Influences on Business Decisions (Edexcel A Level Business): Exam Questions

Read the following extracts (E to H) (opens in a new tab) before answering

Assess the likely value of Corporate Social Responsibility to a business, such as Cadbury.

Read the following extracts (A to D) (opens in a new tab) before answering

Assess two ways in which the decision to be a socially responsible business is likely to have increased Warby Parker’s profits.

Read the following extracts (D to G) (opens in a new tab) before answering

Assess the likely consequences for Sports Direct of its corporate culture.

Read Extracts D to H (opens in a new tab) before answering

Assess the likely importance of corporate social responsibility (CSR) as an influence on German Automotive’s (GA) business decisions.

Extract E

Tesla

Tesla is an American multinational company that designs and manufactures electric vehicles. In 2021, the company had the most worldwide sales of battery electric vehicles, with a market share of 21%. In 2023, it was the world's most valuable vehicle manufacturer by share value. Tesla's sales revenue increased from 53.82bn US dollars in 2021 to 81.46bn US dollars in 2022.

Tesla's current product range includes four different cars. These are the Model S, the Model 3, the Model X and the Model Y. The company started production of the Cybertruck in 2023.

(Source: adapted from https://en.wikipedia.org/wiki/Tesla,_Inc. and https://www.macrotrends.net/stocks/charts/TSLA/tesla/income-statement)

Extract F

Tesla's advanced manufacturing system

Tesla's factories achieve high levels of capacity utilisation. In 2022, Tesla produced 1.37m vehicles, a 47% increase on the amount produced in 2021.

The company uses a combination of traditional manufacturing techniques, advanced robotics and just-in-time management of stock.

(Source: adapted from https://inventory-management.com/erp/manufacturing-erp/teslas-manufacturing-process/ and https://www.statista.com/statistics/715421/tesla-quarterly-vehicle-production/)

Extract G

Tesla's corporate culture

Tesla places great emphasis on task culture. This type of corporate culture encourages employees to develop solutions to current and emerging problems.

Speed affects Tesla's competitive advantage. Employees are expected to rapidly respond to trends and changes in the market. For example, Tesla's design teams need to be able to develop products that match or exceed those from rival car manufacturers. Production workers are encouraged to suggest ideas for improving productivity and quality.

Continuous innovation is at the heart of Tesla. For example, Tesla continuously researches and develops ideas that help develop cutting-edge electric cars and related products.

(Source: adapted from https://panmore.com/tesla-motors-inc-organizational-culture-characteristics-analysis)

Extract H

The electric truck market

The global electric truck market was valued at 392m US dollars in 2020, and is projected to reach 3 862m US dollars by 2030. Market size by volume is forecast to increase from 101,499 trucks in 2022 to 1,067,985 by 2030. The market is dominated by multinational manufacturers, such as Volvo, Mercedes and Ford.

Factors such as government initiatives for increased use of electric vehicles, stronger regulation of the emissions from fossil fuel-powered commercial vehicles, and reducing cost of electric vehicle batteries are driving growth of the electric truck market. However, lack of charging infrastructure and the high price of electric trucks are expected to hinder growth of the market during the forecast period.

(Source: adapted from https://www.alliedmarketresearch.com/electric-truck-market-A06183)

Assess the importance of Tesla having a task culture for its continued success.

Extract D

The End of the Road festival

The End of the Road festival is an annual music festival in England which focuses on independent rock and folk music.

Every time its founder, Simon Taffe went to a music festival, he thought: ‘I could do this.’ He went home and spent two weeks doing research, calling security firms and portable toilet companies.

The venues Simon contacted all said they wouldn't let him hold a festival. The only place agreed was the village of Larmer Tree on the border of Wiltshire and Dorset.

The first End of the Road festival was in September 2006 and cost £150,000. He sold his house to cover some of the cost and the rest came from loans. In April of 2006, ticket sales were slow; no matter how much was put into advertising, sales did not grow. Simon realised then that he was going to lose a lot of money. He hired a van and drove around the country, dropping leaflets at any festival he could find.

The first festival made a loss of £35,000. Simon was 25 and still had his decorating business. The second year, the festival made a loss of £50,000. By the fourth year, the festival had just about become profitable.

In 2024, 15,000 people attended the End of the Road festival set in fields, woodland and Victorian gardens, and had six stages.

