EBM N4 November 2023 | Paper 1

EBM N4 November 2023 | Paper 1

QUESTION 1

Indicate whether the following statements are TRUE or FALSE

1.1 The ‘S’ in the SWOT analysis stands for strengths.

True
In SWOT analysis, the letter S stands for strengths. Strengths are the internal advantages that help a business perform well.

1.2 The management plan of a business will include information about its remuneration policy.

True
The management plan deals with how the business will be managed, including staff-related matters such as salaries, wages, and other forms of remuneration.

1.3 Brainstorming is a very popular method of coming up with ideas.

True
Brainstorming is a common idea-generation method because it helps people think of many possible business ideas in a short time.

1.4 People who owe you money are called creditors.

False
People who owe the business money are called debtors. Creditors are the people or businesses that the business owes money to.

1.5 The marketing plan must analyse the marketing environment.

True
A marketing plan must consider the marketing environment so that the business can understand customers, competitors, and market conditions properly.

1.6 You will place necessities and staple goods at the rear of the retail store.

True
Staple goods are often placed at the back of the store so that customers walk through more aisles and see more products before reaching them.

1.7 Examples of industrial products are raw materials and machinery.

True
Raw materials and machinery are industrial products because they are used in the production of other goods or services.

1.8 Innovation is the conversion of a new idea into a new product or service.

True
Innovation means taking a new idea and turning it into something practical, such as a new product or a new service.

1.9 Demographic segmentation establishes the population or number of customers.

False
Demographic segmentation focuses on characteristics such as age, gender, income, and occupation. The number of customers in an area is not demographic segmentation.

1.10 Natural resources are classified as an asset of the business.

True
Natural resources can add value to a business and support production, so they can be classified as assets.

QUESTION 2

Give ONE word for each of the following description.

2.1 They need to research their business idea and when in business continue to get information.

Entrepreneur
An entrepreneur must keep gathering information before starting the business and while running it, so that better decisions can be made.

2.2 Be careful about discussing the details of your business plan with close people.

Secrecy
Secrecy is important because it protects the business idea and prevents others from copying it before the business is established.

2.3 Refers to our national heritage, such as water, air, and animal and plant life.

Natural environment
The natural environment includes natural resources and living things that form part of the country’s natural heritage.

2.4 Appears when a needed product or service is not available.

Gap in the market / shortage
A gap in the market exists when customers need a product or service that is not being supplied properly.

2.5 Ability to do something new, original and different.

Creativity
Creativity is the ability to think of fresh, original, and useful ideas.

2.6 Point at which the income generated from sales equals to total costs.

Breakeven
Breakeven is the point where the business makes neither a profit nor a loss because income is equal to total costs.

2.7 Needs to be developed after the target market has been identified.

Marketing mix
After identifying the target market, the business develops the marketing mix to decide on the right product, price, place, and promotion.

2.8 A wrapping that surrounds a product.

Packaging
Packaging is the material or covering around a product. It protects the product and also helps present it attractively.

2.9 Number of customers in the area you want to serve.

Geographic segmentation
Geographic segmentation focuses on the area to be served. It helps a business understand the location and spread of customers in that area.

2.10 A word or symbol that is displayed on a product.

Trademark
A trademark is a word, sign, or symbol that identifies a product and distinguishes it from other products.

QUESTION 3

3.1 Explain FIVE different business environment categories and give examples.

Customers
Customers are a day-to-day environmental factor of a business because they buy the products or services of the business. An example is the target market.

Suppliers
Suppliers provide the business with products or inputs it needs. An example is manufacturers.

Competitors
Competitors serve the needs of the same customers that the business is targeting. An example given is Checkers.

Economy
The economy affects every business, whether big or small, directly or indirectly. An example given is Covid-19.

Cultural force
Cultural richness can make business more complex, but it also creates challenges and opportunities when dealing with different groups of people.

Technological force
Technology helps a business manufacture a product, sell a product, or provide a service. An example is telecommunications.

Government politics
Political parties that hold power in the country can influence business indirectly through decisions and policies.

Natural environment
The natural environment refers to natural heritage such as water and air.

For revision purposes, all accepted points are included, even though the question asks for five only.

3.2 Give THREE personal resources of a successful entrepreneur.

Knowledge and skill
A successful entrepreneur needs knowledge and skill to manage the business properly and make sound decisions.

Contact
Good contacts can help the entrepreneur gain advice, suppliers, customers, and useful business opportunities.

Funds
Funds are needed to start the business, buy resources, and keep the business operating.

3.3 Name THREE basic or primary methods that entrepreneurs can use to gather market information.

Survey
A survey gathers information by asking people questions about their needs, opinions, or buying behaviour.

Observation
Observation means watching customers or the market carefully to understand behaviour and trends.

Experiments
Experiments involve trying out an idea or product to see how customers respond.

Test marketing
Test marketing means introducing a product on a small scale first to check how the market reacts.

For revision purposes, all accepted points are included.

3.4 Where can you find help, when drawing up a business plan?

Educational institutions
Educational institutions can provide knowledge, training, and guidance on how to prepare a business plan.

Service organisations
Service organisations can offer support and practical assistance to entrepreneurs.

Commercial institutions, e.g., banks
Commercial institutions such as banks can provide financial guidance and business support.

Government institutions
Government institutions often provide development support, information, and assistance for starting or planning a business.

3.5 Name THREE types of layout for a manufacturing or service business.

Product
In a product layout, the work is arranged in the sequence in which the product is made.

Process
In a process layout, similar activities or machines are grouped together.

Fixed position
In a fixed position layout, the product stays in one place while workers, materials, and equipment move to it.