Oct/Nov 2025

WMH is a business operating in the secondary sector. It produces furniture, such as tables and chairs. All of WMH’s employees belong to a trade union. The Managing Director realises that the business is likely to stay small. She is thinking about introducing new technology into WMH’s factory. She also understands that, for a manufacturing business, selecting an appropriate location for a factory is important.

Classification of businesses

CPW is a private sector business with several objectives. It retails electrical goods, including kettles and ovens, from its 36 shops in country X. CPW also provides a delivery service. To avoid import tariffs, the business purchases all of its inventory from local suppliers. The Finance Director is examining CPW’s statement of financial position. An extract is shown in Table 2.1. He has been asked to find a source of finance to buy 10 new delivery vehicles.

Statement of financial position

SBL is a fast food restaurant that sells 900 chicken burgers every week. It employs 14 workers. The owner, Vicki, gives her employees training, but she does not make use of delegation at present. She is drawing up a break-even chart to work out SBL’s margin of safety. A partly finished break-even chart is shown in Fig. 3.1. Vicki would like to understand how an economic recession could influence her business. Fig. 3.1 shows a break-even chart for SBL. The vertical axis is Costs/revenue $ and the horizontal axis is Output/sales per week (units). Label X indicates the point where the total cost and revenue lines cross (break-even point). Label Y indicates the revenue line close to the top-right of the chart.

Costs, scale of production and break-even analysis

MTL is a sizeable business that sells children’s toys. MTL aims to behave ethically towards all of its stakeholder groups, including its 430 employees. The market in which MTL operates has become more competitive. The business uses several methods to promote its products. A strong brand image matters. MTL’s directors are thinking about entering a new market in another country. They recognise that there could be problems if they decide to do so.

Marketing strategy

BEI is a multinational firm that makes aeroplanes. Quality assurance matters to BEI. It employs 5000 people. BEI’s directors have announced plans to shrink the workforce (downsize). The Human Resources Director is deciding which employees should be made redundant. Details of employee A are given in Table 1.1.

Enterprise, business growth and size

OTK is a small jewellery store in the middle of Main City. It does not yet make use of ecommerce. OTK purchases its jewellery from local suppliers, and payment is made 30 days later. The shop manager is reviewing OTK’s cash flow forecast and is worried that the business could face a short-term cash flow issue.

Cash-flow forecasting and working capital

Miguel intends to set up a gym (sports club). It would provide a variety of fitness classes, including yoga. The business will be organised as a partnership with his sister. Miguel believes the business will stay small in scale. Secondary market research will be used to support decisions, including the choice of pricing method. Miguel is aware that selecting a suitable location matters for any new business.

Location decisions

DJU makes clothing such as jeans and trousers. Its factory has 90 employees. DJU applies specialisation when producing its goods. The Managing Director is examining DJU’s cost and output figures. An extract is given in Table 4.1. She wants to find out how lower interest rates could influence the business. DJU’s directors are looking at different ways a business may grow, including taking over a competitor.

Enterprise, business growth and size

Explain two advantages and two disadvantages that a business has when it operates as a private limited company.

Types of business organisation

Explain two advantages and two disadvantages for LB of using primary market research.

Market research

Explain two reasons why working capital is significant for LB.

Cash-flow forecasting and working capital

Explain two factors LB’s managers should take into account when choosing a communication method to tell employees about the expansion plans.

Internal and external communication

Explain four ways in which a business plan could help Kathryn.

Internal and external communication

Explain two benefits and two limitations of a business that operates in a niche market.

Marketing mix

Explain two reasons for FF’s use of job production.

Production of goods and services

Explain two reasons why high quality matters to FF.

Environmental and ethical issues