Business & the International Economy (Edexcel IGCSE Business): Exam Questions

Saha is a small business in Türkiye (formerly known as Turkey) that opened in 2020 with 15 employees. It designs and manufactures robots which are used in hospitals, hotels and restaurants. In hospitals its robots are used to move medical supplies between departments. In hotels and restaurants, the robots are used to welcome customers as they arrive and deliver food and drinks to hotel rooms and restaurant tables.

Saha provides a seven-day-a-week customer service for all businesses buying its robots. Many new businesses are entering the global robot market and are competing for market share. Competitors in Türkiye include NIO, Zoox and Vention.

Saha has ambitious growth plans and has started to design robots that will be used in the home to help people with cleaning, shopping, security and entertainment. It aims to become a multinational business within five years to manufacture robots in all continents of the world

Figure 3 is an extract from Saha’s statement of financial position.

Figure 3

The first Premier Inn hotel was opened in 1987. Premier Inn now has over 820 hotels in the UK, United Arab Emirates (UAE) and India with over 83,000 rooms. It has recently expanded by opening the first Premier Inn in Germany and has plans to open more in other countries.

The majority of the hotels have restaurants with facilities for guests to buy meals and drinks.

Premier Inn plans to open more hotels in India.

As We Grow (AWG) is a clothing business in Iceland. The social objective of the business is to use natural materials, such as wool, and produce environmentally friendly products. It aims to design clothes that will last a long time, to encourage families to buy fewer clothes and reduce waste in society.

AWG’s increasing product range now includes jumpers, dresses, shirts and baby clothes. These are produced in small workshops that employ family and friends. Waste is kept to a minimum and any leftover material is used to make scarves and hats.

The business has one store in Iceland. It uses its website to advertise and sell its clothing online to customers in other countries. The business has received the Icelandic Design Award for its contribution to the environment.

AWG is an importer and an exporter. It imports materials to make its jumpers and exports its clothing to international customers.

Most people recognise Heinz for the phrase ‘57 varieties’ even though it now produces many more than the original 57 varieties. H J Heinz, the founder of the Heinz business, believed the phrase sounded lucky.

Kraft Heinz is a world-wide producer of food products. It was formed from the merger of Kraft Foods and Heinz in 2015. This created the third largest food and drinks business in the USA and the fifth largest food and drinks business in the world.

Kraft Heinz has over 24 different brands, including Greenseas in Australia and Nutri+Plus in New Zealand. America has the largest number of brands from Maxwell House to Cool Whip. Kraft Heinz produces many different products including tomato sauce, ‘Mac&Cheese’, pasta and its famous baked beans that are used and eaten by many people.

Kraft Heinz uses many methods to advertise its products. These include posters, billboards and leaflets in supermarkets.

Kraft Heinz has factories in over 29 countries. Countries include Japan, The Netherlands, New Zealand and America.

The LEGO Group is a privately-owned business in Denmark. The business was founded in 1932 by the Kristiansen family. The family still owns it. The name LEGO is an abbreviation of two Danish words, ‘leg godt’ which means ‘play well’. It is now one of the world’s largest manufacturers of toys with 15 factories and over 18,000 employees around the world.

LEGO manufactures toys, games and art materials for boys and girls of all ages, and products from films such as Star Wars and Harry Potter. It believes that children are the role models of the future and playing with LEGO can support children in a developing and complex world.

Huawei is a leading global provider of information and communications technology, infrastructure and smart devices. In March 2011, over one million of its C8500 smartphones were sold in China following its launch. It now manufactures a wide variety of different products including Huawei smartphones, watches and tablets.

In recent years Huawei has won many awards. In 2018 it was named the 68th most valuable brand by Best Global Brands. In 2019 it introduced a smartphone which had new photographic technology.

Huawei is one of many businesses that manufacture smartphones and tablets. It therefore needs to keep and retain its staff, so that production is continuous. This will help to maintain its customers.

Huawei has to maintain the quality of its products to be able to compete with other businesses, as well as generating profit. It must also ensure that the products it produces meet the needs of its customers as well as introducing new and different forms of technology. On its website it states ‘Huawei are committed to bringing digital to every person, home and organisation for a fully connected, intelligent world’.

In January 2019 Huawei launched the Huawei 10 Pro smartphone in the US at a cost of 5 353 Renminbi (CNY).

Vento is a bicycle manufacturer based in Milan, Italy. It employs 85 workers and exports 70% of its bicycles to countries outside the European Union (EU), including the USA, Japan and Australia. Vento imports lightweight aluminium from China to keep productin costs low. In the past year, the euro has appreciated significantly against the US dollar, Japanese yen and Australian dollar, but has depreciated against the Chinese yuan.

Vento's owner, Marco, is concerned about the impact of these exchange rate changes on the business. He is considering whether to start manufacturing in one of Vento's export markets to reduce the business's exposure to exchange rate fluctuations.

Solis is a solar panel manufacturer based in Porto, Portugal. It employs 120 workers and sells its products across Europe. Two years ago, Solis began exporting to countries in Africa, where demand for solar energy is growing rapidly. Solis currently manufactures all of its products in its single factory in Porto.

The African Union has recently formed a new trade bloc that removes tariffs on goods traded between its member countries. Solis is not based within this trade bloc. Several of Solis's competitors have already opened factories in Africa to take advantage of the trade bloc. Solis's owner, Carla, is considering whether to open a factory in a member country of the African trade bloc to remain competitive.

Wave is a surfboard manufacturer based in Peniche, Portugal. It was set up six years ago by Tomás and employs 20 workers. Wave sells its handcrafted surfboards to surf shops across Europe. The business has built a strong reputation for high-quality boards, and Tomás takes pride in personally overseeing every stage of production.

Tomás has noticed that demand for surfboards is growing rapidly in South America, particularly in Brazil. Brazil is a member of the Mercosur trade bloc, which removes tariffs on goods traded between its member countries. Wave currently pays a 15% tariff on all surfboards exported to Brazil.