OCR A Level Business: Strategy and implementation and Business plan (H431) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover the “Strategy and implementation” and “Business plan” content of OCR A Level Business (H431), Version 2.1 (January 2026). Read the study guide and revision notes first. Course hub: OCR A Level Business. Checklist: OCR A Level Business checklist. The wider unit has an earlier strategy practice set, and the free diagnostics show where to start.

Questions

1. Pendlecote Dairy has annual sales revenue of £1,800,000. Its managers make three statements.

Statement 1: “Raise sales revenue by 20% within four years.” Statement 2: “Supply two new regions through the supermarket chains.” Statement 3: “Hand out free sample packs to shoppers during the first month in each region.”

(a) Identify which statement is an objective, which is a strategy and which is a tactic. [3] (b) Calculate the sales revenue Pendlecote Dairy needs to reach its objective. [2]

2. Define the term “business plan”. [2]

3. State two contents of a business plan and explain why each is included. [4]

4. Prindlemere Tutors is about to launch an online tuition service as part of a new strategy. Explain two reasons why Prindlemere Tutors needs to plan the implementation of this strategy. [4]

5. Explain what is meant by the “Plan-Do-Review” cycle. [3]

6. Vantergill Print planned to complete 2,400 printing jobs in a quarter at an average sales revenue of £45 a job. It completed 2,070 jobs at an average of £45.

(a) Calculate the sales revenue variance and state whether it is favourable or adverse. [3] (b) Explain one action Vantergill Print could take at the “Review” stage. [2]

7. Aldersyde Garden Centre plans a café. Forecast spend per customer is £6.50 and variable cost per customer is £2.60. Fixed costs are £2,730 a month. The plan forecasts 900 customers a month.

(a) Calculate the number of customers needed each month to break even. [3] (b) Calculate the margin of safety in customers and the forecast monthly profit. [3]

8. Prindlemere Tutors planned 120 online lessons a week but delivered an average of 84 in month one. A review found that most cancelled lessons were in evening slots, when tutors were also teaching in person. Analyse how the Plan-Do-Review cycle can improve the performance of Prindlemere Tutors. [6]

9. Aldersyde Garden Centre asks its bank for a £90,000 loan, repayable over five years, to build the café in question 7. The plan forecasts a profit of £780 a month. Evaluate the impact and importance of the business plan to the stakeholders of Aldersyde Garden Centre. [8]

10. Dev Sawbridge plans to start Sawbridge Restoration, restoring antique furniture from his garage with his own savings and no loan. A friend says writing a business plan is a waste of time. Evaluate the advantages and disadvantages to Dev of having a business plan. [8]

11. Pendlecote Dairy considers a dairy-free range costing £240,000. The owners expect extra cash inflows of £80,000 in year 1 and £100,000 in each of years 2, 3 and 4. The owners want payback within three years.

(a) Calculate the payback period for the investment. [3] (b) Evaluate the proposed strategy and recommend whether Pendlecote Dairy should go ahead. [9]

12. After the weak quarter in question 6, Vantergill Print carries out a strategic review. Its strategy is low-priced, high-volume work for local businesses, but online printers now charge less. Two options emerge. Option A is to cut prices by 10% to keep volume. Option B is to spend £30,000 on equipment for large-format and wedding stationery, which is forecast to add £12,000 a year in extra profit. Recommend and justify how Vantergill Print should alter its strategy. [8]

Answers

1. (a) Statement 1 is the objective, a target to reach [1]. Statement 2 is the strategy, the long-term route [1]. Statement 3 is a tactic, a short-term action within the strategy [1]. [3] (b) 1,800,000 x 1.20 [1] = £2,160,000 [1] [2] Examiner insight: Labels tend to gain more when each is tied to a reason such as time horizon or measurability.

2. A written document [1] setting out what a business intends to do, how, and the results it expects [1]. [2] Examiner insight: Saying only “a plan for a business” gives little to credit; say what the document contains.

3. Any two from the following, each with a reason. Financial forecasts [1] show whether the business can survive and repay finance [1]. Market research [1] gives evidence that customers exist and will pay [1]. Other pairs are acceptable, such as a marketing plan or a risks section. [4] Examiner insight: “State and explain” asks for both parts. Four contents with no reasons gain less than two contents each given a reason.

4. Resources must be ready at the right time [1]: Prindlemere needs cash for the platform and time to train tutors, or the launch may stall [1]. Staff need to know their roles and why the change is happening [1]: if tutors are not told who schedules online sessions, lessons may be missed or tutors may resist [1]. [4] Examiner insight: A reason is developed best when it uses the stem, such as the platform or tutors.

5. A repeating process [1] in which a business sets a plan with targets, carries it out [1], then compares actual results with the plan and uses the lessons in the next plan [1]. [3] Examiner insight: The word “cycle” matters: showing the Review feeding the next Plan shows that the process repeats.

6. (a) Planned sales revenue = 2,400 x 45 = £108,000 [1]. Actual sales revenue = 2,070 x 45 = £93,150 [1]. Variance = 108,000 - 93,150 = £14,850 adverse [1] (actual is below plan). [3] (b) Investigate why 330 jobs (13.75%) were missed, by checking competitor prices and customer feedback [1], then change the next plan, such as the forecast or marketing approach [1]. [2] Examiner insight: A variance answer needs the direction as well as the number. A review action gains more when it links a cause to a change in the next plan.

