Business 9609/23 May/June 2023: question paper and mark scheme

Mark scheme

1(a)(i) Identify one element of the marketing mix. 1 Indicative content Identification of an element may include: Place Price Product Promotion Accept all valid responses. 1(a)(ii) Explain the term consumer market. 3 AO1 Knowledge and understanding AO2 Application 1 mark 2 marks 2 marks Developed application of one relevant point to a business context. 1 mark 1 mark Knowledge of one relevant point is used to answer the Limited application of one relevant point to a business question. context. 0 marks 0 marks No creditable response. No creditable response. Indicative content AO1 Knowledge and understanding Knowledge of consumer market may include: Somebody who buys goods or services. For their own personal use/is the end user/final consumer. AO2 Application Limited application applies knowledge of consumer market to a product OR business. Developed application + applies knowledge of consumer market to a product AND a business. Application can be made to FM or any other scenario/context/business/product. Accept all valid responses. 1(a)(ii) Exemplar and annotations Mark Rationale Sells products directly to consumers rather than 3 An answer which starts with the knowledge and then businesses FM sells instruments to customers . applies it to FM. Sell to the final user known as B2C , FM sell 3 Again, knowledge first, followed by application to a musical instruments to musicians and students who are business scenario (B2C) and to a product (musical the final users . instruments). Selling musical instruments to students not to other 3 A different way of answering the question. There is businesses as musicians and students are the final application of both elements of consumer markets (the consumers . product and businesses) as well as clear knowledge of the concept by the end of the response (final consumers) Goods sold to end user , not sold to other 2 Clear knowledge. Some application to businesses, but businesses . not a product. The buyers are the final consumers . 1 Not a perfect definition, but enough to award the knowledge mark. No attempt to apply. Market for consumers to buy something and uses 0 Starts with a tautology. No knowledge of consumer branding to promote product to wholesalers . market. Too vague. 1(b)(i) Refer to Table 1.1 and other information. Calculate FM’s labour turnover rate for 2022. 3 Numbers leaving = 4 + 6 + 5 + 3 + 6 = 24 (1) Total staff = 108 Labour turnover = 24 / 108 × 100 (1) = 22.2%. Accept 22 (3) OFR Exemplar 3 marks Correct answer 22.2% allow 22 Working and % do not matter. Must be three to denote the three marks. 2 marks Two of the following: To award two marks, there must be: Correct formula Two and a Correct calculation of numbers left (24) OR Correct identification of data 24/108 One , one and one OR An incorrect answer with one mistake allowing OFR for final stage. 1 mark One of the following: To award one mark, there must be: Correct formula One and two Correct calculation of numbers left (24) Correct identification of data 24/108 0 marks No creditable content. To award zero marks, there must be: One 1(b)(ii) Explain one method of reducing FM’s labour turnover. 3 AO1 Knowledge and understanding AO2 Application 1 mark 2 marks 2 marks Developed application of one relevant method to a business context. 1 mark 1 mark Knowledge of one relevant method is used to answer the Limited application of one relevant method to a business question. context. 0 marks 0 marks No creditable response. No creditable response. Indicative content Responses may include: AO1 Knowledge and understanding Knowledge of a method that may affect reduce labour turnover : Financial methods e.g. commission, bonus etc. Non-financial methods e.g. training, job enrichment etc. Reference to theorists e.g. Taylor, Mayo etc. AO2 Application Limited application , applies knowledge to FM once. Developed application + applies knowledge to FM twice OR applies once to FM AND develops answer to explain a benefit of the method given. Pay a major factor 25% of those leaving did so for higher pay at a competitor Opportunities for promotion/job enrichment,5 left because of lack of opportunities and 4 for better jobs in another industry Team working/job-redesign, as 3 unhappy at work 1(b)(ii) Accept all valid responses. Exemplar and annotations Mark Rationale Non-financial methods such as job enrichment , e.g. 3 A non-financial method explained in the specific context one of the reasons employees left is lack of promotion of FM by using the information in Table 1.1 and job enrichment would improve their skills and develops answer to explain a benefit of the method. increase their opportunity of promotion . Increase employee salary , 6 employees left FM 3 A financial method in this one and there is context because of higher pay at a competitor if FM from the data in Table 1.1, also how the method given increase wages employees will be more satisfied is linked to the issue, so two . and less likely to leave. . Some workers are