External Influences on Business (A Level) (Cambridge (CIE) A Level Business): Exam Questions

Fold (FD)

Fold (FD) manufactures cardboard packaging in country M. It employs 190 people and supplies food producers and online retailers.

Three of FD's largest customers have told it that from 2028 they will buy only from suppliers whose packaging is made entirely from recycled material and who can show that their energy use is falling. Together these three customers provide 44% of FD's revenue.

FD currently uses 61% recycled material. Moving to 100% would cost around $2.8m in new equipment.

Country M's government has also announced a tax on packaging containing less than 70% recycled content, starting in 2027.

Meadow (MW)

Meadow (MW) processes milk into cheese and yoghurt in country K. It employs 340 people at one large plant, where staff work with heavy machinery, hot liquids and refrigerated storage rooms.

New health and safety laws in country K require all food processing businesses to fit machine guards, provide protective clothing, and give every employee eight hours of safety training each year.

MW estimates that meeting the new requirements will cost $620,000 in the first year and $180,000 a year afterwards.

In the year before the new law, MW recorded 34 workplace injuries, nine of which required time off work.

Folio (FL)

Folio (FL) is a printing business in country W. It prints books, catalogues and packaging for around 200 customers, and employs 75 people.

Paper is FL's largest cost. FL buys all of its paper from just two mills, because only these two can supply the weights and finishes its customers require.

Last year one of the two mills raised its prices by 22% and reduced credit terms from 60 days to 30 days. FL had to pay more, and sooner, than it had planned.

FL's owner is now considering whether to hold larger stocks of paper or to look for a supplier in another country.