2. © Pearson Education 2010 Edexcel GCSE Business Unit 1 Exam Preparation Example question Topic 1.4 Making the start-up effective

3. © Pearson Education 2010 Edexcel GCSE Business Unit 1 Exam Preparation Step 1: Read just the question Scenario Sam Martinez is a driving instructor. Two years ago, he decided to set up on his own and researched being a sole trader or buying into a franchise. He decided to become a sole trader. Sam operates in a highly competitive market. He provides his customers with a computer print-out record at the end of each lesson, which highlights where the learner needs to improve. He also charges a price lower than his rivals for each lesson. Question Which two of the following are most likely to give Sam a competitive advantage?

4. © Pearson Education 2010 Edexcel GCSE Business Unit 1 Exam Preparation Step 2: Try to answer the question Scenario Sam Martinez is a driving instructor. Two years ago, he decided to set up on his own and researched being a sole trader or buying into a franchise. He decided to become a sole trader. Sam operates in a highly competitive market. He provides his customers with a computer print-out record at the end of each lesson, which highlights where the learner needs to improve. He also charges a price lower than his rivals for each lesson. Think: The scenario is there for a purpose – read it carefully – there will be several questions relating to the scenario. What are the key points in the scenario? He’s a sole trader. He operates in a competitive market. His prices are lower than his rivals.

5. © Pearson Education 2010 Edexcel GCSE Business Unit 1 Exam Preparation Step 3: Look at the answer options Scenario Sam Martinez is a driving instructor. Two years ago, he decided to set up on his own and researched being a sole trader or buying into a franchise. He decided to become a sole trader. Sam operates in a highly competitive market. He provides his customers with a computer print-out record at the end of each lesson, which highlights where the learner needs to improve. He also charges a price lower than his rivals for each lesson. Question Which two of the following are most likely to give Sam a competitive advantage? a) Providing high quality tuition. b) Operating as a sole trader. c) Providing a personalised service. d) Operating in a competitive market. e) Providing a service for the community.

6. © Pearson Education 2010 Edexcel GCSE Business Unit 1 Exam Preparation Step 3: Look at the answer options a) Providing high quality tuition. Is providing high quality tuition a possible source of competitive advantage? b) Operating as a sole trader. Does operating as a sole trader give him an advantage over rivals? c) Providing a personalised service. Given his business, is a personalised service a source of competitive advantage? d) Operating in a competitive market. The word ‘competitive’ appears in this answer – is this a clue or a red herring? e) Providing a service for the community. Is Sam providing a service for the community?

7. © Pearson Education 2010 Edexcel GCSE Business Unit 1 Exam Preparation Step 4: Eliminate the distractors e) is a plausible answer but, given those key words – ‘most likely…’, there are two better options: a) and c) are both ways Sam could gain an advantage over his rivals. They could both be made distinctive and defensible – the key features of competitive advantage. Sam could make it difficult for his rivals to copy these aspects of the service he offers. So… the answers are: a) and c)

8. © Pearson Education 2010 Edexcel GCSE Business Unit 1 Exam Preparation Step 5: The correct answer Question Which two of the following are most likely to give Sam a competitive advantage? The answer options a) Providing high quality tuition. b) Operating as a sole trader. c) Providing a personalised service. d) Operating in a competitive market. e) Providing a service for the community.