Instructions:
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Carefully review all given instructions and past paper guidelines before starting each practice session.
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Attempt the past paper questions independently first, just as in an actual exam environment.
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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.
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After completing each section, check your answers using the provided marking schemes and examiner reports (if available).
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Review your mistakes and rewrite incorrect answers to improve accuracy and exam technique.
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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.
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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.
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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 through the A Level Business Studies Paper 3 from October–November 2023, based on the case study of Calzado Quila, or CQ, a company known for its sustainable footwear. This paper tests how well you can apply business concepts, analyse decisions, and make balanced evaluations based on real data.
Let’s go through the paper step by step so you can understand what the examiners were looking for and how to structure strong, top-band answers.
Let’s start with Question 1, which asked:
“Analyse how the two changes in the economic environment will impact CQ.”
In this question, you needed to think about how external economic factors affect business operations. The first change was the depreciation of country P’s currency. This means that imported raw materials, such as bamboo sourced from the United States, will become more expensive. CQ’s production costs will rise, and unless they raise prices, profit margins will shrink. However, increasing prices could make them less competitive in the market.
The second change is the increase in taxation, which reduces disposable income. This might cause consumers to cut back on non-essential products like fashionable shoes. For CQ, this could lower sales and affect its ability to reinvest or fund expansion plans.
When writing a question like this, make sure you apply each point directly to the case. Avoid just saying “costs increase” or “sales fall.” Instead, say “CQ’s bamboo imports become more expensive” or “CQ may sell fewer sustainable shoes.” That kind of specific link is what examiners reward.
For marking, Level 1 is for identifying the changes, Level 2 is for explaining their effects, and Level 3, which earns 7–8 marks, is for analysing those effects in CQ’s context.
Now let’s move to Question 2, which said:
“Analyse how two qualities of leadership demonstrated by Frederico have contributed to CQ’s success.”
The first leadership quality to discuss is visionary leadership. Frederico saw an opportunity in the sustainable shoe market and created a mission-driven brand that appealed to eco-conscious consumers. His vision guided the business to stand out in a competitive industry.
The second quality is commitment to ethics. By sourcing from ethical suppliers and focusing on sustainability, Frederico built credibility and trust. This not only attracted consumers who care about the environment but also appealed to investors interested in socially responsible businesses.
In questions like this, always connect leadership traits to measurable success. For example, you could say, “Frederico’s ethical approach helped CQ build a loyal customer base and attract investment for expansion.”
To reach Level 3 marks, you must apply both leadership traits to CQ’s real situation. Simply listing traits like “motivational” or “decisive” without examples will limit you to Level 1 or 2.
Next, we have Question 3(a), which asked:
“Calculate CQ’s capacity utilisation.”
You should start by writing the formula: Capacity utilisation = (Actual output ÷ Maximum capacity) × 100.
Plugging in the numbers: (120,000 ÷ 160,000) × 100 = 75 percent.
One clear line with the correct answer is all you need for the full mark. Always show your formula to get method marks even if your final answer is off.
Then Question 3(b) asked:
“Calculate CQ’s rate of inventory turnover.”
The formula is: Inventory turnover = Cost of goods sold ÷ Average inventory.
The cost of goods sold is calculated by subtracting gross profit from revenue: 1.2 million – 0.8 million = 0.4 million.
Then divide 0.4 by 0.13 to get 3.08 times.
You get one mark for the formula, one for the substitution, and one for the correct answer.
Now we move to Question 3(c), which said:
“Evaluate whether introducing lean production will be sufficient to achieve CQ’s operational objectives.”
Lean production aims to reduce waste, improve efficiency, and raise quality. For CQ, adopting lean methods could help improve capacity utilisation, reduce defect rates, and achieve better inventory control. For instance, improving stock management might help them reach their target inventory turnover of five times a year.
However, there are challenges too. Lean production requires staff training and cooperation, and if employees resist change, efficiency gains might be delayed. It also takes time before savings are visible. So while lean production is a good step, it may not be sufficient by itself. CQ might also need to invest in technology or upgrade systems to fully achieve its goals.
Here’s a useful tip: In questions like this, always balance your answer. Start with the positives, then discuss limitations, and end with a short conclusion. You can write something like, “Lean production will help CQ move towards its objectives, but its success depends on how effectively it is implemented.”
Marking for this question is split into three levels: identifying lean benefits at Level 1, explaining their impact at Level 2, and providing evaluation with a conclusion at Level 3.
Question 4(a) asked to calculate the Net Present Value, or NPV. The formula is net savings times the discount factor, minus the initial cost. Substituting the numbers, we get a total of 854,800, and after subtracting the initial cost of 1,000,000, the NPV is negative 145,200 dollars. Always include the dollar sign and show if it’s negative or positive.
Now for Question 4(b), which said:
“Evaluate whether CQ should invest in measures to improve sustainability.”
Even though the NPV is negative, meaning the project doesn’t look profitable in the short term, this investment still aligns perfectly with CQ’s mission of being an eco-friendly brand. Improving sustainability could attract more eco-conscious customers and reduce costs in the long run by cutting energy and water use.
However, the finance manager’s concerns about liquidity are valid. Spending one million dollars could create short-term financial strain. A balanced approach would be to introduce these measures in phases, allowing CQ to protect its finances while still pursuing sustainability goals.
Here’s the tip for this question: link financial analysis to strategic goals. Don’t just say “NPV is negative,” but explain what that means for CQ’s brand and future reputation. That’s how you move from a Level 2 to a Level 3 answer.
Finally, we have Question 5, which asked:
“Evaluate the importance to CQ’s future success of new product development.”
New product development is critical for CQ’s growth. Expanding into products like running shoes could help attract new customers and open markets such as the US. It also keeps the brand fresh and competitive as trends and customer preferences change.
However, developing new products is risky and costly. If the new designs fail or do not match the brand’s quality standards, it could damage CQ’s reputation. That’s why Frederico must balance innovation with quality and cost control.
Your conclusion could be: “New product development is vital for CQ’s long-term success, but it must be supported by careful financial management and strong marketing.”
Marking for this question is again divided into levels. Identifying the importance earns Level 1 marks, explaining it moves you to Level 2, and balancing both benefits and risks with a judgement gets you into Level 3.
If you write in a structured, applied, and balanced way, you’ll be setting yourself up for a strong A Level Business Paper 3 result.
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