Edexcel IAL Business 1.3.5 Entrepreneurs & Leaders

Practise Edexcel Business questions on entrepreneurial characteristics, leadership and business ownership, applying strengths and limitations to a real case.

Exam points

apply entrepreneurial and leadership characteristics to a business case
evaluate how ownership and leadership choices affect objectives and growth

Covered syllabus points

1.3.5.1a - Creating a business 1.3.5.1b - Running and developing a business 1.3.5.1c - Intrapreneurship 1.3.5.1d - Barriers to entrepreneurship 1.3.5.1e - Entrepreneurial risk and uncertainty 1.3.5.2a - Entrepreneurial characteristics and skills 1.3.5.2b - Motives for setting up businesses 1.3.5.3a - Survival objective 1.3.5.3b - Profit maximisation objective 1.3.5.3c - Other business objectives 1.3.5.4a - Opportunity cost 1.3.5.4b - Trade-offs

[Maximum number: 2]

Extract E Mr Cory's Cookies Young entrepreneur Cory Nieves is also known as Mr Cory. When he was five years old he started selling hot chocolate in his neighbourhood to raise money to buy a car for his family. Cory then began selling lemonade and cookies to increase the buying options for his loyal customers. His passion and entrepreneurial spirit, combined with a love of treats, led him to be the owner of Mr Cory's Cookies at six years old. Cory's mother, Lisa, spent many months learning how to bake the cookies. She then test marketed each batch in the local area. The business became famous in the local community for Cory's chocolate chip cookies, which continue to be the best seller. The product line has expanded, and the cookies are manufactured using only natural and high-quality ingredients. The cookies are now only available online. Due to the publicity he received as a young entrepreneur, Cory has had many television appearances and has worked with large companies and brands such as Mercedes Benz, Ralph Lauren, TOMS and Macys. In addition, he has worked with non-profit organisations such as the Children's Aid Society.

Extract F The value of Mr Cory's Cookies The sweets and snacks market is extremely competitive and the market is growing. In 2021 Cory Nieves was 17 years old and the value of his business had increased to $ 1500000. Value of Mr Cory's Cookies (2018-2021)

Table for Question 1.3.5 - Entrepreneurs and leaders question 1 — Edexcel A-Level Business AS

Define the term 'entrepreneur'. (Extract E, line 2)

[Maximum number: 8]

Sources for use with Extract E Niche brands are increasing their mass market appeal In the last 10 years there has been an increase in the number of health and well-being brands moving from a niche to a mass market. Many health products are benefitting from increased revenue, due to growing consumer desires to live healthier lives. These brands are no longer viewed as exclusive products and are now purchased by more customers each year. One of these brands is Pukka, which sells premium priced speciality tea. The global speciality tea market is predicted to grow by $50bn between 2021 and 2026. Extract F About Pukka Pukka sells a range of speciality teas including herbal, organic and fruit teas. Entrepreneurs Sebastian Pole and Tim Westwell launched Pukka in 2001. Sebastian had been interested in plants and conservation for many years. He was determined to follow his dream to start a business selling a healthy product. Sebastian saw an advertisement of Tim’s which offered to help start up an ethical business. They agreed to meet to discuss their ideas and Pukka was formed shortly afterwards. From the first moment Tim and Sebastian met, they were the perfect match. Although they had completely different personal skills, they shared a common marketing objective, to create a business that would benefit the health of people. Tim had 10 years’ experience as a business management consultant. They spent many hours in Tim’s house planning their future strategy. They worked evenings and weekends to turn their ideas into a successful business.

Discuss the barriers to entrepreneurship Sebastian may have faced when thinking of starting a business.

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
Indicative content
- Entrepreneurship is the activity of setting up a business, taking on risks, normally in the hope of making a profit
- There are many barriers to entrepreneurship including access to finance, lack of skills and the fear of failure/lack of confidence
- Whilst Sebastian had a passion for plants and
conservation, he may not have had any business skills to help him start the business
- It is possible that Sebastian did not have sufficient access to finance to fund the start-up costs of a new business
- As the speciality tea market is growing, Sebastian may have been faced with a high level of competition. It may have been difficult/costly to establish a brand name
- However, Sebastian overcome his lack of knowledge by forming a partnership with Tim who had worked as a business consultant and is likely to have possessed the know-how about business start-ups
- The two partners both possessed entrepreneurial
characteristics needed to start a business. They were both hard working and determined to succeed
- They both shared a passion for the product as they were both concerned about the environment and healthy living.
This gave them the same business objective to pursue

Level

Mark

Level 0

Level 1

1-2

Level 2

3-5

An attempt at an assessment is presented that is unbalanced, and unlikely to show the significance of competing arguments.

