Business 9609/42 May/June 2025: question paper and mark scheme

Mark scheme

1 Evaluate the usefulness to QA of the approaches used to develop its business strategy between 2021 and 2024. 20 AO1 Knowledge and understanding Knowledge (max 1 mark) can be awarded for any relevant business knowledge about an approach to develop business strategy, including: • SWOT analysis – strengths, weaknesses, opportunities and threats. Allows a business to identify the influences within the business and those which it may be able to take advantage of / be wary of in the future. • Ansoff matrix – cross references existing and new markets against existing and new product to help decide whether a business should use market development, market penetration, product development or diversification. • Product life cycle – model to plan the movement of a product through the stages of sales; launch, growth, maturity, saturation, decline. • Decision tree – allows a quantitative understanding of the risks and expected values from a decision. These are calculated using probabilities and expected outcomes from making decisions. Allow knowledge of any approach, including: • Blue ocean strategy / red ocean strategy • Scenario planning • PEST analysis • Porter’s five forces • Core competence framework • Force field analysis • Boston matrix (BCG) • Investment appraisal (payback, ARR, IRR and NPV). 1 Award for any explanation of an approach that could be used to develop business strategy, up to a max of 2 marks. SWOT Identified an approach, so only K. SWOT , can be used to identify the internal and external force . 1 K for identification and 1 DEV for a point of explanation. SWOT , can be used to identify the internal and external force to 1 K for identification and 2 DEVs overcome its weaknesses with its opportunities . for two points of explanation. Note: – Candidates can gain full marks for AO1 from one term that is explained ( + + ) or from two terms partially explained ( + and + ). 1 AO2 Application Application (max 2 marks) can be awarded for applying knowledge, analysis or evaluation of an approach to develop business strategy, to QA between 2021 and 2024. • Technology business located in country A • Sells AI smart speakers • 2016 first device (QA1) had high demand • Management buyout (for $20m) in 2012 • 2021 QA becomes a private limited company • Use of Appendix 1 – SWOT analysis • Eight senior managers become directors with equal share split • 2022 – Ansoff matrix used – product development (new product, existing market) • 2022 – QA2 in development – next generation speaker with improved functionality • 2023 – sales of QA1 enter decline stage of product life cycle • 2023 – QA makes a loss for the first time • Use of Appendix 2 – Decision tree • 2023 – decision made to launch the QA2 early • 2024 – launch of QA2 (early) • 2024 – sales higher than expected • 2024 – excess demand, QA unable to increase supply • 2024 – QA launch a website to show inventory availability at retail outlets • 2024 – complaints from customers about QA2 • 2024 – QA makes a public apology about the QA2. 1 AO3 Analysis Analysis is likely to be based on the impact of the approaches used to develop a business strategy for QA between 2021 and 2024 ( and and ) , including: • SWOT analysis – allows a business to use its strengths to overcome its threats and use its opportunities to overcome its weaknesses. Provides an overview of QA and provides the directors with data to enable effective formulation of a business strategy. However, only provides a picture of where the business is right now. Data about the threats and opportunities is only as good as the research it is based upon. In particular, this is a new technology market and QA is a relatively small player in the market – the actions of competitors are unlikely to be covered by a SWOT analysis. • Ansoff matrix – useful tool for helping decision makers in a business see the risk involved in different business strategies. A choice of product development (new product to existing market) allows the business to see a medium level risk. However, this is a simplistic tool and unlikely to be much use in such a dynamic and technologically changing market. With product development being crucial in the technology market, will the Ansoff matrix provide enough data to enable to directors to decide upon a new strategy? • Product life cycle – useful to plot the likely movement of products through stages of sales, which allows QA to predict what might be likely to happen to sales of QA1 as time progresses. Particularly useful when combined with other analytical tools such as the Boston matrix to analyse the product portfolio of QA. However, it is not certain that every product will follow the same pattern of sales, especially in the technology market where there is not an established pattern of sales. There are also large competitors (Google, Apple) who dominate this market, and their actions are likely to have massive effects on the lifecycle of the product. • Decision tree – Allows a quantitative understanding of the outcomes and risks of a decision. Allows the directors to make an objective decision based on the data without subjective issues getting in the way. However, the data can only be as good as the research upon which it is based. Especially in this market where outcomes are unlikely to be known and probabilities may rely on subjective issues which cannot be known in advance. 1 AO4 Evaluation Evaluation ( and and ) including: Evaluation will largely depend on the points raised in the analysis. • A judgement over the usefulness of each approach that QA used to develop strategy between 2021 and 2024. • A judgement over the most useful approach that QA used to develop strategy between 2021 and 2024. • A judgement over the other approaches QA could have used to develop strategy between 2021 and 2024. • What the judgement(s) may depend upon; the actions of competitors, the external environment (social, legal, economic, political, technological), the objectives of stakeholders etc. • Weighing up of the relative usefulness of each approach used in the development of strategy between 2021 and 2024. Accept all valid responses. No credit L1 including: L2 including: (developed L3 including: (developed supporting (limited supporting evidence) evidence with context) supporting evidence) SWOT SWOT analysis is SWOT analysis is the most useful SWOT analysis is the most useful approach analysis is the the most useful approach because it shows because it shows internal data, like QA most useful approach because internal and external factors, unlike having a 6% market share and external approach. it shows internal other approaches, like PEST, factors, unlike other approaches, like PEST, and external which only shows external factors. which only shows external factors. factors. The The usefulness of The usefulness of the approaches The usefulness of the approaches depends usefulness of the approaches depends on the accuracy of the on the accuracy of the data because if QA the depends on the data because if QA makes makes decisions based on inaccurate data, approaches accuracy of the decisions based on inaccurate they might make the wrong decision, leading depends on data. data, they might make the wrong to failure. This might be particularly bad many factors. decision, leading to failure. since the decision tree only has a $0.6m difference, which if it is wrong, could have meant QA launched the QA2 at the wrong time.

