Business Studies 0450/11 May/June 2023: question paper and mark scheme

Mark scheme

1(a) Define ‘specialisation’. 2 Award 2 marks for a full definition. Award 1 mark for the partial definition. When people/businesses/countries concentrate on what they are best at [2] OR Focusing an individual or group on one particular skill or process that they are suited to or for which they possess the correct skills [2] OR Way in which work is divided so each worker concentrates on a specific task [1] so they become expert at it [1] Partial definition, e.g. Workers do only one job [1] Other appropriate responses should also be credited. 1(b) Identify two methods of production. 2 Only award the first two responses given. Award 1 mark per method (max 2). Two from: Do not award answers such as lean production or cell Job (production) production. Batch (production) Flow/mass (production) 1(c) Outline two advantages to WLT of using quality 4 To use words from the stem as application, the reference assurance. must be appropriate, (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant advantage (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference to this business question: (max 2). Carpets 40%/exported Points might include: Globalisation Reduces faults/errors at all stages of production/fewer Specialisation mistakes [k] when making carpets [app] 60 (employees) Less waste/less rework (of faulty products) [k] which Efficiency could help improve efficiency [app] Manufactures/production Encourages teamwork which may motivate worker [k] among its 60 employees [app] Other appropriate examples can be credited. Fewer customer complaints/fewer customer returns/replacements [k] Do not award: Better brand image/improve/maintain reputation [k] improve customer satisfaction Reduce inspection costs/do not need to hire inspectors [k] better quality Allows business to know at what stage mistakes happen increase sales [k] lower cost on its own encourages teamwork/motivation on its own. Other appropriate responses should also be credited. 1(d) Explain one opportunity and one threat of globalisation 6 To use words from the stem as application, the reference for WLT. must be appropriate, (i.e. make sense) in relation to the point being made. Award 1 mark for each opportunity/threat (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference to this business question: (max 2). Award one mark for each relevant explanation Carpets (max 2). 40%/exported Specialisation Opportunities might include: 60 (employees) Increase potential sales/access to more markets [k] as it Efficiency exports 40% of its products [app] increasing revenue Manufactures/production [an] Cheaper raw materials from other countries [k] to Other appropriate examples in context can be credited. manufacture [app] which can improve the profit margin [an] Accept sales as either [k] or [an] but not both. Labour may be cheaper [k] reducing (labour) costs [an] Economies of scale or relevant examples [k] Global brands are more recognised/desirable [k] Threats might include: Increased competition [k] leading to a reduction in market share [an] Employees may leave if WLT cannot pay as much as international competitors [k] so may lose some of its 60 employees [app] increasing recruitment costs [an] Over dependent on supplies from other countries [k] Other appropriate responses should also be credited. 1(e) Do you think improving labour skills is the best way for 6 This is a general question so there are no marks for a manufacturing business to increase efficiency? application. Justify your answer. For evaluation to be awarded justification will usually follow Award up to 2 marks for identification of relevant points. on from relevant analysis of points. Award up to 2 marks for relevant development of points. Award up to 2 marks for justified decision as to whether Do not award as [an]: improving labour skills is the best way for a manufacturing increased productivity business to increase efficiency. profitability lower cost Points might include: more output Improving labour skills: Able to work faster [k] which will increase output per worker [an] Fewer mistakes are made [k] leading to less rework/wastage [an] Training takes employees time [k] which will lower output in the short-term [an] Increase training costs [k] which will increase unit costs [an] Workers are more versatile/ flexible [k] Other ways might include: Automation/machinery [k] allows operation with fewer employees [an] Lean production/Just-in-time/Kaizen [k] therefore lower cost per unit [an] Improved motivation or methods of motivating, e.g. piece rate [k] Other appropriate responses should also be credited. 1(e) Justification might include: Improving labour skills can mean that employees make fewer mistakes. [k] leading to less rework [an]. Whereas automation [k] allows the business to operate with fewer employees [an]. Improving labour skills is the best way, because automation could lead to redundancies which may demotivate the remaining employees [eval] and potentially leading to less output overall [eval].