(Source: adapted from https://www.theguardian.com/lifeandstyle and https://en.wikipedia.org/wiki/End_of_the_Road_Festival)

Extract E

End of the Road festival - environmental and charity initiatives

FreeFill is a reusable Cup Scheme which charges festivalgoers £1 per cup to reduce single-use plastic consumption. The reusable aspect of this scheme has also helped End of The Road in reducing recyclable waste. The End of The Road donates some of its income to fund various clean water projects across the globe.

The End of the Road festival promotes War Child, a charity which aims to secure a safe future for every child affected by war, and supports it financially. War Child works with local communities and governments to help protect and educate children and support them to heal and learn.

(Source: adapted from https://endoftheroadfestival.com/environmental-initiatives/)

Extract F

UK music festivals

The Leeds and Reading festivals attract almost 200 000 fans between them. Smaller UK festivals sell between 5 000 and 20 000 tickets, and have experienced many problems including competition, and rising costs.

192 out of 600 operating in 2019 have closed. The Secret Garden Party in Cambridgeshire closed and symbolically burned down its main stage at the end of July 2024. Founder Freddie Fellowes said: “It’s no longer sustainable for independents to run festivals. The difficulty is that if you put your ticket price out early, you commit to a price and a budget. That is a huge risk. Profit margins are incredibly tight.”

However, The Green Man festival, in south Wales, sold out in just two hours in 2025, and the Lake District’s Kendal Calling has seen record ticket sales for August 2025. A general boom in summer events indicates that consumers are willing to spend money on memorable experiences.

Sponsorship is also important to festivals. Ticket prices would need to increase without it. Oxfordshire’s Wilderness festival is sponsored by carmaker Audi.

(Source: adapted from https://www.theguardian.com/business/)

Extract G

Selected festival prices and capacities

(Source: adapted from various festival websites)

Assess the likely importance of Corporate Social Responsibility to the organisers of the End of the Road festival.

Extract A

Vinted Ltd: A growing clothing business

Vinted Ltd was founded in Lithuania in 2008 by Milda Mitkute and Justas Janauskas, who remain major shareholders. It operates across Europe and the USA, and recently raised €250m in share capital to help fund expansion into new markets.

Vinted currently has 45 million users who buy and sell clothes on its platform. Sellers pay no fees until the items are sold and then Vinted receives a percentage of the selling price.

Vinted utilises several trends, such as affordable fashion, and the use of online channels. Vinted is part of the circular economy which describes how goods, such as clothing, are recycled and re-sold, helping to prolong usage in a sustainable way.

In the future Vinted plans to make it easier for people to sell goods on the platform for charity. In the UK, charity shops are a significant channel for used goods, where people donate clothes to help organisations such as the British Heart Foundation, which sell them in physical stores to raise funds. Vinted is working to give sellers the option to sell for a charity of their choice.

(Source: adapted from techcrunch.com)

Extract B

Global fashion market trends in 2023

1. The rise of resale clothing

The secondhand clothing market will grow three times faster than the global clothing market overall. Technology and online marketplaces are driving this trend, with 70% of customers saying it's easier now to shop secondhand than it was five years ago. With customer incomes squeezed, resale helps with affordability.

2. Sustainability

Fast-fashion brands are sometimes criticised for the methods they use to manufacture and produce clothing, involving long global supply chains. 42% of global customers prefer to purchase eco-friendly and sustainable products.

3. Brick-and-mortar

22% of online returns are because products look different in reality when received by the customer. This expense is driving many fashion brands back into traditional retail.

(Source: adapted from shopify.com)

Extract C

Clothes manufacturing in China

Previously clothing brands were attracted to China by a large labour force, low labour costs, clothing manufacturing technology, and high product quality. Factories concentrated in coastal port cities, also help with transportation. Fast-fashion brand Shein has its base in China.

Mango’s chief executive, Toni Ruiz, said he was considering buying less from China. “What we’re looking at is the extent to which all this global sourcing, developed over many years, might become more local,” he said.

According to China’s National Bureau of Statistics, the average factory wage doubled between 2013 and 2021. Products manufactured in China are not as competitive once shipping and transport costs are taken into account. An increasingly important consideration for retailers is traceability in the supply chain after years of widely reported labour abuses in China.

Many clothing brands are moving production to Turkey, which has a customs agreement with the European Union. Turkey also has a free trade agreement with the UK. Turkey has easy access to raw materials, such as cotton, as well as having a skilled workforce protected by strong labour laws. Hugo Boss and Zara already use Turkey as a production location.

(Source: adapted from https://www.ft.com/)

Assess the importance of business ethics to the success of Vinted.

