Model Answer Booklet

In this booklet there will be the 4 main question types in the Edexcel Business Studies GCSE.

Each page will have an example question, model answer, self-assessment guide and highlighting

demonstrating where the marks come from.

The 4 main question styles in this booklet are:

Discuss Questions (6)

Analyse Questions (6)

Justify Questions (9)

Evaluate Questions (12)

All 4 question types need 5 strands of development through the question to achieve full marks. Below

is a connector map to help you in selecting the appropriate connector.

Business Command Words

Below is all the different command words that could be used in your exams, along

with an explanation of what those words means.

Discuss Questions

Example Question: Discuss the importance of meeting customer needs (6)

Model Answer:

All customers have specific “wants and needs” that a business must satisfy to be successful. For

example, Greggs undertook detailed market research to identify significant demand amongst their

customers for a “breakfast” deal e.g. bacon roll and a hot drink. There have been benefits to Greggs

by satisfying customer wants and needs for a breakfast. To begin with, this new product has resulted

in increased sales revenue for Greggs (1). Subsequently, the increased sales in relation to total costs

has resulted in Greggs making increased profits (2). Notably, these increased profits have been re-

invested back into the business to increase the number of Greggs’s outlets in the UK (3).

Furthermore, the increased profits has allowed Greggs to carry out further market research to

identify how they could further meet customer wants and needs (4). Significantly, the increased

market research has led to the successful launch of other new products meeting customers’ wants

and needs, such as the “Butter Chicken Bake” (5). As a result, meeting customer needs has helped

Greggs to successfully become a leading retailer on the UK high street (6).

Self-Assessment Sheet:

1 Point:

2 5 x Strands of development

3 Number of developed strands (1-5)

Highlighting Key:

Green – The Point made. Only worth 1 mark on its own, but if you get this wrong then you can’t

achieve any marks overall.

Red – Example. This is the first strand of development, worth a further mark if the initial point is

correct. Use this to enhance your further strands of development for top marks

Blue – 5 strands of development. The explanation of why the point you made is a benefit or

drawback. Always make sure the final strand links back to answer the question

Analyse Questions

Example Question: Analyse why Chris should start a Business?

Example Case Study: IT at Home Chris has been working in information technology (IT) technician in a large organisation since he left school. He enjoys the work and is skilled in all areas but he finds working in an office boring. It is not well paid. His friends and family often ask him to help with their computer problems. Chris is gaining a reputation for good quality work. He believes that there is a gap in the market for repairing computers in people’s homes but he has not done any market research. He is sure that he could earn good money through this type of work and would like being in control of his own business. Chris believes his only competition would be from local computer shops that are seen as expensive and inconvenient. If Chris did start his own business, he would have to decide whether to set up as a sole trader. He could set up as a private limited company and sell shares to raise money. He would need a small van but has very little money saved up. He wonders whether he should delay setting up his business until he has done more planning and saved more money.

Model Answer:

Chris would like to be his own boss. Chris “enjoys the work (IT) and is skilled in all areas but he finds working in

an office boring”. In the case of Chris becoming an entrepreneur there are a number of benefits. Firstly

instead of “working in an office” which he finds “boring”, he can work from home overcoming a barrier to him

enjoying his job (1). Significantly this greater enjoyment will act as a motivating factor (2). Moreover, the

combination of him being “skilled” and motivated will mean the quality of his work will be extremely high. (3).

Indeed this will result in him furthering his “reputation for good quality work” leading to increasing sales over

time (4). Subsequently, Chris will have a profitable business justifying his decision to be his own boss (5).

Self-Assessment Sheet:

1 Point:

2 1 x Evidence

3 5 x Strands of development

4 Number of developed strands (1-5)

Highlighting Key:

Green – The Point made. Only worth 1 mark on its own, but if you get this wrong then you can’t achieve any

marks overall.

Red – Context. This is the first strand of development, worth a further mark if the initial point is correct. You

must use context from the case study in an analyse question, else your marks for the question will be halved.

TOP TIP – Put the context in quotes to make it easy for the examiner to see you have used it.

Blue – 5 strands of development. The explanation of why the point you made is a benefit or drawback. Always

relate your strands to the context and that the final strand links back to answer the question. Note how there

is context throughout the strands.

Justify Questions

Example Question: Neil and Sue are considering two options to reduce the amount they need to sell to break

even

Option 1: Increasing average prices by 10%

Option 2: Reducing the cost of ingredients by using a cheaper supplier

Justify which one of these two options Neil and Sue should choose.

Example Case Study:

Model Answer:

Neil and Sue should increase their average prices by 10% to reduce the amount they need to break even. The reason for

this is that Meringue “produces high-quality bread and pastries” and the “sales have grown strongly” therefore showing

the demand for the product. By raising the price from the current level of £9 should not have a major impact on

demand (1) as they sell “Excellent food”, therefore sales revenue will increase for the business (2), this will lead

to the break even point reducing as total costs will remain the same (3). However, customers may be put off by

the increase in prices and start shopping with Meringue’s competitors.

