Business Studies 0450/13 October/November 2025: question paper and mark scheme

Mark scheme

1(a) Identify two reasons why a business might import raw 2 Only award the first two responses given. materials. Award 1 mark per reason (max 2). Points might include: • Not available/limited supply in own country • Lower cost • Better quality • Wider range of materials Other appropriate responses should be credited. 1(b) Calculate KPX’s expenses in 2024. Show your working. 2 Award only 1 mark if $300 million is written as part of the answer but is not given as the final answer. Award 2 marks for a correct answer. Award 1 mark for correct method but incorrect answer. For 2 marks answer must be in millions. Correct answer [2] i.e. $300 million $ sign not required. Correct method but incorrect answer e.g. Max 1 for 300 on own. • Gross profit – profit [1] • $390m – $90m [1] If correct answer given with no working shown, award 2 marks. 1(c) Outline two ways KPX’s Finance Director could use the 4 To use words from the stem as application, the reference financial data in Table 1.1. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant way (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: • Computers Points might include: • Factory • Show whether made a profit [k] which is $90m [app] • Imports raw materials / 60% of raw materials • Calculate profit margin [k] for the factory [app] • Lean production • Calculate gross profit margin [k] when importing raw • $750m (revenue) materials [app] • $360m (cost of sales) • Help make decisions about whether to continue/stop • $390m (gross profit) production [k] of computers [app] • $90m (profit) • To track performance against objectives/time [k] • 52% (gross profit margin) • To compare performance against other businesses [k] • 12% (profit margin) • Support a loan application [k] • $300 m (expenses) OFR applies Other appropriate responses should be credited. Other appropriate examples can be credited. Award ‘Use ratio analysis’ where no specific examples given. 1(d) Explain two methods of lean production KPX could use. 6 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point Award 1 mark for identification of each relevant method being made. (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: Award 1 mark for each relevant explanation (max 2). • Computers • Factory Points might include: • Imports raw materials / 60% of raw materials • Just-in-time (inventory control) / JIT [k] when importing • $750m (revenue) raw materials [app] reducing amount of space / • $360m (cost of sales) inventory held / lower storage costs [an] • $390m (gross profit) • Kaizen [k] to help eliminate mistakes/errors [an] when • $90m (profit) making computers [app] • 52% (gross profit margin) • 12% (profit margin) Other appropriate responses should be credited. • $300 m (expenses) OFR applies Other appropriate examples can be credited. Analysis can focus on explaining how the method works or an advantage of using the method. Some points can used as [an] of different methods, but only award once e.g. lower cost, fewer mistakes. 1(e) Explain two reasons why profit is important for a 6 This is a general question so there are no marks for business. Which reason is likely to be the most application. important? Justify your answer. To access evaluation must discuss two reasons. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. For evaluation to be awarded justification will usually follow Award up to 2 marks for a justified decision about which on from relevant analysis of points. reason is likely to be the most important. Some [an] can be used for more than one reason but only Points might include: award once. • Provides a source of funds [k] as no interest to pay [an] • Reward for risk-taking [k] as owners invest their money in hope of making a return on investment / motivate them to continue [an] • Represents a return on shareholder/owner’s investment/enterprise [k] as otherwise they could invest elsewhere [an] • Help attract investors/finance [k] which could help the business to expand [an] • Measure of success [k] as low profit could suggest the business is not worth continuing/starting up [an] • Need for long-term survival [k] Other appropriate responses should be credited. Justification might include: It can provide a source of funds [k] for which there is no interest to pay [an]. It is also a reward for risk-taking [k] as owners invest their money in the hope of making a return on their investment [an]. Providing a source of funds is most important because if successful, this could provide the owners with more profit in the future [eval] which may even lead to greater returns for owners [eval].

