0450 Business Studies November 2025 Question Paper 21

1 (a) Explain two advantages and two disadvantages of a business being a private limited company. Advantage 1: Advantage 2: Disadvantage 1: Disadvantage 2: [8] , ,

(b) Consider the following three economies of scale for LB. Which economy of scale is likely to have benefited LB the most? Justify your answer. • Financial • Purchasing • Managerial Financial: Purchasing: Managerial: Conclusion: [12] , ,

2 (a) Explain two advantages and two disadvantages to LB of using primary market research. Advantage 1: Advantage 2: Disadvantage 1: Disadvantage 2: [8] , ,

(b) Consider the advantages and disadvantages of the two options LB could use to distribute its new product range in country X. Which channel of distribution should LB use? Justify your answer. • Selling to specialist retail shops • Selling directly to customers through LB’s website Selling to specialist retail shops: Selling directly to customers through LB’s website: Recommendation: [12] , ,

3 (a) Explain two reasons why working capital is important to LB. Reason 1: Explanation: Reason 2: Explanation: [8] , ,

(b) Using Appendix 2 and other information, consider the three employees that LB could make redundant. Which employee should LB choose? Justify your answer. • Naga • Reeta • Amy Naga: Reeta: Amy: Recommendation: [12] , ,

4 (a) Explain two factors LB’s managers should consider when deciding which method of communication to use to inform its employees about the expansion plans. Factor 1: Explanation: Factor 2: Explanation: [8] , ,

(b) Using Appendix 3 and other information, consider the benefits and drawbacks for country Y of LB building its new factory there. Do you think the benefits for country Y are greater than the drawbacks? Justify your answer. Benefits: Drawbacks: Conclusion: [12] , ,