CAIE IGCSE Business Studies 1 understanding business activity
Use this Understanding Business Activity hub to connect definitions, case application and justified decisions across the first syllabus unit.
- Syllabus
- 2027–2029
- Course
- Business 0264
Covered syllabus points
1. Understanding business activity question 1
Avtar owns a car repair business which operates in the private sector. It is a small business with 2 full-time employees. Avtar wants to find out the best way for a business to increase added value. Avtar's business needs finance for many reasons. Avtar wants to know how an economic recession might affect his business.
Question (a)
(a)
Identify two features of a private sector business.
Feature 1:
Feature 2:
[ 2 ]
Question (b)
(b)
Identify two reasons why a business might remain small.
Reason 1:
Reason 2:
[ 2 ]
Question (c)
(c)
Explain two ways a business can increase added value. Which is likely to be the best way for a business to use? Justify your answer.
[ 6 ]
1. Understanding business activity question 2
WMH is a business which operates in the secondary sector. It makes furniture including tables and chairs. WMH's employees are all members of a trade union. The Managing Director knows the business is likely to remain small. She is considering introducing new technology into WMH's factory. She also knows it is important for a manufacturing business to choose a suitable location for a factory.
Question (a)
(a)
Define 'secondary sector'.
[ 2 ]
Question (b)
(b)
Identify four reasons why a business might remain small.
Reason 1:
Reason 2:
Reason 3:
Reason 4:
[ 4 ]
1. Understanding business activity question 3
Nancy wants to be an entrepreneur. She has analysed market research data and decided to start up a book shop. Nancy has identified a suitable location and prepared a business plan. Nancy is calculating her total costs. She will use this information to help her complete a break-even chart as shown in Figure 2.1. Nancy is also considering using e-commerce.
Break-even chart for Nancy's new business
Explain two ways having a business plan could help Nancy.
Way 1:
Explanation:
Way 2:
Explanation:
1. Understanding business activity question 4
CFG is a social enterprise. It buys cocoa beans from local farmers and then uses the beans to make chocolate. Being ethical is important to the business. CFG has developed a new chocolate bar. The Marketing Manager plans to use skimming as its pricing method, and retailers as its distribution channel for the new product. He knows there are many legal controls over marketing that might affect a business.
Define 'social enterprise'.
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