Mark scheme

2(a) Define ‘entrepreneur’. 2 For 1st mark need idea of start a business. Award 2 marks for a full definition. Award 1 mark for a partial Take a risk is [+1] only. definition. • An individual who takes the financial risk of starting (and managing) a new business [2] • A person who takes the risk for a new business venture [2] Partial definition e.g. • A person who starts/sets up a business [1] 2(b) Identify two reasons why a governments support start- 2 Only award the first two responses given. up businesses. Do not award: Award 1 mark per reason (max 2). • Examples of government support. Points might include: • Create jobs / reduce unemployment • Increase competition • Increase output / improve gross domestic product / increase GDP • Generate taxation/taxes • Motivate/encourage entrepreneurs • (Business) can grow (into larger businesses in the future) • Reduce imports / increase exports • Provide a wider variety of goods/services Other appropriate responses should be credited. 2(c) Outline two opportunities for Max’s business of using 4 To use words from the stem as application, the reference ecommerce. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant opportunity (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: • Entrepreneur Points might include: • Books • Lower rent / no/few shops needed [k] so may not need • New/start-up business as much government support [app] • Government support • Widen market / more potential customers / orders can • Market research be taken 24/7 [k] for the books [app] • Build customer loyalty • Website can be used to promote the business [k] which is helpful for this new business [app] Other appropriate examples can be credited. • Easy/quick to update [k] for this entrepreneur [app] • Can provide detailed information [k] alongside the Benefits must be to the business not to customers. market research [app] • Fewer employees needed [k] Other appropriate responses should be credited. 2(d) Explain two ways Max could use market research to 6 To use words from the stem as application, the reference help make business decisions. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant way (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: Award 1 mark for each relevant explanation (max 2). • Entrepreneur • Books Points might include: • New/start-up business • Identify consumer needs / identify target market [k] as • Government support it’s a new business [app] to ensure sales [an] • Ecommerce • Identify competition [k] which may influence his • Build customer loyalty marketing/pricing [an] for his books [app] • Identify market size/trends/demand [k] to know what Other appropriate examples can be credited. products to stock [an] which may help build customer loyalty [app] Some points can be [k] or [an] but only award once. • How to promote its products [k] to raise awareness [an] as plans to use ecommerce [app] Do not award: • What/amount of inventory to buy [k] to keep variable • Methods of market research costs low [an] • Set prices/decide what prices to set [k] to ensure business can breakeven / cover costs [an] Other appropriate responses should be credited. 2(e) Explain two ways a business could use to build 6 This is a general question so there are no marks for customer loyalty. Which is likely to be the best way for a application. new business to use? Justify your answer. To access evaluation must discuss two ways. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. For evaluation to be awarded justification will usually follow Award up to 2 marks for a justified decision about which is on from relevant analysis of points. the best way for a new business to build customer loyalty. Some answers could be awarded as either [k] or [an] but do Points might include: not award the same point twice. • Offer good customer service / train employees [k] which can make customers feel valued / builds trust [an] • Loyalty (reward) scheme / special offers/discounts to regular customers / membership discounts [k] so they have an incentive to return [an] but it takes time/cost to set up/operate [an] • Build customer relationships / communicate with customer or examples e.g. use newsletters to communicate [k] so customers remember your business [an] • Ask for feedback / carry out market research [k] so the items being sold match customer needs [an] • Respond to complaints quickly [k] so that customers are less likely to go to other businesses [an] • Offer extra services or examples such as after sales service / delivery / credit facilities [k] which show that the business cares [an] 2(e) Other appropriate responses should be credited. Justification might include: One way is to offer good customer service [k] which can make customers feel valued [an]. Another way is to respond to complaints quickly [k] so that customers are less likely to go to other businesses [an]. Offering good customer service is the best way for a new business because this is likely to reduce the number of mistakes which can help reduces the likelihood of complaints [eval] and improve its reputation which could help the new business compete [eval].

Mark scheme

3(a) Identify two ways business activity can affect the 2 Only award the first two responses given. environment. Award 1 mark per way (max 2). Points might include: • Pollution (or examples) • Use up green space / deforestation / loss of habitat • Deplete natural resources / overmining • (Traffic) congestion Other appropriate responses should be credited. 3(b) Identify two reasons why a business should respond to 2 Only award the first two responses given. environmental pressures. Award 1 mark per reason (max 2). Points might include: • Enhance/protect brand image / reputation • Attract/maintain sales • Reduce risk of customer boycott • Differentiate from competitors • To avoid pressure group action • Help recruit employees • Help retain employees • Help attract investors • Reduce risk of legal action/fines / ensure meets legal standards Other appropriate responses should be credited. 3(c) Outline two ways economic growth might affect STB. 4 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point Award 1 mark for each relevant way (max 2). being made. Award 1 mark for each relevant reference to this business (max 2). The following words are likely to be appropriate for this question: Points might include: • (Builds) houses / construction industry • High demand/sales [k] for houses [app] • 13 500 (houses) • More difficult to recruit/find suitable employees [k] for • 5000 employees / builders job production [app] • Public limited company (PLC) • High(er) business profits likely [k] for this public limited • Job production company [app] • Can increase output [k] above 13 500 (houses) [app] Other appropriate examples can be credited. • Increase in/high level of business confidence for STB [k] • STB may consider more investment [k] • Employees may ask for higher wages [k] • Increased rent costs / less choice of location [k] Other appropriate responses should be credited. 3(d) Explain two benefits to STB of using job production. 6 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point Award 1 mark for identification of each relevant benefit (max being made. 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: Award 1 mark for each relevant explanation (max 2). • Public limited company (PLC) • (Builds) houses / construction industry Points might include: • 13 500 (houses) • Motivate employees [k] helping lower absenteeism / • 5000 employees / builders increase retention [an] among its 5000 employees [app] • (Economic) growth • Could set high(er) price [k] for each house [app] which may help increase added value/increase profit margin Other appropriate examples can be credited. [an] • Meet exact customer requirements/needs [k] can help Some analysis can be awarded for different benefits but only brand loyalty / increase competitive advantage [an] for award once. this public limited company [app] • Unique/one-off product / specialised products / USP [k] Some points could be [k] or [an] but only award once. • High-quality goods/service [k] Other appropriate responses should be credited. 3(e) Do you think employees are the most important 6 This is a general question so there are no marks for stakeholder group for a manufacturing business? application. Justify your answer. Candidates can focus solely on employees and still access Award up to 2 marks for identification of relevant points. evaluation. Award up to 2 marks for relevant development of points. Award up to 2 marks for justified decision about whether For evaluation to be awarded justification will usually follow employees are the most important stakeholder group for a on from relevant analysis of points. manufacturing business. Some points can be relevant to more than one stakeholder Points might include: group [an] but only award once. • Make/produce the products [k] otherwise there is nothing to sell/cannot meet demand [an] • Responsible for quality [k] which could improve/damage its reputation [an] • Without sufficient employees the business may not be able to meet demand [k] Other stakeholder groups include: • Shareholders/owners [k] who provide finance / invest money / capital for the business [an] • Customers [k] as they buy the products [an] generating revenue [an] • Suppliers [k] who provide materials/inventory [an] • Local community [k] who provide the workers for the business [an] • Government [k] as it provides the legal framework in which the business operates [an] • Bank [k] who provide finance/loans [an] Other appropriate responses should be credited. 3(e) Justification might include: Employees are important as they make the products [k] otherwise there is nothing to sell [an]. Another stakeholder group is customers [k] as they buy the products [an]. Customers are the most important stakeholder because without them, the manufacturing business cannot generate revenue, which is necessary to pay the costs including wages [eval] whereas the business could use machinery instead of some employees. [eval]