unhappy with the work environment 3 Although the appears first, it cannot be awarded . Group working could be used Group working until the has been found. However, there is obvious will ensure a good communications environment . , so you can go back and award the . Training for new processes because employees are 2 Training is a non-financial method . The context of having difficulties in adapting to the new production new production method linked to this is reasonable , method . but only one point of application. Increase employee salary because the more 1 Knowledge of a method. The rest of the answer is not workers are paid the more motivated they become . applying it to the context so (Not Answering Question). Labour turnover refers to the number of workers 0 Although there is some relevant context, there is no leaving over the total number of workers 4 people knowledge of a method, so no marks can be awarded. left for better jobs . 1(c) Analyse two impacts on FM’s costs if it enters international markets. 8 Level AO1 Knowledge and AO2 Application AO3 Analysis understanding 2 marks 4 marks 2 marks 2 3–4 marks Developed analysis Developed analysis that identifies connections between causes, impacts and/or consequences of two points. Developed analysis that identifies connections between causes, impacts and/or consequences of one point. 1 1–2 marks 1–2 marks 1–2 marks Knowledge of two relevant Application of two relevant Limited analysis points is used to answer the points to a business context. Limited analysis that identifies question. Application of one relevant connections between causes, Knowledge of one relevant point to a business context. impacts and/or consequences point is used to answer the of two points. question. Limited analysis that identifies connections between causes, impacts and/or consequences of one point. 0 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. 1(c) Indicative content Knowledge of impacts on costs (max 2 s), may include: AO1 Knowledge and understanding Increased costs – labour, delivery, capital, documents, marketing, research etc. Reduced costs – bulk buying, cheaper labour/land costs in other country. AO2 Application Max one for application for the first impact on costs and a second for application for the second impact on costs. Application of knowledge of an impact on costs to FM (max 2 s), including: Increased costs might occur, due to: The change to mass customisation Not a well-known brand in other countries After sales customer service improvement as product tailored to customer wants Import/export taxes Translation of documents into other languages Reduced costs could come in the long term from: Mass customisation Increase in market size allowing economies of scale Labour/land in another country cheaper than country Z AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis candidate shows two or more links in the chain of analysis or a two-sided analysis. Extra distribution costs – require extra delivery drivers High costs in the short term – such as promotion costs Lower in the long term – become established in new country allow reduced marketing Mass customisation – benefit from economies of scale High cost of investment – if take out a loan interest will add to costs. Accept all valid responses. 1(c) Exemplar and annotations AO1 Knowledge AO2 Application AO3 Analysis There will be an increase in costs . FM will deliver the instruments over a So, FM will need to pay more in Annotations for the first impact longer distance delivery costs as the delivery driver should be placed in the left-hand will take a longer time and there will be margin. higher fuel costs . It will increase labour costs For example, translation employees Because the firm may not understand Annotations for the second impact other countries languages and will should be placed in the right-hand need advertising and documents in the margin. language of that country . 1(d) Evaluate the impact on FM’s stakeholders of a change from batch production to mass customisation. 12 Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation understanding 2 marks 2 marks 6 marks 2 marks 3 5–6 marks Developed evaluation in context A developed judgement/conclusion is made in the business context. Developed evaluative comments which balance some key arguments in the business context. 2 2 marks 2 marks 2 marks 3–4 marks Developed knowledge of Developed application of Developed analysis Developed evaluation relevant key term(s) relevant point(s) to the that identifies connections A developed and/or factor(s) is used to business context. between causes, impacts judgement/conclusion answer the question. and/or consequences. is made. Developed evaluative comments which balance some key arguments. 