Business 9609/13 May/June 2022: question paper and mark scheme

Mark scheme

1(a) Define the term ‘workforce planning’. 2 Workforce planning is an assessment of the number of employees (1) and the skills of employees (1) required to meet the future needs/objectives of the business (1) Clear definition of 2 of the factors listed above 2 marks Partial definition of 1 of the factors listed above 1 mark No creditable content 0 marks 1(b) Explain two advantages to a business of using induction training. 3 Induction training is training given to new employees when they join a business. Answers could include: Employees will know what is expected of them / know how to do the job Employees will understand their role within the overall business Employees will become familiar with the work practices in this business which might be different to a business where they were previously employed Employees would understand the internal structure of the business including the chain of command Employees will understnad future routes for promotion/progression Attracts employees as it indicates the willingness of a business to invest in its employees Accept any other valid response. Clear explanation of two advantages to a business of using induction training 3 marks Clear explanation of one advantage or a partial explanation of two advantages 2 marks Partial explanation of one advantage or a list of two advantages 1 mark No creditable content 0 marks

Mark scheme

2(a) Define the term ‘corporate social responsibility’ (CSR). 2 Corporate social responsibility is when a business considers the impact of its activity (1) on all/different stakeholders. (1) Business policies to show the commitment of a business to the well-being of society (1) and the environment. (1) Goes beyond legal responsibilities (1) Clear definition of 2 of the factors listed above 2 marks Partial definition of 1 of the factors listed above 1 mark No creditable content 0 marks 2(b) Explain two disadvantages to a business of having CSR as a business 3 objective. Answers could include: CSR is likely to involve additional costs for a business A business that fails to meet its CSR aims/claims (e.g. window-dressing Social responsibility might mean different things in different countries/cultures so can make it difficult for businesses that trade regionally or internationally. It can be hard for a business to understand what is most important in terms of CSR in different countries/regions Stakeholder conflict: different stakeholder groups have different expectations of any business and might want a business to focus on different issues during its activities Too much focus on CSR and not enough on profit Accept any other valid response. Clear explanation of two disadvantages to a business of having CSR as a business objective 3 marks Clear explanation of one disadvantage or a partial explanation of two disadvantages of having CSR as a business objective 2 marks Partial explanation of one disadvantage or a list of two disadvantages 1 mark No creditable content 0 marks

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3 Explain why a business might choose to hold low levels of inventory. 5 Inventory is the amount of goods held ready for sale or components ready for use in a business. Answers could include: Items can go out of fashion resulting in inventory being unsold or unused but there will still have been a cost to the business Storage space might be limited therefore limiting the amount that can be held Storage conditions would need to be suitable to prevent deterioration of inventory. Some items held in stock can become damaged and then cannot be sold or used at all Items might be made/obtained to order when required (JIT) rather than being held in stock New businesses might only be able to afford to hold low levels of inventory A business might be involved in specialised work for which there is not a high demand Accept any other valid response. Effective explanation of why a business might choose to hold low levels of inventory 4–5 marks Limited explanation of why a business might choose to hold low levels of inventory 2–3 marks Explanation of inventory levels 1 mark No creditable content 0 marks

Mark scheme

4(a) Define the term ‘price discrimination’. 2 Price discrimination is when a business charges a different price (1) in different markets (1) for the same product. (1) Clear definition 2 of the factors listed above 2 marks Partial definition 1 of the factors listed above 1 mark No creditable content 0 marks 4(b) Explain two disadvantages to a business of using competitive pricing. 3 Answers could include: Competitive pricing is when a business bases its pricing on that charged by its competitors. That price might be lower, higher or the same as competitors. Might mean that a business cannot cover its costs In order to maintain lower prices, it requires suppliers to lower their prices which may affect supplier relationships Could lead to lower quality products in order to reduce price Could start a price war if competitors also reduce prices If a business’ prices are lower than competitors it might lead to consumers thinking that the lower priced product is of inferior quality, leading to a fall in sales If price is same as competitors, brand recognition might cause customers to choose the competitors A business might spend too much time monitoring competitors’ prices rather than developing other aspects of the business A business might lose focus on differentiation of its product(s) in terms of customer service, etc. Accept any other valid response. Clear explanation of two disadvantages to a business of using competitive pricing 3 marks Clear explanation of one disadvantage or a partial explanation of two disadvantages to a business of using competitive pricing 2 marks Partial explanation of one disadvantage or a list of two disadvantages 1 mark No creditable content 0 marks