Mark scheme

4(a) Define ‘tertiary sector’. 2 Who the services are sold to is +1 only. Award 2 marks for a full definition. Award 1 mark for a partial Do not award: definition. • Examples of businesses such as delivery business, accountant, shops as these does not explain the term. • Industry/industries which provide services to • Names of shops/retailers. consumers/customers and/or other sectors of the economy [2] • Businesses that supply a service to consumers and/or other businesses [2] Partial definition e.g. • Provide services [1] 4(b) Define ‘job description’. 2 1 mark for what includes e.g. examples of elements. Award 2 marks for a full definition. Award 1 mark for a partial 1 mark for link to job/position. definition. Explain plus e.g. of content can get 2 marks. • Outlines the responsibilities and duties to be carried out by someone to do a (specific) job [2] Examples can be 1 OR +1. • A list of the key points about a job, job title, key duties, responsibilities and accountabilities [2] Max 1 if there is any reference to skills/qualifications. • A description of the tasks, roles, and responsibilities of a particular position [2] Partial definition e.g. • States what the job involves [1] 4(c) Identify four financial rewards a business could use. 4 Only award the first four responses given. Award 1 mark per financial reward (max 4). Points might include: • Time-rate • Piece-rate • Salary • Bonus • Commission • Profit sharing • Fringe benefits or examples e.g. discounts on business goods • Share ownership Other appropriate responses should be credited. 4(d) Explain two ways ZPR could use to advertise its job 6 To use words from the stem as application, the reference vacancies externally. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant way (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: Award 1 mark for each relevant explanation (max 2). • Tertiary sector • Restaurant Points might include: • 20 (employees) • National newspapers [k] especially as it is difficult to • Job description recruit employees [app] so could attract people from a • (2) chefs/cooks wider area/whole country [an] • Difficult to recruit employees • Recruitment agencies [k] as need 2 chefs [app] and the • Financial rewards agency will do all the work for the business (saving time) [an] Other appropriate examples can be credited. • Specialist magazines [k] such as one aimed at restaurants [app] as potential employees are more likely Analysis can focus on explaining the way or an advantage of to see it [an] using the way. • Company website [k] of this tertiary sector business [app] as there is likely to be no fee/free [an] Some analysis can be used for different points but only • Online recruitment sites [k] which can reach a large award once. number of people [an] • (Government run) job centres [k] • Visiting universities/colleges [k] • Local newspapers [k] Other appropriate responses should be credited. 4(e) Explain two factors a business should consider when 6 This is a general question so there are no marks for deciding who to recruit. Which factor is likely to be most application. important for a tertiary sector business? Justify your answer. Some analysis could work for more than one factor, but only award once. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. To access evaluation must discuss two factors. Award up to 2 marks for a justified decision as to which factor is likely to be the most important for a tertiary sector For evaluation to be awarded justification will usually follow business to consider when deciding who to recruit. on from relevant analysis of points. Points might include: • Experience/skills [k] as this shows the person is able to do the job [an] AND/OR may expect higher wages [an] • Education/qualifications [k] as person is likely to make less mistakes / provide better service [an] • Personality/attitude/whether trustable [k] as may want someone willing to learn [an] • Punctuality/disciplinary record [k] as if they are late, it could cause delays [an] Other appropriate responses should be credited. Justification might include: One factor is skills [k] as this shows that the person is able to do the job [an]. Another factor is personality [k] as someone with the right personality may be more willing to learn [an]. Skills are the most important as fewer mistakes can lead to a better reputation [eval] which is especially important for a tertiary sector business, whereas simply being willing to learn does not mean they can do the job [eval].