1(d) Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation understanding 2 marks 2 marks 6 marks 2 marks 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key term(s) of relevant point(s) to the that identifies connections A judgement/ and/or factor(s) is used to business context. between causes, impacts conclusion is made answer the question. and/or consequences. with limited supporting comment/ evidence. An attempt is made to balance the arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. No creditable response. Indicative content Responses may include: AO1 Knowledge and understanding Knowledge of one of the key terms (max 2 s), including: Batch production – manufacturing process in which items or products are produced in groups. Mass customisation – manufacturing process that combines the flexibility and personalisation of custom-made products with the low unit costs associated with mass production. Stakeholders – A stakeholder is a person/organisation that has an interest in a company and can either affect or be affected by the business/ examples of stakeholders. 1(d) AO2 Application Limited application applies knowledge of batch/customisation/stakeholders of FM once. Developed application + applies knowledge of batch/customisation/stakeholders of FM twice. Shareholders (a limited company) Change of working practices/environment Change in production methods Move into international market Increase in the volume of output AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis. Analysis marks can be awarded without context. Employees: Change of working practices – employees must learn new skills Redundancies could be an issue – arising from the shift to mass customisation Short term incomes could reduce – as profits may initially fall Shareholders: Forego dividends in the short term – due to the costs of the investment Long-term gains – from increased profits Risk increased – if the expansion fails and profits fall Government: Potential for more taxes – due to higher profits/output Community: Employees likely from the local area – if redundancies occur, it will increase unemployment in the community Suppliers: More business/more profits – but might need different suppliers Customers: Better choice – tailored to customer wants Higher prices – due to increase in costs/quality of the product Bank etc.: Borrowing for investment – may require a bank loan 1(d) AO4 Evaluation Limited evaluation unsupported judgement and/or a weak attempt at evaluative comment. Developed evaluation supported judgement and/or reasonable evaluative comment. Developed evaluation in context supported judgement in context and/or reasonable evaluative comment in context. Weighing up of risks v reward Short term costs v long term costs Costs v benefits Judgement on stakeholder(s) it will most likely impact Judgement on overall impact on a stakeholder(s) Accept all valid responses. Exemplar and annotations A change from batch production to mass customisation will have different impacts on FM’s stakeholders, such as customers, employees, suppliers, and shareholders . Shareholders are the owners of FM who invest their money in the company . They may benefit from mass customisation if it increases the sales and profits of FM by attracting more customers and creating a competitive advantage . Mass customisation may also increase the value and reputation of FM as a customer-oriented and innovative company . However, mass customisation may also reduce the returns and dividends for shareholders if it increases the cost and risk of production for FM . Mass customisation may also require more investment in research and development, technology, and marketing for FM , which may reduce the cash flow and liquidity for shareholders and may also result in a decrease their returns. To conclude, mass customisation can have both positive and negative impacts on FM’s shareholders. Therefore, FM should carefully weigh the benefits and costs of this change and implement it in a way that maximises the value, profits and dividends for the shareholders . AO1 – 2 marks AO2 – 2 marks AO3 – 2 marks AO4 – 6 marks TOTAL – 12 marks

Mark scheme

2(a)(i) Identify one advantage to a business of using job production. 1 Indicative content Identification of an advantage may include: (High) quality product Can customise orders/wants. Workers involved in the entire process. Accept all valid responses. 2(a)(ii) Explain the term just in time (JIT). 3 AO1 Knowledge and understanding AO2 Application 1 mark 2 marks 2 marks Developed application of one relevant point to a business context. 1 mark 1 mark Knowledge of one relevant point is used to answer the Limited application of one relevant point to a business question. context. 0 marks 0 marks No creditable response. No creditable response. Indicative content AO1 Knowledge and understanding. Just-in-time production minimises the time, labour, and materials in a manufacturing process. It does so by only producing goods as they are needed. The desired outcome is a streamlined production system that maintains a minimal amount of on-site raw materials, minimal wait times in the production process and small batch sizes. Knowledge of JIT may include: Inventory control system/production system Buying inventory occurs when needed for production rather than using buffer stock (production). JIT conditions need to be met e.g., reliable suppliers. AO2 Application Limited application applies knowledge of JIT to An example of inventory OR an example of when it is needed. Developed application + applies knowledge of JIT to An example of inventory AND an example of when it is needed. 