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IB1210

The Association of Business Executives Certificate 1.1 IB

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Introduction to Business
Afternoon 1 December 2010

1 Time allowed: 3 hours. 2 Answer any FOUR questions. 3 All questions carry 25 marks. Marks for subdivisions of questions are shown in brackets. 4 No books, dictionaries, notes or any other written materials are allowed in this examination. 5 Calculators, including scientific calculators, are allowed providing they are not programmable and cannot store or recall information. Electronic dictionaries and personal organisers are NOT allowed. 6 Candidates who break ABE regulations, or commit any misconduct, will be disqualified from the examinations. 7 Question papers must not be removed from the Examination Hall.

IB1210

ABE 2010

F/500/3659

Answer any FOUR questions Q1 (a) Using business examples, identify the differences between: (i) (ii) (iii) (b) The secondary sector and the tertiary sector Corporate objectives and corporate strategy Primary research and secondary research

(12 marks)

A young university graduate is planning to establish her own business. Describe the inputs that she might need to establish her business. (13 marks) (Total 25 marks)

Q2

(a)

Explain each of the following marketing terms: (i) (ii) (iii) (iv) Niche market Skim pricing Extension strategies Marketing mix

(12 marks) (13 marks) (Total 25 marks)

(b)

Explain how the market for housing is segmented.

Q3

(a)

Explain each of the following financial terms: (i) (ii) (iii) (iv) Sale and leaseback Venture capital Preference share Trade credit

(12 marks)

(b)

Explain the services and benefits for a business provided by: (i) (ii) A factoring company A leasing company (13 marks) (Total 25 marks)

Q4

(a)

Identify and explain the factors that could influence the choice of location for a large retail outlet such as a supermarket. (15 marks) Retailers such as supermarkets and department stores sometimes have large quantities of stock. Explain five costs associated with holding large quantities of stock. (10 marks) (Total 25 marks)

(b)

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Q5

(a)

Explain the term labour turnover and how it might be calculated. Give an equation. (5 marks) Comment on why a business should be worried about a rising trend in labour turnover among its workforce. (10 marks) Explain how each of the following might help to reduce labour turnover: (i) (ii) Job enrichment Team working (10 marks) (Total 25 marks)

(b)

(c)

Q6

(a)

Following a series of takeovers, a furniture manufacturer now supplies a national market. Identify and explain four economies of scale that might be available to this company. (16 marks)

(b)

At present the business uses a batch production system to produce its furniture. Explain the advantages and disadvantages associated with this form of production. (9 marks) (Total 25 marks)

Q7

(a)

Explain how each of the following changes will affect a UK business producing expensive luxury items for export to the USA: (i) (ii) (iii) A fall in interest rates in the USA A fall in the value of the US dollar (the currency in the USA) A slowdown in economic growth in the USA

(9 marks)

(b)

Using PEST analysis, show how external factors can influence a business. (16 marks) (Total 25 marks)

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[Turn over

Q8

(a)

Explain one service that each of the following institutions can provide for a business: (i) (ii) (iii) (iv) An insurance company A bank A management consultancy An advertising agency

(16 marks)

(b)

Consumers are concerned about the impact that businesses have on the worlds natural environment. Explain three ways in which a business could alter its operations in order to take advantage of this growing environmental concern. (9 marks) (Total 25 marks)

End of Question Paper

IB1210

7626-101-1