Pearson Edexcel Level 1/Level 2 GCSE 9–1 - Business PAPER 2: Building a business - Source Booklet

Sep 5, 2026

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Source booklet for Pearson Edexcel Level 1/Level 2 GCSE (9–1) Business Paper 2: Building a business. Presents two reading extracts for Section B/C: Extract A on Tesla’s strategy to reduce car costs, productivity issues, losses in 2018, planned investment in a Shanghai factory using flow production, financing needs, showroom closures, and a shift toward e-commerce. Extract B analyses ASOS’s growth through the “ASOS Experience”, logistics automation, faster delivery, expanded online range, falling profits amid tougher UK competition, and the move to viral advertising via the #AsSeenOnMe campaign.

LanguageEnglish

CategoryExam

FormatPDF

Pages4

Reading Time10 min

AccessFree to download

SECTION B

Extract A

SECTION C

Extract B

Pearson Edexcel Level 1/Level 2 GCSE (9–1) | Sample assessment materials for first teaching Xxxx 20XX | | | --- | --- | | Morning/Afternoon (Time: 1 hour 45 minutes) | Paper reference

1BS0/02 | | Business
PAPER 2: Building a business | | | Source Booklet
Do not return this Booklet with the question paper. | | Turn over S76884A ©2022 Pearson Education Ltd. 1/ *S76884A* SECTION B Read the following extract before answering Questions 4, 5 and 6. Extract A Tesla is a public limited company based in California, USA. Its founder and main shareholder, Elon Musk, wanted to produce an electric car that is affordable to a large number of potential customers. This car is called the Tesla Model 3 (Figure 3) . Introduced in 2017, the basic version of the Model 3 was originally priced at $50 000 and the company wanted to reduce this price to $35 000 by 2019. However, this was difficult to achieve because Tesla’s California factory suffered from low levels of productivity. These problems resulted in Tesla making a $976 million loss in 2018. (Source: Grzegorz Czapski/Shutterstock) Figure 3: Tesla Model 3 electric car Following the introduction of tariffs on US imports by the Chinese government in 2018, Tesla decided to invest $5 billion in the construction of a new car factory in Shanghai, China. This factory will use flow production. However, with only $2.4 billion of available capital, Tesla needs to raise external finance to fund it. In 2019, Tesla decided to close most of its showrooms to reduce costs. The company believes customers will be happy to purchase electric cars using e-commerce. (Source: adapted from [https://www.telegraph.co.uk/technology/2019/02/28/](https://www.telegraph.co.uk/technology/2019/02/28/) tesla-launches-long-awaited-35000-car-closes-dealerships-move/ and [https://www.bloomberg.com/news/articles/2018-08-01/tesla](https://www.bloomberg.com/news/articles/2018-08-01/tesla)is-said-to-plan-5-billion-investment-in-chinese-factory) 2 S76884A SECTION C Read the following extract before answering Question 7. Extract B ASOS plc is an online fashion retailer which targets customers in their 20s. The company started in 2000 and since then it has grown significantly. One of the main reasons for its growth is what Chief Executive Nick Beighton calls, the ‘ASOS Experience’. The company focuses on high quality logistics to distribute its products and increased use of warehouse technology. This has resulted in a warehouse and distribution system which is almost fully automated (Figure 4). This allows ASOS to deliver customer orders the next day, so long as the order is placed online before midnight. Automation has also given ASOS the ability to increase the range of clothes it can sell on its website. asos ✓ Follow 7,091 posts 7.1m followers 740 following ASOS Tag your looks \#AsSeenOnMe to get featured See more from us here >>> : @ASOS_Looped : @ASOS_FaceandBody : ASOSfashion : [asos.com](asos.com) Figure 5: ASOS’s Instagram bio However, the market for clothes in the UK is becoming increasingly competitive. Despite a significant growth in sales, ASOS’s profits have fallen. This has caused the company’s share price to fall. ASOS has responded by focusing on viral advertising. Its latest campaign is to get customers to use the hashtag \#AsSeenOnMe (Figure 5) when they are showing off their latest ASOS outfit on social media. In return, ASOS gives customers the opportunity to be featured on the ASOS Instagram feed which has 7.1 million followers. (Source: adapted from [https://jilt.com/upsell/asos-shipping-logistics/ and](https://jilt.com/upsell/asos-shipping-logistics/ and) [https://sproutsocial.com/insights/social-media-marketing-examples/](https://sproutsocial.com/insights/social-media-marketing-examples/)) S76884A 3 BLANK PAGE 4 S76884A

FAQs

What does Extract A focus on in the source booklet?

Extract A focuses on Tesla’s strategy for producing the Model 3, cost reduction goals, production productivity challenges, major losses in 2018, investment in a Shanghai factory, and operational changes such as closing showrooms and using e-commerce.

How does Tesla plan to fund the new Shanghai factory?

With only $2.4 billion of available capital, Tesla needs to raise external finance to fund the $5 billion construction of the Shanghai plant.

What key factors explain ASOS’s growth and subsequent profit decline?

ASOS’s growth is linked to the “ASOS Experience”, including high quality logistics and near-fully automated warehouse systems enabling next-day delivery. Despite rising sales, profits fall due to increasing UK market competition, leading to a shift toward viral advertising.

Sep 5, 2026

Upload by Adam