2(a)(ii) Application can be made to GD or any other scenario/context/business. Accept all valid responses. Exemplar and annotations Mark Rationale Order raw materials when needed . For example, a 3 An answer which starts with the knowledge and then manufacturer requires 1000 pieces of wood to produce applies it to a business context. a product would order when there is 1000 pieces of wood left .This could reduce waste and employees would know that there is not any spare materials so they can’t make mistakes. Holding zero buffer inventories . Components for 3 In the context of the business, GD. making desks will be ordered when GD needs them . This will reduce storage costs for GD . Inventory would come just when needed , but the 2 Clear knowledge. Some application but not developed. company may need expensive IT systems to manage orders . Not keeping any inventory, just ordering when needed. 1 A reasonable definition but no application. . 2(b)(i) Refer to Table 2.1. Calculate GD’s forecast closing balance in 2025. 3 Indicative content Responses may include: Formula/implied formula: closing balance = net cash flow +opening balance (1) Net cash flow = 9 – 12 (1) = –3 (1) Closing balance 2020 = –3 + 1 = –2 (3) Accept 2 in brackets in place of – sign OFR Marks Answer Rationale 3 marks Correct answer Working and $ sign do not matter. –2 or (2) Must be three to denote the three marks. 2 marks Both of the following: To award two marks, there must be: Correct/implied formula (net cash flow +opening Two and a balance) OR Correct calculation of net cash flow (-3) One , one and one OR An incorrect answer with one mistake allowing OFR for final stage. OR 2 (has not included – sign) 1 mark One of the following: To award one mark, there must be: Correct/implied formula (net cash flow + opening One and two balance) Correct calculation of net cash flow (–3) 0 marks No creditable content. To award zero marks, there must be: One 2(b)(ii) Explain one disadvantage to GD’s employees of it being a co-operative. 3 AO1 Knowledge and understanding AO2 Application 1 mark 2 marks 2 marks Developed application of one relevant point to a business context. 1 mark 1 mark Knowledge of one relevant point is used to answer the Limited application of one relevant point to a business question. context. 0 marks 0 marks No creditable response. No creditable response. Indicative content AO1 Knowledge and understanding Knowledge of a disadvantage may include: Complex decisions = uncertainty = poor performance Workers and worker directors might not have skills for decisions Management roles unclear and therefore inefficiencies can occur Unpredictable income for employees Conflict/disagreements between employees AO2 Application Limited application , applies knowledge to GD once. Developed application + applies knowledge to GD twice. Ownership by workers who may be more interested in high profits. Low wages compensated by profit share. Poor decision making by manager. Take decisions on votes not valid arguments. 2(b)(ii) Accept all valid responses. Exemplar and annotations Mark Rationale They may have limited capital as need $2m to open 3 A disadvantage using the context of opening a retail their own retail shop , as the members (employees) shop and that members accept low wages. accept low salaries and the investment may mean a lower share of profits for each of them. They may face conflicts among members, as all have a 3 Conflict is reasonable and two references to the vote, due to differences in opinions , interests or case study for 2 s. planning, especially regarding the plan to open their own retail shop or the management style of Steve . Part of the income employees earn comes from profit- 2 As there is knowledge of a disadvantage so can go share. This may mean that the employees could back and award the APP. face lower income if sales fall or costs rise. They may lack secrecy as the affairs of the co- 1 Lack of secrecy a reasonable disadvantage, but the operative are open to all members and sometimes rest is not specifically related to GD. to the public, which may expose them to competition. They may have inefficient management as Steve, 0 Although there is some relevant context, there is no the Managing Director, spends too much time trying to knowledge of a disadvantage specific to a co-op make people happy rather than solving problems and (inefficient management could be in any business responds to opinions rather than setting long-term structure), so no marks can be awarded. plans. 2(c) Analyse two sources of finance GD could use to open its new shop. 8 Level AO1 Knowledge and AO2 Application AO3 Analysis understanding 2 marks 4 marks 2 marks 2 3–4 marks Developed analysis Developed analysis that identifies connections between causes, impacts and/or consequences of two points. Developed analysis that identifies connections between causes, impacts and/or consequences of one point. 