Mark scheme

5(a) Analyse the disadvantages to a sole trader of changing to a partnership. 8 Level Description Marks 4 Good analysis of the disadvantages to a sole trader 7–8 of changing to a partnership 3 Limited analysis of the disadvantages to a sole 5–6 trader of changing to a partnership 2 Application of the disadvantages to a sole trader of 3–4 changing to a partnership 1 Knowledge and understanding of sole trader or 1–2 partnership 0 No creditable content 0 Answers could include: Knowledge and understanding 2 marks Demonstrates a clear understanding of being a sole trader Demonstrates a clear understanding of being a partnership. Application 2 marks Reference to the disadvantages of changing from a sole trader to a partnership business. Analysis 4 marks Loss of ownership. The sole trader might have been the sole owner of their business for some time and this change would be difficult to take, knowing that they no longer fully own their business. Shared decision-making. New partners might not agree with the approach of the original owner. Previously all decision-making was done by the sole owner of the business. Agreement would need to be reached with the new partner(s) which would take time. Any advantage of quick decision-making might be lost Shared profit. Previously any profit made was for the sole owner but after taking in partners any profit would have to be shared between them Responsible for the actions of the partner(s). The actions of one partner are binding on all other partners. If one partner’s actions result in a large debt, then all partners are liable for that debt whether they agreed with the action or not. Accept any other valid response. 5(b) Discuss whether entering into a franchise agreement is the best way for 12 a new entrepreneur to start a business. Level Description Marks 4 Effective evaluation of whether entering into a 9–12 franchise agreement is the best way for a new entrepreneur to start a business. 3 Limited evaluation of whether entering into a 7–8 franchise agreement is the best way for a new entrepreneur to start a business. 2 Analysis and application of entering into a franchise 3–6 agreement as a way to start a business 1 Knowledge and understanding of a franchise 1–2 agreement/new entrepreneur/start a business 0 No creditable content 0 Answers could include: Knowledge and understanding 2 marks Understanding of a franchise agreement Understanding of new entrepreneur Understanding of starting a business Application 2 marks Clear reference to a franchise agreement Reference to ways to start a business Analysis 2 marks Advantages of franchise agreement include: There is some reduction in the risk of starting a new business because the franchise will be an established business with a recognised reputation/product The franchisor may offer help with training of staff and with learning essential business management skills Access to market research that has been undertaken by the franchisor Advertising by the franchisor is likely to be more widespread than an individual with a new business could afford. The franchisee would have access to the marketing expertise within the franchise ‘family’ Central purchasing of goods/materials by the franchisor could mean bulk- buying cost benefits for the franchisee 5(b) Analysis 2 marks continued Disadvantages of a franchise agreement include: Some franchises are very expensive to buy into. More established franchises are more profitable The entrepreneur will have to follow the procedures and product/service guidelines of the franchisor, not allowing individuality in their approach to the business The entrepreneur might be able to source supplies cheaper elsewhere, but it is usual that goods/materials are purchased from the franchisor Franchise advertising can be nationwide but might not be specifically relevant to the locality of the entrepreneur. Individual franchisees often have to carry out additional marketing for their own area. Some of the revenue/profit of the business will have to be paid to the franchisor, reducing the amount of profit enjoyed by the entrepreneur The reputation of the new business could be affected negatively because of the actions of another franchisee or the franchisor Evaluation 6 marks Any judgements/conclusions can be made at any point in the essay not just in a concluding section. A judgement may be made using the following arguments: A franchise might be safer but is the lack of control worth the extra security? The reputation of the new business depends on the rest of the franchise maintaining the expected standards. If this does not happen, then the individual franchisee can see their business affected negatively because of the actions of another franchisee Would it be more suitable for an entrepreneur to start a business by becoming a sole trader, a partnership or a private limited company? The decision might depend on how risk averse the entrepreneur is, but safety is not the only factor to be considered The skill level of the entrepreneur will also impact on how successful the business is, whether part of a franchise or not A supported judgement may be made that the advantages outweigh the disadvantages or vice versa. Accept any other valid response. internal stakeholders.’ Discuss the extent to which you agree with this view. Level Description Marks accounts of a public limited company are only useful to internal stakeholders accounts of a public limited company are only useful to internal stakeholders accounts of a public limited company are only useful to internal stakeholders 2 Limited analysis with application of the view that the 5–10 useful to internal stakeholders accounts/public limited companies/stakeholders 0 No creditable content 0 Answers could include: Knowledge and understanding 4 marks Clear understanding of public limited companies Clear understanding of stakeholders Application 4 marks Reference to internal and/or external stakeholders Analysis 6 marks Internal stakeholders e.g.: Employees, managers and shareholders/owners are the internal for future financial planning Shareholders are interested in the financial performance of a business because they have invested money in the hope of a financial return when the business is profitable Employees will use the accounts to assess the possibility of wage/salary increase and the prospects for the future performance of the business

