
| developing it, such as explaining that people are more willing to complete a quick survey or one offering a reward | B1 |
| Final answer: Response rate = 23 percent; a method such as offering a small incentive or shortening the questionnaire could increase how many people respond | |
| Question 13[5 marks] | |
|---|---|
| Answer or working | Marks |
| dividing 560 by 800 | M1 |
| multiplying the result by 100 | M1 |
| a capacity utilisation of 70 percent | A1 |
| a valid method to increase capacity utilisation, such as increasing marketing or promotion to raise the number of loaves sold each day | B1 |
| developing it, such as this raising output closer to maximum capacity, spreading the bakery's fixed costs over more loaves and lowering the average cost per loaf | B1 |
| Final answer: Capacity utilisation = 70 percent; a valid method such as increasing marketing to raise daily sales would move output closer to maximum capacity, spreading fixed costs over more loaves and lowering the average cost per loaf | |
| Question 14[5 marks] | |
|---|---|
| Answer or working | Marks |
| last year's share = 150000 divided by 750000, multiplied by 100 | M1 |
| 20 percent | A1 |
| this year's share = 162000 divided by 900000, multiplied by 100 | M1 |
| 18 percent | A1 |
| correctly stating that the market share has shrunk, from 20 percent to 18 percent, even though revenue has grown | B1 |
| Final answer: Market share last year = 20 percent; market share this year = 18 percent; the firm's market share has shrunk, even though its revenue has grown | |
| Question 15[5 marks] | |
|---|---|
| Answer or working | Marks |
| output at 40 percent capacity = 400 units | M1 |
| a fixed cost per unit of 15 pounds (6000 divided by 400) | A1 |
| output at 80 percent capacity = 800 units | M1 |
| a fixed cost per unit of 7.50 pounds (6000 divided by 800) | A1 |
| identifying that the fixed cost per unit falls as capacity utilisation rises | B1 |
| Final answer: Fixed cost per unit at 40 percent capacity = 15 pounds; at 80 percent capacity = 7.50 pounds; the fixed cost per unit falls as capacity utilisation rises | |
| Question 16[5 marks] | |
|---|---|
| Answer or working | Marks |
| Firm A's share = 175000 divided by 500000, multiplied by 100 | M1 |
| 35 percent | A1 |
| Firm B's share = 235000 divided by 500000, multiplied by 100 | M1 |
| 47 percent | A1 |
| correctly concluding that Firm B has the larger market share | B1 |
| Final answer: Firm A's market share = 35 percent; Firm B's market share = 47 percent; Firm B has the larger share | |
| Question 17[6 marks] | |
|---|---|
| Answer or working | Marks |
| dividing 25 by 2.00 | M1 |
| 12.5 pounds | A1 |
| correctly identifying that this is less than the 20 pounds received before the pound strengthened | B1 |
| explaining that a stronger pound means each dollar of sales converts into fewer pounds, directly reducing revenue from the existing level of dollar sales | B1 |
| a further point, such as the exporter being able to raise its dollar price to compensate, but risking making its toys less price-competitive for American customers | B1 |
| a justified conclusion on how the exporter should respond, weighing accepting lower pound revenue against risking lost sales from raising the dollar price | B1 |
| Final answer: 25 dollars converts to 12.5 pounds when the pound is worth 2.00 dollars, less than the 20 pounds received before; a justified judgement weighing accepting lower revenue against risking lost sales by raising the dollar price | |
| Question 18[6 marks] | |
|---|---|
| Answer or working | Marks |
| a first method, such as reducing overhead costs, for example by moving to smaller or cheaper office space | B1 |
| developing it, such as directly lowering the expenses deducted after gross profit, increasing net profit without needing more sales | B1 |
| a second method, such as improving staff productivity, for example through better training or scheduling software | B1 |
| developing it, such as allowing the same work to be done with fewer or less overtime-heavy staff hours, reducing wage costs relative to revenue | B1 |
| a further evaluative point, such as cutting office space or staff hours risking a fall in service quality or staff morale | B1 |
| a justified conclusion recommending one method, or a combination, with a reason | B1 |
| Final answer: A justified recommendation such as combining reduced overheads with improved staff productivity, weighing the risk to service quality or morale against the need to restore the margin | |
| Question 19[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour of selling online, such as reaching many more potential customers beyond those who visit the market | B1 |
| developing it, such as being able to sell at any time of day rather than only during market hours | B1 |
| a point against, such as the cost and time needed to build and maintain a website or social media presence | B1 |
| developing it, such as this being a significant burden for a brand-new, one-person business with limited time and money | B1 |
| a further factor, such as whether handmade cards benefit from being seen and touched in person, which selling online cannot replicate | B1 |
| a justified conclusion on whether the extra reach from selling online is likely to outweigh the extra cost and time, related to the entrepreneur's resources | B1 |
| Final answer: A justified judgement weighing the wider reach and flexibility of selling online against the cost, time and loss of the in-person experience, related to the entrepreneur's limited resources as a new, one-person business | |
| Question 20[6 marks] | |
|---|---|
| Answer or working | Marks |
| a first strategy, such as releasing a themed expansion pack or updated edition with new components | B1 |
| developing it, such as giving existing fans a reason to buy again and attracting new customers curious about the refreshed version | B1 |
| a second strategy, such as a new promotional push or price discount | B1 |
| developing it, such as reminding lapsed customers about the game and attracting price-sensitive new customers who had not tried it before | B1 |
| a further evaluative point, such as an expansion pack costing money to design and produce that might not be recovered, or a discount reducing the margin on every sale | B1 |
| a justified conclusion recommending one strategy, or a combination, with a reason | B1 |
| Final answer: A justified recommendation, such as combining a new expansion pack with a promotional discount, weighing the cost of new content against the risk that discounting alone reduces margin without reversing the decline | |
| Question 21[6 marks] | |
|---|---|
| Answer or working | Marks |
| a first method, such as raising selling prices | B1 |
| developing it, such as directly increasing the amount of gross profit earned on each sale, if customers still buy at the higher price | B1 |
| a second method, such as negotiating lower prices from suppliers to reduce the cost of sales | B1 |
| developing it, such as increasing the gap between selling price and cost of sales without needing to change prices to customers | B1 |
| a further evaluative point, such as raising prices risking the loss of price-sensitive customers to competitors | B1 |
| a justified conclusion recommending one method, or a combination, with a reason | B1 |
| Final answer: A justified recommendation such as combining supplier price negotiation with selective price increases, weighing the risk of losing customers against the need to restore the margin | |
| Question 22[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour, such as the gap having few direct competitors, making it easier to stand out and build a loyal niche customer base | B1 |
| developing it, such as reduced price competition allowing a premium price to be charged, improving profit margins | B1 |
| a point against, such as the smaller potential customer base limiting the total sales volume achievable | B1 |
| developing it, such as fixed costs having to be covered by fewer, higher-value sales, increasing risk if demand is lower than expected | B1 |
| a further relevant factor, such as whether the business has the finance, quality and branding needed to justify a premium price | B1 |
| a justified conclusion weighing the gap opportunity against the limited sales volume, related to the business's resources | B1 |
| Final answer: A justified judgement balancing the reduced competition and higher margins of a gap in the market against the smaller potential sales volume and the resources needed to justify a premium price | |