Read the following extracts (E to H) (opens in a new tab) before answering

Unilever’s chief executive believes that Unilever should aim to consider all of its stakeholders in its main business decisions. Some business analysts believe that Unilever should instead consider an aim of focusing purely on its shareholders.

Evaluate these two aims and recommend which is most suitable for a business such as Unilever.

Read the following extracts (A to D) (opens in a new tab) before answering

Ian Reid believes that the Commonwealth Games’ directors’ objectives should be to prioritise jobs and investment when making business decisions. However, others have suggested that the objectives should meet the needs of all stakeholders.

Using the data in Extracts A to D, evaluate these two objectives and recommend which is more appropriate for the 2022 Commonwealth Games’ Directors.

Read Extracts A to C before answering

As Stylideas Ltd grows, Tom Pellereau is considering whether to change its current role culture to a power culture to maintain the business' success.

Evaluate these two options and recommend which one Tom Pellereau should choose to maintain the business' success.

Extract A

UK chocolate and sugar confectionery market data (2020-2024)

The UK market has grown in value from £5.24bn (2020) to £6.78bn (2024), but volume sales fell from 620 million kg to 590 million kg. Value growth reflects price rises, not increased demand. Average price per kg rose 36% since 2020, driven by commodity inflation and supply chain disruptions in 2022-23.

Volume decline was most pronounced in sugar confectionery due to health concerns. Premium and dark chocolate outperformed milk chocolate.

(Source: adapted from Kantar Worldpanel UK Confectionery Report 2024)

Extract B

Mondelez to close Cadbury factory in Ireland with loss of 400 jobs

Mondelez International will close its Cadbury facility in Rathmore, Ireland, with 400 job losses. The 50-year-old factory produces Cadbury Dairy Milk bars and seasonal products for UK and Irish markets.

The company cited changing consumer preferences, overcapacity in its European network, and efficiency needs. Production will consolidate into larger Birmingham and Poland facilities where Mondelez has invested in automation.

“This was an incredibly difficult decision,” said a Mondelez spokesperson. “We must adapt our manufacturing footprint to remain competitive.” Unions and politicians criticised the closure.

Industry experts note this reflects broader rationalisation. Similar Nestlé and Mars closures across Europe show companies seeking economies of scale while responding to declining volumes in mature markets.

(Source: adapted from BBC News, The Irish Times and Food Manufacture, January 2025)

Extract C

The rise of functional and better-for-you confectionery

Consumer preferences are shifting towards products with functional benefits or health credentials. Research shows 42% of UK consumers seek reduced-sugar confectionery, while 38% want products fortified with vitamins or protein.

Major brands have launched lower-sugar variants using alternative sweeteners or reduced portions. Start-ups offer protein-enriched chocolate, sugar-free sweets, and vegan chocolate made with oat or coconut alternatives.

These products command 30-50% price premiums. However, taste remains the primary purchase driver, and reformulated products must deliver on flavour.

Mintel predicts functional and better-for-you products will reach 15-18% of the UK market by 2028, up from 8% in 2024. Success requires balancing health credentials with taste while managing costs.

(Source: adapted from Mintel UK Confectionery Market Report 2024)

Extract D

UK sugar tax extended to confectionery sector

The UK government announced plans to extend sugar taxation beyond soft drinks to include confectionery, targeting childhood obesity. The proposed levy, effective April 2027, will apply to chocolate, sugar confectionery, and sweet biscuits containing over 5g sugar per 100g.

Products will be categorised into two bands:

• Band 1: 5-10g sugar per 100g - 18p levy per 100g

• Band 2: Over 10g sugar per 100g - 24p levy per 100g

The government estimates the tax could raise £500m annually for children's health programmes. Public health organisations welcomed the move, citing links between sugar consumption and obesity, diabetes, and dental problems.

The confectionery industry strongly criticised the proposals. The Food and Drink Federation warns the levy will disproportionately impact smaller manufacturers lacking reformulation resources. Major manufacturers will likely pass costs to consumers through higher prices, potentially reducing demand and causing job losses.

Retailers are concerned about administrative burdens and sales impact. Trade unions fear job losses if the tax leads to factory closures or overseas production shifts.

(Source: adapted from UK Government press release, The Guardian and Food Manufacture, December 2024)

With reference to Extract B and other information from the confectionery industry, evaluate the extent to which Mondelez has met its corporate social responsibilities in deciding to close its Rathmore factory.