Paper 1 : Oct/Nov 2024 – 12

Instructions:

• Carefully review all given instructions and past paper guidelines before starting each practice session.

• Attempt the past paper questions independently first, just as in an actual exam environment.

• Use a notebook or exam-style sheets to write your answers. Ensure your work is neat, clearly labeled with question numbers, and follows proper exam format.

• After completing each section, check your answers using the provided marking schemes and examiner reports (if available).

• Review your mistakes and rewrite incorrect answers to improve accuracy and exam technique.

• If you find any questions difficult or unclear, watch the video given below for that paper. In that video, each paper is discussed in detail.

• If you still face difficulties or have doubts after watching the video, note them down and discuss them with your instructor or course coordinator for clarification.

• Revise question-solving strategies and repeat similar past paper questions to strengthen your understanding and performance.

Click Here to download the Video Handout

Good morning everyone. Today we are going to go through a full O Level Business Studies Paper 1. We’ll discuss each question step by step so that by the end of this lesson, you’ll understand how to write clear, confident answers that score maximum marks. We’ll cover four businesses: Avtar’s Car Repair Business, SNT Soft Drinks Company, HRO Toys, and TLA Hotel. As we go along, I’ll also explain the marking guidance and give you simple tips for how to structure your responses.

Let’s start with Question 1 – Avtar’s Car Repair Business.

The first part, 1(a), asks you to identify two features of a private sector business. This is a short two-mark question, so all you need are two simple points. You could say that a private sector business is owned by individuals or groups rather than the government, and that it operates mainly to make a profit. Each valid point is worth one mark, so there’s no need for long explanations here.

In 1(b), you are asked to identify two reasons why a business might remain small. A business may stay small because the owner prefers to keep full control over decisions and avoid the complexity of managing a large firm. Another reason could be that it operates in a small or niche market where there is limited demand, so growing larger might not be practical. Both reasons should be written clearly and directly.

Moving on to 1(c), the question asks why Avtar might need short-term and long-term finance. Short-term finance might be needed to pay daily expenses such as purchasing spare parts or paying wages while waiting for customers to settle their bills. Long-term finance might be needed to buy expensive equipment, such as diagnostic tools or machinery, or to expand the workshop. Short-term finance helps the business run smoothly day to day, while long-term finance supports growth and investment in the future.

Now, 1(d) asks you to explain two ways an economic recession might affect Avtar’s business. During a recession, consumer spending falls because people have less disposable income. This means customers might delay or avoid car repairs unless absolutely necessary, causing Avtar’s revenue to drop. Another effect is that banks often become more cautious about lending, so Avtar might find it harder to get loans to buy new tools or expand his workshop. Each point should be explained clearly and linked to how it would impact Avtar’s small business.

Finally, in 1(e), you are asked to explain two ways a business can increase added value and to decide which is likely to be the best. Added value can be increased by improving product or service quality or by offering greater customer convenience. For example, Avtar could use better quality spare parts or provide extra services like online booking or free vehicle pick-up and drop-off. Between these, improving customer service is probably the best option because it helps build loyalty and reputation, allowing Avtar to charge slightly higher prices without greatly increasing costs. Always end your six-mark questions with a short justified conclusion to reach the top level of marks.

Now, let’s move on to Question 2 – SNT Soft Drinks Company.

In 2(a), you are asked to define licensing. Licensing is when one business allows another to use its brand name, product design, or technology in exchange for a fee or royalty. This is a definition question, so keep your answer short and accurate to earn both marks.

Next, 2(b) asks you to identify two factors that affect how much inventory a business should hold. Two common factors are customer demand and supplier reliability. If customer demand is high or unpredictable, SNT will need to hold more stock. If suppliers are unreliable or take a long time to deliver, SNT may also keep more inventory to avoid running out of drinks.

For 2(c), you must outline two benefits of batch production. One benefit is that batch production allows SNT to lower its average costs by using machinery efficiently and taking advantage of economies of scale. Another benefit is that it offers flexibility because the company can produce different flavours or packaging in separate batches, helping to meet various customer preferences. Each explanation should be one short, clear sentence.