Mark scheme

2(a) Identify two reasons why a business might have cash- 2 Only award first two answers given. flow problems. Award 1 mark per reason (max 2). Points might include: • Too much inventory • Growing too quickly/overtrading • Allow customers/ trade receivables too long to pay • Paying suppliers/ trade payables too quickly • Seasonal /low demand • Poor (financial) planning Other appropriate responses should also be credited. 2(b) Calculate X and Y. 2 $ sign not required. Award 1 mark for each correct calculation (max 2). X = $10 000 or 10 Y = $20 000 or 20 2(c) Identify four examples of a cash inflow. 4 Only award the first four responses given. Award 1 mark per example (max 4). Points might include: Can award ‘sales’ if the candidate does not identify specific (Cash) sales/revenue examples (of cash or credit sales). Payments from trade receivables/money from credit sales Can allow ‘additional income from renting assets’. Grants Bank loan Allow Debt factoring if seen. Sponsorship Sale of non-current assets Do not award trade receivables alone. Funds from investors/share issue/capital introduced by owner Dividends from shares in other companies Interest received from savings/bonds/investments Other appropriate responses should also be credited. 2(d) Explain one advantage and one disadvantage to LMA of 6 To use words from the stem as application, the reference becoming a private limited company. must be appropriate, (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant advantage/disadvantage (max 2). Award 1 mark for each relevant reference to this The following words are likely to be appropriate for this business (max 2). Award 1 mark for each relevant question: explanation (max 2). Restaurant Partnership Points might include: Remain small Advantages: 20 years ago Limited liability [k] so personal assets are not at risk if Family(-owned) the business is not able to repay its debts/ only liable for the amount invested [an] Other appropriate examples in context can be credited. Separate legal identity [k] so the owners are not held responsible for the actions of the business [an] which is not true for a partnership [app] Able to raise finance by selling shares [k] to fund expansion [an] if the business decides it does not want to remain small [app] Continuity [k] Can choose who buys shares [k] Disadvantages: More legal formalities [k] which takes time away from other activities [an] in the restaurant [app] Separation of ownership and control [k] so the owners may not be involved /agree with business decisions taken [an] as the directors may not listen to the family [app] Expensive/time consuming to change to this form of business organisation [k] Accounts must be made available [k] Dividends may/ be paid [k] reducing retained profit [an] Other appropriate responses should also be credited. 2(e) Explain two reasons why a business might remain 6 This is a general question so there are no marks for small. Which reason is likely to be most important? application. Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for justified decision as to which reason is likely to be the most important reason why a business might remain small. Points might include: Access to capital/lack of finance [k] which makes it difficult to fund expansion/working capital [an] Small market [k] so there is not sufficient demand [an] Lack of skills/knowledge to expand/larger business more difficult to manage [k] so more likely to make mistakes if expand [an] Lack of workers [k] Type of industry/service industries (offer a personal service)/specialised products [k] where close contact maybe needed [an] Personal objectives/owner’s objectives or example such as better communication with customers, keeping control [k] which might help retain/increase customer loyalty [an] Market dominated/controlled by a few large competitors [k] so will struggle to attract more customers [an] Other appropriate responses should also be credited. 2(e) Justification might include: One reason is the size of the market [k] as there may be insufficient customers [an]. Another reason is lack of finance [k] making it difficult to fund expansion [an]. The size of market is a more important reason why a business might remain small as without customers there is no revenue [eval], which is likely to reduce the need for finance anyway [eval].

Mark scheme

3(a) Define ‘job description’. 2 Award 2 marks for a full definition. Award 1 marks for a partial definition. Outlines the responsibilities and duties to be carried out by someone employed to do a specific job [2] OR A list of the key points about a job, job title, key duties, responsibilities, and accountabilities [2] OR A description of the tasks, role, and responsibilities of a particular position [2] OR What the job entails/explains the job with a list of suitable content [2] Partial definition, e.g. What they must do in a job/list of content [1] 3(b) Identify two levels from Maslow’s hierarchy of needs. 2 Only award the first two responses given. Do not award examples such as job security. Award 1 mark per level (max 2). Two from: Do not award answers such as ‘psychological’ or ‘basic Physiological/physical needs’ as too vague. Safety/security Social/(love and) belonging Esteem Self-actualisation 3(c) Outline two factors DZD should consider when deciding 4 To use words from the stem as application, the reference which applicants to recruit. must be appropriate, (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant factor (max 2). The following words are likely to be appropriate for all Award 1 mark for each relevant reference to this business responses on this question: (max 2). Delivery business or examples such as parcels 60 employees Points might include: Large business Experience [k] of delivering parcels [app] (20) vehicles Qualifications or relevant examples such as do they Part-time have a driving licence [k] to drive the (20) vehicles [app] Planning to expand Skills or examples such as good at communication [k] as Maslow will work in a large business [app] Human resource director Whether they match the requirements of business/job or examples such as physical ability/know the area [k] Other appropriate examples in context can be credited. willing to work part-time [app] Whether they match the culture of the business [k] Performance during interview/testing [k] Age [K] References [K] Other appropriate responses should also be credited. 3(d) Explain two sources of finance DZD might use for the 6 To use words from the stem as application, the reference new vehicles. must be appropriate, (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant source of finance (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: Award 1 mark for each relevant explanation (max 2). Delivery business or examples such as parcels Planning to expand/expansion Points might include: Large business Bank loan [k] as able to purchase immediately [an] so 20 (vehicles) there is no delay to the planned expansion [app] Retained profit [k] as it's a large business [app] as no Do not award ‘vehicles’ as application as stated in question. need to repay [an] Other appropriate examples can be credited. Leasing [k] of the 20 [app] vehicles as do not need to Do not award short-term options such as overdraft as not make a large initial payment [an] appropriate in this context. Hire purchase [k] Grant [k] Selling of assets [k] Owner’s capital/share issue [k] Debenture [k] Crowdfunding [k] Other appropriate responses should also be credited. 3(e) Do you think a service business should only employ 6 This is a general question so there are no marks for part-time workers? Justify your answer. application. Award up to 2 marks for identification of relevant points. The focus should be on the benefit/cost to the business not Award up to 2 marks for relevant development of points. the worker. Award up to 2 marks for justified decision as to whether a service business should only employ part-time workers. Do not award points such as part-time workers are likely to Points might include: be less tired, more motivated, lack skills, do not have a contract. Part-time: When not working no need to pay wages [k] helping to Do not award answers which confuse part-time with reduce labour costs [an] temporary/seasonal workers. Need to recruit/train more employees [k] taking more time/money [an] Could allow the business to recruit wider range of skills [k] More flexible hours/less likely to take time off for appointments [k] Easier to extend worker hours at busy times [k] or [an] Some employees may not be willing/want part-time jobs [k] so may miss out on possible candidates if not offered full-time option [an] Full-time: Able to offer consistency of service [k] so could improve reputation/increase customers [an] Workers may be committed to business [k] which could increase the productivity of the business [an] Easier to communicate/update [k] Less workers needed [k] 3(e) Other appropriate responses should also be credited. Justification might include: Part-time employees are only paid when they are working [k] reducing labour costs [an]. However, consistency of service may fall [k] which could damage the business reputation [an]. A service sector business especially should not have only part-time employees as service quality is vital for customer loyalty [eval] and therefore sales. [eval].