Level 3

6-8

Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

Logical chains of reasoning, showing cause(s) and/or effect(s).

Assessment is balanced, well contextualised, using quantitative and/or qualitative information and shows an awareness of competing arguments/factors.

Question

Assess the challenges that a business, such as Pukka, may have faced when moving from a niche to a mass marketing strategy.

Indicative content

[Maximum number: 10]

Sources for use with Section A

Extract A

Alibaba Group

The Alibaba Group was established in 1999. The business was inspired and led by entrepreneur Jack Ma, a former English teacher from China. Jack Ma and 17 other people invested in the business. From the beginning, the business focused on using technology to enable small businesses to grow and compete more effectively in the global economy. Its mission is ‘to make it easy to do business anywhere’. Jack Ma is now a billionaire.

The Alibaba Group’s first website allowed small Chinese exporters and entrepreneurs to sell internationally. The Alibaba Group has grown into a global leader in online and mobile commerce. It is a world recognised brand and the fastest growing e-commerce business, employing thousands of people. The Alibaba Group has expanded and now has many websites. Its three main websites are Alibaba, Taobao and Tmall. Alibaba is for business-to-business sales (B2B). Taobao is consumer-to-consumer sales (C2C), similar to eBay, though it does not charge a selling fee like competitors such as eBay. Tmall is for business-to-consumer sales (B2C), similar to Amazon. Transactions on its websites totalled $248 bn in 2018, which was more than eBay and Amazon combined.

The Alibaba Group has a programme called the ‘Tech For Change Initiative’ that aims to support female education through free online training and free access to computing resources. It aims to help one million women become computer developers by 2030. The Alibaba Group donates funding for healthcare for the underprivileged and for wildlife protection.

Extract B

Leadership of Jack Ma

Jack Ma, a Chinese entrepreneur and founder of the Alibaba Group, built a large team around him that trust his decision making. He is known for his paternalistic style of leadership. He believes in taking responsibility for the actions of the group.

In an interview, Jack Ma mentioned how his paternalistic leadership helped him to succeed. He said he gave his team the confidence to follow his commands as he took the responsibility for anything that went wrong. He also said that his job is to make sure his team is happy, because when the team is happy, they can make customers happy.

(a)

Explain one risk Jack Ma may have taken when setting up the Alibaba Group.

[ 2 ]

(b)

Discuss if profit maximisation is the main business objective of the Alibaba Group.

[ 8 ]

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Profit = Total Revenue (TR) - Total Costs (TC). Therefore, profit
maximisation occurs at the biggest gap between total revenue and total
costs
- Profit maximisation is assumed to be the main business objective of
most entrepreneurs. Jack Ma is now a billionaire, which may support
profit being the primary motivation and objective of the business
- Alibaba Group keeps operational costs low by trading on the internet,
which helps to minimise total costs and increase profitability
- Alibaba Group has expanded the business (Tmall) rapidly indicating that
maximising profits may be the main objective for the business
- Profit is important in order to fund/support its ethical and
social initiatives
- However, Alibaba Group appears to have several social
objectives. Its 'Tech For Change Initiative' aims to support
female education through free online training. It donates
funding for healthcare for the underprivileged. This might
indicate profit maximisation is not its main objective
- It does not charge a fee for selling on its C2C website Taobao,
which may indicate that profit maximisation is not the
primary objective of the business.

Level

Mark

Descriptor

0

No rewardable material.

Level 1

1-2

Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.

Level 2

3-5

Accurate knowledge and understanding, applied accurately to the
business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced and
unlikely to show the significance of competing arguments.

Level 3

6-8

Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or
qualitative information, and shows an awareness of competing
arguments/factors.

Question
Number

Indicative content

All question bank results loaded

Covered syllabus points

1.3.5 - Entrepreneurs and leaders question 1

1.3.5 - Entrepreneurs and leaders question 2

1.3.5 - Entrepreneurs and leaders question 3

Question (a)

Question (b)