1 1–2 marks 1–2 marks 1–2 marks Knowledge of two relevant Application of two relevant Limited analysis points is used to answer the points to a business context. Limited analysis that identifies question. Application of one relevant connections between causes, Knowledge of one relevant point to a business context. impacts and/or consequences point is used to answer the of two points. question. Limited analysis that identifies connections between causes, impacts and/or consequences of one point. 0 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. 2(c) Indicative content Knowledge of sources of finance (max 2 s), may include: AO1 Knowledge and understanding. Bank loan Open own shop so mortgage Owners’ capital Sale of unused assets Venture capital can be awarded for knowledge of any source of finance. AO2 Application Max one for application for the first source and another for application for the second source Application of knowledge of a source of finance for GD (max 2 s), including: $2m needed Retained profits not known but could make useful contribution if available Few current assets (JIT) so not suitable to convert into cash No loan payments shown so no debts Employees are the owners, low paid Cash balance reducing AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis candidate shows two or more links in the chain of analysis or a two-sided analysis. Analysis of sources of finance may include: Long term loan may be suitable – but would banks lend to a co-operative? Unlikely to be any unused assets – even if there were it may not be enough for such a large sum. Owners/employees/members may not agree with the plan – so may not be willing to contribute more Effect on liquidity – interest payments will increase cash outflow. and can be awarded for analysis of any source of finance. Accept all valid responses. 2(c) Exemplar and annotations AO1 Knowledge AO2 Application AO3 Analysis Exemplar of an advantage Retained profit Employees would receive This option would allow GD Annotations for the first less through profit-sharing at to use its own money source should be placed the end of the year . without increasing its debt in the left-hand margin. or giving up any ownership. However, it would also mean that the employees would receive less profit-sharing at the end of the year, which could affect their motivation and satisfaction. Exemplar of a disadvantage Venture capital Might be attractive to an This option would not Annotations for the investor as have 5 years of require GD to repay or pay second source should be rapid growth with a forecast interest on the money placed in the of higher demand for desks received but may come with right-hand margin. . some conditions or expectations from the investors . This could limit GD’s autonomy or flexibility in running the business or pursuing its social or environmental mission. It could also create a dependency on external funding, which may not be sustainable or reliable in the long term. 2(d) Evaluate whether Steve’s management style will contribute to GD’s future success. 12 Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation understanding 2 marks 2 marks 6 marks 2 marks 3 5–6 marks Developed evaluation in context A developed judgement/conclusion is made in the business context. Developed evaluative comments which balance some key arguments in the business context. 2 2 marks 2 marks 2 marks 3–4 marks Developed knowledge of Developed application of Developed analysis Developed evaluation relevant key term(s) relevant point(s) to the that identifies connections A developed and/or factor(s) is used to business context. between causes, impacts judgement/conclusion answer the question. and/or consequences. is made. Developed evaluative comments which balance some key arguments. 2(d) Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation understanding 2 marks 2 marks 6 marks 2 marks 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key term(s) of relevant point(s) to the that identifies connections A judgement/ and/or factor(s) is used to business context. between causes, impacts conclusion is made answer the question. and/or consequences. with limited supporting comment/ evidence. An attempt is made to balance the arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. No creditable response. Indicative content AO1 Knowledge and understanding Knowledge of management styles (max 2 s), including: Democratic – The manager shares the decision-making power and authority with their employees. The manager encourages and facilitates collaboration and teamwork among the employees and allows them to have a say in how they work. Laissez-faire – The manager gives their employees complete freedom and autonomy to make their own decisions and manage their own work. The manager provides minimal guidance and supervision and trusts the employees to perform well. Autocratic – The manager dictates exactly what they require their subordinates to do and how they should do it. Sets targets. The manager has all the power and authority and does not tolerate any deviation or feedback from the employees. Paternalistic – The manager acts like a parent or a guardian to their employees, providing them with guidance, support, and protection. The manager has all the power and authority, but also cares about the welfare and personal development of the employees. Functions of management – Planning, organising, directing, controlling. 