On the other hand, reducing the cost of ingredients would help to reduce the break even point as it would lower the

total costs line. Currently the variable costs of each bread or pastry sold is £6 per product, finding a cheaper supplier

would lower this figure (4) whilst Meringue are still receiving positive reviews for their “very friendly staff”

demonstrating that it is not just their products which draw the customers in. However, by reducing the cost of

ingredients, they could reduce the quality of the products overall which could lead to fewer customers (5) and

an even higher break even point (6).

Overall, I would recommend that Meringue increases their average prices by 10%. The business is known for its “high-

quality ingredients” and with reviews on TripAdvisor as positive as they have been customers will continue to stay loyal

to the business even with the price increase. If sales were to stay constant with an increased price per unit the break-

even point would reduce, and Neil and Sue would achieve their objectives.

Self-Assessment Sheet

1 Point: 1 x advantage

1 x disadvantage

2 3 x Evidence

3 5 x Strands of development

4 Number of developed strands (1-5)

Highlighting key

Blue - Context (Bullet Point one of the mark scheme)

This is where you show off your knowledge in context of the business. For each mention of appropriate context you go

up a level.

Green - Strands of Development (Bullet Point two of the mark scheme)

‘Limited connections’ means you have one strand of development (Level 1)

‘Interconnected points’ means at least two linked strands. (Level 2)

‘Detailed interconnected points’ means at least five linked strands. (Level 3)

Justification (Bullet Point three of the mark scheme)

‘Simple Justification’ – generic explanation that could relate to any business. Not very detailed (Level 1)

‘Justification based on sound evaluation’ – Conclusion includes context and explains advantages to the business (Level 2)

‘Clear justification based on thorough evaluation’ – Conclusion includes context looking at the impact the decision will

have on the business as a whole, explanation is clear throughout. (Level 3)

Evaluate Questions

Example Question: Evaluate whether Sainsbury’s is likely to benefit from its takeover of Home Retail Group.

You should use the information provided as well as your knowledge of business.

Example Case Study:

Model Answer:

Sainsbury’s is likely to benefit from the takeover of Home Retail Group because it will allow the businesses to

“improve its home delivery option” allowing them to compete with Amazon (1) which has been a large

concern. This means that Sainsburys will attract previous and new customers from competitors (2), leading to

an increase in sales revenue (3) subsequently resulting in increased market share (4). This will result in an

increase in profits as long as costs don’t rise too much (4).

However, with Home Retail Group already having “47,000” employees there is the potential for overlapping

roles and therefore redundancies. The possibility of redundancies will cause a lack of motivation (5) in the

staff due to worrying. As a result, the output of the business will be lower (6), and the overall revenue will

decrease (7).

Ultimately Sainsburys is likely to benefit from the takeover. As both businesses appeal to similar markets with

“universal appeal” they will gain a large increase in market share quickly, allowing them to become more

competitive in an “increasingly competitive market”.

Self-Assessment Sheet

Highlighting Key

Red – Terminology (Bullet Point one of the mark scheme)

Blue - Context (Bullet Point two of the mark scheme)

This is where you show off your knowledge in context of the business. For each mention of appropriate context you go

up a level.

Green - Strands of Development (Bullet Point three of the mark scheme)

‘Limited connections’ means you have one strand of development (Level 1)

‘Interconnected points’ means at least two linked strands. (Level 2)

‘Detailed interconnected points’ means at least five linked strands. (Level 3)

Purple - Justification (Bullet Point four of the mark scheme)

‘Simple Justification’ – generic explanation that could relate to any business. Not very detailed (Level 1)

‘Justification based on sound evaluation’ – Conclusion includes context and explains advantages to the business (Level 2)

‘Clear justification based on thorough evaluation’ – Conclusion includes context looking at the impact the decision will

have on the business as a whole, explanation is clear throughout. (Level 3)

BUSINESS CONNECTORS

The final 2 pages should provide ideas for you to use with your connectors. There is an example of how to link

these key terms together on the next page

Business Connector Terminology

Profit Loss Break-Even

Market Share Sales Revenue Growth

Survival Competitor Advantage Average Unit Cost

Added Value Factors of Production Social Cost

Opportunity Cost Target Market Market Segmentation

Motivation Productivity Leadership

Quality Cash Flow Communication

Total Costs Economies of Scale

Connector Example: Redundancy

In the short term total costs will increase, due to paying off employees and a short term loss may occur. It

means the business aim is to survive but will quickly move to breakeven. In the long term, due to the

business employing less staff the average unit cost per product produced will fall, leading to the business

gaining competitor advantage through improved added value, as total costs have fallen in the long term. The

advantage of this is the business will generate profit, which can invested back into the business to support

organic growth, such as investment in new machinery to gain technical economies of scale. The benefit of

gaining this economy of scale is the business will be able to gain further market share, through increased

sales through its competitor advantage.

Financial E of S Managerial E of S Marketing E of S Purchasing E of S Risk Bearing E of S Technical E of S