Mark scheme

6 External stakeholders e.g.: Banks might be approached by the business for a bank loan and the meet repayments business and to decide whether or not to buy shares in the business amount of taxation that is due to be paid. Evaluation 6 marks Any judgements/conclusions can be made at any point in the essay not just in a concluding section. A judgement might be made that: share or that it is required by law to provide, and there will be a lot of detailed information that will not be included Some internal stakeholders i.e., managers will have more information available to them for example, the profitability of different parts of the contain only the amount of information that the company is obliged to publish? Could the accounts have been ‘window dressed’? Does extra-ordinary financial activity in one accounting period make the businesses in the same industry? For example, if a large asset was sold or purchased, if a large loan was repaid or taken out. Accept any other valid response.

Mark scheme

7(a) Analyse the benefits to a business of niche marketing. 8 Level Description Marks 4 Good analysis of the benefits to a business of niche 7–8 marketing 3 Limited analysis of the benefits to a business of 5–6 niche marketing 2 Application of the benefits to a business of niche 3–4 marketing 1 Knowledge and understanding of niche marketing 1–2 0 No creditable content 0 Answers could include: Knowledge and understanding 2 marks Clear understanding of a niche market. Application 2 marks Reference to the benefits to a business of niche marketing Analysis 4 marks A business can focus on a small part of a larger market and therefore be able to meet the needs of a group of consumers more effectively. Products can be designed specifically for the identified group of customers It is an opportunity for a smaller business to compete with large businesses serving a mass market Marketing can be aimed directly at a specific demographic which can be less costly due to not spending money on marketing that does not result in any additional or repeat customers There will be fewer competitors than in a mass market because of the individuality of the products Usually, a higher price can be charged because of the uniqueness of products, therefore leading to the possibility of higher profit margins There is often a higher status or image (brand image) resulting from product differentiation Accept any other valid response. 7(b) Discuss whether a successful soft drinks business needs to continue to 12 carry out market research. Level Description Marks 4 Effective evaluation of whether a successful soft 9–12 drinks business needs to continue to carry out market research 3 Limited evaluation of whether a successful soft 7–8 drinks business needs to continue to carry out market research 2 Analysis and application of whether a successful 3–6 business needs to continue to carry out on market research 1 Knowledge and understanding of market 1–2 research/successful business/soft drinks business 0 No creditable content 0 Answers could include: Knowledge and understanding 2 marks Clear understanding of market research. Clear understanding of successful business Clear understanding of soft drinks business Application 2 marks Reference to business success linked to market research Reference to market research in the soft drinks industry Analysis 2 marks Market research can reveal changes in customer preferences and changes in market behaviour Market research is expensive, but the information can lead to more demand for the product of a business Accurate information from market research could contribute to the success of a business Market research may be needed to carry out product portfolio change Market research might be needed for product development/diversification Evaluation 6 marks Any judgements/conclusions can be made at any point in the essay not just in a concluding section. 7(b) The judgement that market research is still needed may be made on the following grounds: Does the highly competitive soft drinks industry make continuing market research essential? Is market research needed to maintain the USP (the strong brand image) of a successful soft drinks business? To what extent is market research needed to ensure that a business keeps up to date with the perceptions of their target market? If the brand has a high degree of loyalty and the products are static there could be an argument for less market research, reducing costs Can any business afford to relax and not keep up to date with what their competitors are offering through continuous market research? Is continuing market research needed to retain market leadership and compete with a high level of competition? Does a basic product such as a soft drink justify spending money on continuing market research? How fast are customer tastes changing? Many soft drinks businesses now promote themselves as providers of ‘healthy’ drinks. Could a lack of market research mean that this trend is missed and opportunities lost? Accept any other valid response.