In 2(d), you need to explain one advantage and one disadvantage of a joint venture. The main advantage is that SNT can share risks and costs with its partner and gain valuable local market knowledge when entering a new country. The disadvantage is that disagreements may occur between partners over management decisions or profit sharing, which can slow down operations and reduce efficiency. To score full marks, you must explain both sides clearly.

Finally, 2(e) asks whether the advantages of being ethical are greater than the disadvantages. Acting ethically helps build a strong reputation, attracts loyal customers, and motivates employees who feel proud to work for a responsible company. However, ethical behaviour can increase costs because fair-trade suppliers or environmentally friendly production methods are often more expensive. In conclusion, the advantages usually outweigh the disadvantages because ethical practices build long-term trust, avoid legal issues, and strengthen the company’s brand image.

Now let’s look at Question 3 – HRO Toys.

For 3(a), define non-current assets. Non-current assets are long-term resources such as buildings, machinery, or vehicles that a business uses to operate and does not expect to convert into cash within a year. Writing a full sentence like this earns both marks.

In 3(b), you are asked to calculate the current ratio. You divide current assets by current liabilities, so 250 divided by 200 equals 1.25. Always show your working and final answer to get both marks.

Next, 3(c) asks you to classify some items as assets or liabilities. Trade receivables are current assets because they represent money owed to the business. Inventory is also a current asset because it includes goods ready for sale. Trade payables and overdrafts are current liabilities because they are short-term debts that must be paid within a year. Writing these classifications clearly gets all four marks.

For 3(d), you need to explain one conflict with each stakeholder. Shareholders might want to increase profits by raising prices or cutting costs, but that could upset customers who want affordable, high-quality toys. Shareholders might also delay payments to suppliers to protect cash flow, which harms supplier relationships. Make sure each conflict is explained clearly in one short paragraph.

Finally, 3(e) asks whether the benefits of primary research are greater than the drawbacks. Primary research provides fresh and specific information about customer needs, which helps HRO make better product and marketing decisions. The drawback is that it can be expensive and time-consuming compared to using secondary data. Still, the benefits are greater because accurate and up-to-date data gives HRO a stronger advantage in a competitive market.

Now we come to the last one, Question 4 – TLA Hotel.

In 4(a), you must identify one advantage and one disadvantage to employees of trade union membership. The advantage is that employees have collective bargaining power for better pay and working conditions. The disadvantage is that they might have to take part in strikes or follow union decisions even when they disagree.

For 4(b), you are asked for one benefit and one limitation of induction training. The benefit is that it helps new staff quickly understand company policies and their job roles. The limitation is that it usually doesn’t provide job-specific skills, so extra training may still be required later.

In 4(c), you need to explain one reason each recruitment stage is important. A job description is important because it sets out the duties and responsibilities of the role, helping both the employer and the applicant understand expectations. A job advertisement is important because it communicates the vacancy to potential candidates and helps attract the most suitable people for the job.

Now 4(d) asks you to explain two diseconomies of scale. As TLA grows, communication may become slower or messages may get distorted because of the increased number of staff and departments. Another diseconomy is that employees may feel less recognised in a larger organisation, leading to lower motivation and productivity. Explaining both of these effects clearly will help you earn full marks.

Finally, 4(e) asks whether the advantages of democratic leadership are greater than the disadvantages. Democratic leadership increases motivation and job satisfaction because employees feel involved in decision-making. It also encourages creativity and teamwork. The disadvantage is that decision-making can take longer when everyone’s opinion is considered. However, for a hotel where teamwork and customer service are key, the advantages of democratic leadership clearly outweigh the disadvantages because motivated staff deliver better service and customer experiences.

Before we end, remember this simple rule. For two-mark questions, identify or define briefly. For four-mark questions, identify and explain in context. For six-mark questions, explain both sides and always finish with a justified conclusion. Use the business name in every answer to show context, and write in short, clear sentences. That’s what examiners look for.

So, to summarise today’s class, we covered ownership, finance, ethics, leadership, training, stakeholders, diseconomies of scale, and much more. You now know how to plan short, logical, and well-applied answers for Paper 1. If you follow these techniques and stay calm in the exam, you’ll be well on your way to scoring top grades.

Press “Mark As Complete” Button To proceed

—————————————————————————————————————