2(d) AO2 Application Limited application applies knowledge of management styles to GD once. Developed application + applies knowledge of management styles to GD twice. There are suggestions that Steve is too democratic/laissez faire or may be described as paternalistic as wants people to be happy. Theory Y manager Managers need to make effective decisions and be responsive, but employees don’t think that Steve makes effective decisions. Steve does not see threats to the business. Steve does not make-long term plans. Steve does not consider the merits of an argument but relies on votes of members. Rapid growth in sales and profits over the past 5 years but negative cash flow recently Evidence of planning as aim to open own retail shop. Motivated employees as Steve concerned about their welfare/demotivated as evidenced by concerns about Steve’s style. AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis. Builds good relationships – particularly as owners are the employees. Some workers may feel that the Steve has the right approach – so feel secure as a result of this; for example, they have a vote and key role in decision making. Suitable for GD’s highly skilled and motivated staff – but could lead to power struggles. There is a lack of strategy for the future of the business – so there is a risk to the security and stability of GD. If threats are not being monitored – then GD is at risk and could fail. Motivated workers – greater productivity Lack of long-term planning – less potential for future growth Plans to open retail shop – evidence of planning. 2(d) AO4 Evaluation Limited evaluation – unsupported judgement and/or a weak attempt at evaluative comment Developed evaluation – supported judgement and/or reasonable evaluative comment Developed evaluation in context - supported judgement in context and/or reasonable evaluative comment in context. An evaluation is likely to come from candidates making a judgment and justification on the effectiveness of Steve’s management style e.g. It may be suggested that the Steve need to be more ‘hands on’ and autocratic, due to the change from batch production to mass customisation. Is this suitable for a co-operative? It may result in conflict which reduces productivity, output and sales. Any changes that might need to be made to make it more effective. Suitability of management styles for a co-operative In relation to the change in production process Judgement on most likely effects on success Accept all valid responses. 2(d) Exemplar and annotations Steve’s management style seems to be a democratic one , which is a type of participative management style . This means that he values the input and opinions of his employees and tries to involve them in decision-making and problem-solving. He also tends to be flexible, adaptable, and responsive to feedback which might suit a co-operative organisation . Some of the advantages of this management style are that it can increase employee engagement, motivation, creativity, and satisfaction . It can also foster a positive work culture, where employees feel respected and valued . It can also lead to better decisions, as more perspectives and ideas are considered . However, some of the disadvantages of this management style are that it can be time-consuming, inefficient, and confusing . It can also create conflicts among employees, or between employees and managers. It can also make it difficult to implement changes or deal with crises, as there may be too much debate or uncertainty . It can also undermine the authority and credibility of the manager, if they appear indecisive, weak, or dependent on others . Therefore, Steve’s management style may not contribute to GD’s future success, unless he can balance it with other styles when needed. For example, he may need to adopt a more authoritative or persuasive style when he needs to set clear goals, communicate expectations, or motivate employees to achieve results . He may also need to adopt a more transformational or visionary style when he needs to inspire employees with a shared vision, foster innovation, or cope with change. He may also need to adopt a more coaching style when he needs to develop the skills and potential of his employees. In conclusion, Steve’s management style has its strengths and weaknesses, but it may not be enough to ensure GD’s future success. He should be able to adapt his style according to the situation, the goals, and the people involved . AO1 – 2 marks AO2 – 2 marks AO3 – 2 marks AO4 – 6 marks TOTAL – 12 marks