Sign up to access the complete lesson and track your progress!
Unlock This CourseExtended response questions are worth the most marks on your iGCSE Business Paper 1 - usually between 8-12 marks. These questions test your ability to analyse, evaluate and make judgements about small business situations. They're not just about knowing facts; they're about showing you can think like a business person and apply your knowledge to real scenarios.
Small businesses are the backbone of most economies, making up over 99% of all businesses in the UK. Understanding how they operate, their challenges and opportunities is crucial for your exam success.
Key Definitions:
Small businesses are vital because they create jobs, drive innovation and serve local communities. They're often more flexible than large corporations and can respond quickly to market changes. However, they face unique challenges like limited resources, cash flow problems and difficulty competing with larger rivals.
The secret to success in extended response questions is understanding what the examiner wants. Different command words require different approaches and thinking skills.
Break down information to show relationships and patterns. Use phrases like "This shows that..." or "The impact of this is..."
Make judgements by weighing up advantages and disadvantages. Consider different viewpoints and reach a conclusion.
Present different sides of an argument. Show you understand various perspectives before reaching a balanced conclusion.
Your extended response questions will focus on key areas that affect small businesses. Understanding these topics deeply will help you write comprehensive answers that demonstrate real business insight.
Small businesses often start with survival as their main objective, then progress to profit maximisation, growth, or social objectives. Growth can be organic (internal expansion) or through integration (mergers/takeovers). Each approach has benefits and drawbacks that you should be able to analyse.
Cash flow is often called the "lifeblood" of small businesses. Many profitable small businesses fail because they run out of cash. Understanding sources of finance, working capital management and financial planning is crucial for exam success.
Sarah's Coffee Shop started as a single outlet in 2018. By 2023, she had three locations but was struggling with cash flow despite growing sales. Her problem? Customers paid by card (taking 3-5 days to clear) whilst she paid suppliers immediately. This working capital gap nearly forced closure until she negotiated 30-day payment terms with suppliers.
Small businesses face unique HR challenges. They can't offer the same benefits as large corporations but often provide better work-life balance and career development opportunities. Recruitment, training, motivation and retention are all key areas for extended response questions.
The 4 Ps (Product, Price, Place, Promotion) work differently for small businesses. They often compete on service quality rather than price, use local marketing channels and build personal relationships with customers. Digital marketing has levelled the playing field in many industries.
A well-structured answer is easier to write and easier for examiners to mark. Follow this proven framework to maximise your marks:
Point: Make your main argument
Evidence: Support with facts, figures, or examples
Explain: Show how the evidence supports your point
Link: Connect back to the question
For a 10-mark question, spend about 12-15 minutes writing. This includes 2-3 minutes planning and 1-2 minutes checking your answer. Don't spend too long on one question - you need time for all parts of the paper.
Examples bring your answers to life and show real understanding. You can use famous businesses, local companies you know, or create realistic scenarios. The key is making sure your examples directly support your arguments.
Certain topics appear regularly in extended response questions. Being prepared for these will boost your confidence and performance.
Franchising vs organic growth, advantages and risks of expansion, financing growth
Balancing different stakeholder needs, ethical decisions, social responsibility
Economic changes, technology impact, government regulations, competition
Learning from common mistakes can significantly improve your marks. Here are the most frequent errors students make in extended response questions:
Examiners report that the best answers show genuine understanding of business concepts applied to realistic situations. They're looking for analysis and evaluation, not just description. Use business terminology correctly and always link back to the specific context given in the question.
Success in extended response questions comes from regular practice and building your business knowledge. Here's how to prepare effectively:
Create a glossary of key business terms and practice using them in context. Understanding terminology helps you write more precisely and shows the examiner your business knowledge.
Follow business news, especially stories about small businesses. This gives you real examples to use and helps you understand current business challenges and opportunities.
Work through past paper questions under timed conditions. Start by focusing on structure and gradually build up speed. Always check mark schemes to understand what examiners are looking for.
Stay calm, read questions carefully, plan your time, use business terminology, support arguments with examples and always conclude with a clear judgement. Remember - you're demonstrating business thinking, not just knowledge recall.