The Association of Business Executives

QCF

The Business Environment

29 November 2011, Afternoon

1.

Time allowed: 3 hours.

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2. 
Read the instructions at the top of each section carefully.
The number of questions you have to answer is marked clearly at the top of each section.
Do not answer more questions than instructed.
3. The number of marks per question may vary. Marks for subdivisions of questions and the
total marks for each question are shown in brackets after the question.
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 Examination Regulations (Conduct during the Examinations), or
commit any misconduct, will be disqualified from the examinations.
7.

Question papers must not be removed from the Examination Hall.

STRUCTURE OF PAPER: Answer BOTH sections

SECTION A: Answer ALL SIX questions

Q1-Q4
Q5-Q6

Maximum marks for Section A:

SECTION B: Answer ANY FOUR questions
Maximum marks for Section B:

15 marks
each
60 marks
100 marks

053881

Total marks available for the paper

Q7-Q12

5 marks
each
10 marks
each
40 marks

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ABE 2011

F/601/2811

This paper consists of TWO SECTIONS.

Follow the instructions at the top of EACH section.
SECTION A
You must answer ALL SIX questions in this section.
Questions do not carry equal marks. The mark allocation is shown after each question.
Section A is worth 40% of the total marks available for the paper.
Q1 Using examples, explain the characteristics of public goods.

(5 marks)

Q2 Discuss three main disadvantages of international trade.

(5 marks)

Q3 
Describe three possible benefits to a business of implementing environmentally friendly
policies.
(5 marks)

Q4 All businesses have to undergo change.

Describe one example of resistance to change and explain two ways in which this may be
overcome.
(5 marks)

Q5 
Fashion Footwear Ltd is a medium sized business selling shoes. It has a number of retail
shops across the country.
Using examples, assess the value of using SWOT analysis to monitor the competitive
environment of Fashion Footwear Ltd.
(10 marks)

Q6 
A very successful firm produces and sells bicycles. The manager of the firm wishes to
expand the productive capacity of the business to meet increasing demand.
(a)
Briefly outline two different methods by which a business can grow.
(b)
Explain three ways in which the expansion could be financed.


END OF SECTION A
MAXIMUM MARKS FOR SECTION A: 40

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(4 marks)
(6 marks)
(Total 10 marks)

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(Questions continue overleaf)

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[Turn over

SECTION B
You must answer ANY FOUR questions in this section.
Each question carries 15 marks.
Section B is worth 60% of the total marks available for the paper.
Q7 The car industry operates in an external environment that is subject to volatility and change.
(a)
Explain the likely impact of oil price volatility on the car industry.

(6 marks)

(b) 
Discuss the impact of three other external environmental factors that could affect the
future of the car industry.
(9 marks)
(Total 15 marks)

Q8 
An optician in a medium sized town, trading under the name of Bright Eyes, wishes to sell
spectacles to his customers with a special lens coating developed in his laboratory. He
patented the process and it is now subject to a licence for use.
(a)
Explain the advantages of a licensing process to Bright Eyes.

(3 marks)

(b)
Bright Eyes is one of the many small businesses operating in the country.
In view of the advantages of large firms, explain why so many small businesses
continue to exist.
(12 marks)

(Total 15 marks)

Q9 Supermarkets in the UK operate in a highly competitive market sector.

(a) Using examples, discuss three strategies which supermarkets might use to deter new
entrants from coming into the market and taking market share.
(9 marks)

(b) 
Outline two measures that the UK government could take to control the competitive
activities of supermarkets.
(6 marks)
(Total 15 marks)

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Q10 (a) Explain two ways in which monetary policy is used to control inflation.

(5 marks)

(b) 
The government is reducing inflation through the use of monetary policy. Discuss the
impact of this on each of the following:

(i)

Retailers of motor cars

(ii)

The economy as a whole

(5 marks)
(5 marks)
(Total 15 marks)

Q11 
Businesses today operate in a global context . . . and need an understanding of the process
of globalisation (Worthington and Britton, 2009)
(a)
Explain what is meant by globalisation.




(4 marks)

(b) 
Discuss the advantages and disadvantages of globalisation for a developing country.
(11 marks)
(Total 15 marks)

Q12 
Discuss how changes in the age structure of the population can affect the economy of a
country.
(15 marks)

END OF SECTION B
MAXIMUM MARKS FOR SECTION B: 60

TOTAL MAXIMUM MARKS: 100

END OF QUESTION PAPER

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