Syllabus: Cambridge - IGCSE Business Studies
Module: 1.1 Business Activity
Lesson: 1.1.1 The Purpose and Nature of Business Activity

Introduction

This article supports Cambridge IGCSE Business Studies (0450), specifically Unit 1.1.1: The Purpose and Nature of Business Activity. The unit introduces foundational concepts in business, giving students an understanding of why businesses exist and how they address the basic economic problem. For teachers and school leaders, this topic is ideal for cross-curricular delivery, meeting both subject and Gatsby Benchmark objectives, especially Benchmark 4: linking curriculum learning to careers.

Key Concepts

Cambridge IGCSE specifies the following learning objectives under 1.1.1:

• The purpose of business activity: Understanding how businesses combine the factors of production to create goods and services that satisfy people’s wants and needs.

• The concept of adding value: Recognising how businesses increase the worth of their products by transforming inputs.

• The nature of economic activity: Identifying the central problem of scarcity and the need for choice.

• The role of specialisation: Appreciating how focusing on particular tasks increases productivity and efficiency.

• The importance of business in the economy: Understanding that businesses are essential to job creation, wealth generation and economic growth.

These concepts also underpin later IGCSE content on objectives, ownership, and stakeholder dynamics.

Real-World Relevance

From the UK’s growing gig economy to global brands like Unilever or Tesla, the core reasons businesses operate are visible in every industry. Consider:

• Deliveroo began as a response to a market gap in food delivery logistics. It creates value by providing speed, convenience, and access to local restaurants.

• Social enterprises such as The Big Issue or Divine Chocolate show how business activity can be socially driven, not just profit-motivated.

• During the COVID-19 pandemic, businesses rapidly adapted their models — pivoting to remote service delivery or repurposing factories — illustrating how scarcity and consumer needs force innovation.

These examples help students visualise how textbook theory plays out in real decisions, across all sectors.

How It’s Assessed

Cambridge IGCSE Business Studies uses a mix of structured questions and extended responses. For this topic:

• Paper 1 often includes:

  • Short definitions: e.g. “What is meant by ‘adding value’?”

  • Application questions: using real or hypothetical business examples

  • 6-mark and 8-mark explain or discuss questions focused on the impact or importance of business activities

Command words to highlight:

• Identify – name or list

• Explain – give reasons or make connections

• Discuss – balanced argument with justification

Assessment success requires clarity, applied examples, and structured argument — not just recall.

Enterprise Skills Integration

This unit lends itself strongly to commercial awareness and problem-solving — two pillars of the Enterprise Skills framework:

• Commercial Awareness: Students explore how organisations meet consumer needs, why profit matters, and how businesses sustain themselves — all key for career readiness.

• Decision-Making: By understanding opportunity cost and resource allocation, students are introduced to the trade-offs that underpin business strategy.

• Problem-Solving: Using active learning, students could simulate starting a business with limited resources — ideal for applying economic principles practically.

Enterprise Skills simulations aligned to this unit often involve students designing mini businesses, choosing between competing markets, and making budget decisions — all with real-time feedback.

Careers Links

This topic directly supports Gatsby Benchmarks 4 and 5:

• Benchmark 4 (Linking curriculum to careers):

  • Lesson activities can reference business roles such as product managers, operations analysts, or logistics coordinators.

  • Tools like Skills Hub Futures include workplace-focused tasks tied to this topic, such as “Understanding Business Models” or “Customer Focus” sessions.

• Benchmark 5 (Encounters with employers):

  • Case studies and video interviews with real professionals can illustrate how roles in marketing, operations or supply chain management align with business activity themes.

Relevant roles:

• Business development assistant

• Entrepreneur or start-up founder

• Logistics or supply chain officer

• Retail operations coordinator

• Public sector procurement assistant

This foundational knowledge underpins every commercial job role — students don’t need to pursue “business” to benefit.

Teaching Notes

Top Teaching Tips:

• Use real-life start-up stories or students’ local high street examples to ground theory.

• Encourage debate: “Should businesses exist only to make profit?” — an accessible yet stretching moral angle.

• Apply the “funnel” method from active learning studies — start broad with economic needs, then narrow to business solutions.

Common Pitfalls:

• Students often confuse “needs” and “wants” — use tangible, age-appropriate examples.

• The term “adding value” may be interpreted as simply “making more money” — reinforce the transformation process.

• Overuse of generic definitions without application — encourage case-based responses even in lower-mark questions.

Extension Ideas:

• Run a simplified business startup simulation where students choose a business idea, select resources, and try to ‘add value’ with a basic marketing plan.

• Link with Geography or Economics: How do businesses impact the local economy?

Resources:

• Skills Hub Business: Curriculum-aligned activities that require zero prep time

• Employer Case Studies: Built-in real-world examples for careers links

• Enterprise Skills Student Reflections: Can be used as discussion starters or evaluation tools