Mark scheme

4(a) Identify two factors that might affect the accuracy of 2 Only award the first two answers given. market research. Award 1 mark per factor (max 2). Points might include: Sample size Sample chosen/who is asked Interviewer experience/interviewer bias Wording of the questions Who carried out research Age of information/when data gathered/information might be out of date People’s actions do not always match what they say Anonymity Bots or use of AI Other appropriate responses should also be credited. 4(b) Identify two benefits to a business of using market 2 Only award the first two responses given. segmentation. Award 1 mark per benefit (max 2). Points might include: Able to tailor goods to specific needs of segment/know what to produce Identify gaps in the market To help decide best place to sell Research is simpler Help focus spending/make best use of resources Help target promotion/advertising Help set prices Help increase sales/revenue Other appropriate responses should also be credited. 4(c) Outline two ways NLR might respond to environmental 4 To use words from the stem as application, the reference pressures. must be appropriate, (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant way (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference made to this question: business (max 2). • Skincare or examples such as hand cream • Packaging Points might include: • 85% of consumers/customers Reduce amount of materials used/wastage [k] when • Product life cycle making its skincare products [app] • Market research Use recycled materials [k] for the packaging [app] • Branded Develop environmentally friendly products [k] based on its market research [app] Other appropriate examples can be credited. Buy energy efficient/environmentally friendly machinery/use renewable energy [k] Do not award environmental pressures as [app] on its own Offer different sizes/only make to order/reduce number as stated in question. of products available [k] Alter/reduce transport use [k] Promote/support environmentally friendly causes [k] Ask customers to reuse containers (when buying from shops) [k] as 85% of consumers (want the business to respond to environmental pressures) [app] Other appropriate responses should also be credited. 4(d) Explain how NLR’s pricing decisions might be affected 6 Attract customers/To use words from the stem as at two different stages of the product life cycle. application, the reference must be appropriate, (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant stage of life cycle/pricing method (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference to this business question: (max 2). Award 1 mark for each relevant explanation (max Skincare or examples such as hand cream 2). 85% Market research Points might include: Packaging During introductory stage [k] the business may set a low Environmental pressures price to attract customers [an] to their hand cream [app] Branded (product) At growth stage [k] prices may be lowered due to Market segmentation increased competition [an] At maturity stage [k] price is likely to be similar to Other appropriate examples in context can be credited. competitors to retain market share [an] for the branded products[app] During decline stage[k] discounts might be offered to maintain sales/ sell of remaining inventory [an] Skimming pricing [k] can be used at the introductory stage to recover development costs [an] of new packaging [app] Penetration pricing [k] in some market segments [app] Cost plus pricing [k] Competitive pricing [k] Promotional pricing [k] Other appropriate responses should also be credited. 4(e) Do you think promoting the brand image is the most 6 This is a general question so there are no marks for important role of packaging? Justify your answer. application. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for justified decision as to whether promoting the brand image is the most important role of packaging. Points might include: This can help the product attract customers/stand out against competitor's products [k] which can help increase/maintain sales [an] leading to higher revenue [an] Protect the product [k] so the product does not get damaged/can be kept fresh [an] which can help reduce the amount of wastage [an] Ease of storage/transport [k] which could lead to lower storage/transport costs [an] Provide information about the product [k] Legal requirements [k] as a business might have to identify the ingredients to avoid legal action [an] Easy to open the container and use the product [k] Justification might include: Packaging helps the product stand out against competitor's products [k] helping increase sales [an]. Protecting the product is important [k]to keep the product fresh [an] This is the most important role because damaged goods will not sell [eval] Therefore, brand image is not the most important role although customers need to be aware of the product, to buy. [eval]