7. (a) Contribution per customer = 6.50 - 2.60 = £3.90 [1]. Break-even = 2,730 / 3.90 [1] = 700 customers a month [1]. [3] (b) Margin of safety = 900 - 700 = 200 customers [1]. Forecast profit = 900 x 3.90 [1] - 2,730 = £780 a month [1]. [3] Examiner insight: Show the contribution per customer before dividing, so the method is visible.

8. The Plan stage gave a clear target of 120 lessons a week [1], which made the shortfall measurable: 84 is 70% of plan, 36 lessons short [1]. The Do stage produced data on which slots failed [1], and the Review identified the cause, evening clashes with in-person teaching [1]. The next plan can move in-person teaching or recruit evening tutors so that capacity matches demand [1]. Over repeated cycles forecasts improve, though this needs accurate data and action on the review [1]. [6] Examiner insight: Each stage should lead to a consequence in the next; three stage names alone do not analyse.

9. Bank: the plan lets the bank judge risk [1]. Repaying capital alone over five years needs £18,000 a year, but forecast profit is 780 x 12 = £9,360 [1], so the gap could lead to a smaller loan, a longer term or a refusal [1]. Owners: the plan shows, before building, whether the café is viable [1], so weak figures are a useful warning rather than a failure [1]. Employees: a sound plan suggests lasting jobs [1]. Suppliers: may offer credit if it looks sound [1]. Judgement: the plan matters most to the bank, since it decides funding, but helps the owners most if it prompts them to improve the proposal first [1]. [8] Examiner insight: Using a case figure and weighing stakeholders against each other tends to beat describing each in turn.

10. Advantage: writing the plan forces Dev to test the idea, such as demand for restoration work and the cost of tools and materials [1]. It sets targets and a benchmark for his first year [1], and shows weaknesses before he spends savings that are at risk [1]. Disadvantage: it takes time he could spend finding customers [1]. Forecasts for a new business are uncertain, so the plan may be wrong or soon out of date [1]. With no lender to persuade, the plan has no outside audience [1]. Weighing: because Dev risks his own savings, a short plan covering demand, costs and cash flow is worth its cost [1]; a long plan is less justified [1]. [8] Examiner insight: The stem detail (own savings, no loan) separates a reasoned judgement from a generic list.

11. (a) Cumulative inflows: year 1 £80,000, year 2 £180,000, year 3 £280,000 [1]. The £240,000 is recovered during year 3, with 240,000 - 180,000 = £60,000 still needed at the start of year 3 [1]. Payback = 2 + 60,000 / 100,000 = 2.6 years (about 2 years 7 months) [1]. [3] (b) Payback of 2.6 years meets the owners’ three-year limit [1], and total inflows of £380,000 exceed the cost by £140,000 [1]. A new range could attract customers the business does not reach now [1]. However, payback ignores cash after the payback point and the time value of money [1], and the inflows are forecasts for a new product [1]. If every inflow were 15% lower (£68,000 in year 1, then £85,000 a year), cumulative inflow after three years would be £238,000, so payback would slip just beyond three years [1]. A failed launch could weaken cash flow for the whole business [1]. Recommendation: go ahead in stages, committing part of the spend and checking early sales against the forecast before releasing the rest [1], because this limits the downside while the 2.6-year payback leaves some room against the owners’ limit [1]. [9] Examiner insight: A recommendation is stronger when conditional on evidence and when it names a limitation of the calculation.

12. Recommend Option B [1]. Option A cuts price on every job, so on 2,070 jobs it lowers revenue by 10% of £93,150, which is £9,315, and online printers could undercut again [1]. It keeps the business competing on price, where it is weakest [1]. Option B targets work where service and quality matter more than price [1]. Payback is 30,000 / 12,000 = 2.5 years [1]. Risks: £30,000 of spending and unproven demand [1]; reduce them by testing demand with a small run of orders first [1]. Owners accept short-term cost for long-term survival, and employees gain skills but may fear change [1]. Judgement: B is better if cash can cover it. [8] Examiner insight: A “recommend and justify” answer is stronger when it rejects an alternative with a reason and names a risk of its own choice.

Where marks are usually lost

• Labelling a short-term action as a strategy, or an objective as a tactic.
• Giving a variance figure without saying whether it is favourable or adverse.
• Listing plan contents with no reasons.
• Treating Plan-Do-Review as three words, not a loop.
• Ending with a repeat of earlier points instead of a judgement.

Frequently asked questions

How do you tell an objective, a strategy and a tactic apart in an exam question? An objective is a target the business wants to reach, a strategy is the long-term route to reach it, and a tactic is a short-term action that carries the strategy out. Labelling a short-term action as a strategy is one of the most common ways to lose marks in OCR A Level Business (H431).

What should you always say when you calculate a variance? State whether the variance is favourable or adverse as well as giving the figure. A variance number on its own, without its direction, usually does not earn full marks.

How do you answer a question on why a business plan matters to a bank? Explain how the plan’s contents, such as financial forecasts, let the bank judge the risk of lending and whether the business can repay. Link your points to the figures in the case rather than listing plan contents without reasons.

How should a strategy evaluation end? End with a clear judgement that answers the question, supported by the most important reason from the case. Repeating earlier points instead of reaching a decision is a common way to miss the top marks.

Next steps

• Review the revision notes and study guide.
• Return to the course hub and the checklist.
• Try the free diagnostics.
• Book a free trial class.

Official syllabus

OCR A Level Business (H431), Version 2.1 (January 2026), published by OCR: the “Strategy and implementation” and “Business plan” content in the area of study “Business objectives and strategy”.