Mark scheme

2 Advise QA on a coordinated marketing strategy for the future success of QA2. 20 AO1 Knowledge and understanding The elements of a coordinated marketing strategy: • Objectives • Resources / budget • Research • Marketing mix • Product – product life cycle, Boston matrix • Price • Promotion • Place • Physical evidence • Process • People Marketing strategy may also include: • the changing role of Information Technology (IT) and Artificial Intelligence (AI) in marketing • International marketing, including developing an international market through pan-global marketing or maintain local differences. Award for any explanation of an element of marketing strategy, up to a max of 2 marks. Product Identification of an element of marketing strategy, so only K. Product , involves the design, quality and uses of a product that is sold . 1 K for identification and 1 DEV for a point of explanation. Product , involves the design, quality and uses of a product that is sold. 1 K for identification and 2 DEVs Product can also involve after-sales service, so customers can return faulty for two points of explanation. goods . Note: Candidates can gain full marks for AO1 from one term that is explained ( + + ) or from two terms partially explained ( + and + ). 2 AO2 Application Application (max 2 marks) can be awarded for applying knowledge, analysis or evaluation of a coordinated marketing strategy, to QA, including: • Technology business located in country A • Sells AI smart speakers • 2016 first device (QA1) had high demand • Management buyout (for $20m) in 2012 • 2021 – QA becomes a private limited company • Use of Appendix 1 – SWOT analysis • Eight senior managers become directors with equal share split • 2022 – Ansoff matrix used – product development (new product, existing market) • 2022 – QA2 in development – next generation speaker with improved functionality • 2023 – sales of QA1 enter decline stage of product life cycle • 2023 – QA makes a loss for the first time • Use of Appendix 2 – Decision tree • 2023 – decision made to launch the QA2 early • 2024 – launch of QA2 (early) • 2024 – sales higher than expected • 2024 – excess demand, QA unable to increase supply • 2024 – QA launch a website to show inventory availability at retail outlets • 2024 – complaints from customers about QA2 • 2024 – QA makes a public apology about the QA2. 2 AO3 Analysis Analysis is likely to be based on how a coordinated marketing strategy may affect the success of QA ( and and ), including: • Objectives – could include increasing market share, increasing sales, profit maximisation. Sales maximisation, satisficing etc. • Resources – outsourcing of manufacturing, previous positive brand image from QA1 (although damaged by early release of QA2), possibility of selling more shares to realise capital in QA etc. • Research – use of Appendix 3, future market research into elements of the marketing mix (when decided). • Product – QA2 – next generation smart speaker – new features that may be suggested. • Price – feedback suggests too high, so opportunity to decrease price to increase customer sales/reputation. However, may irritate customers who have previously purchased the QA2. • Promotion – competitors (Google, Apple etc) likely to have very high marketing budgets for promotion with the backing of well-known brands. QA is unlikely to be able to afford a level of promotion to battle these companies head on. Promotion may need to be combined with other elements, such as a product feature which is unique to QA2. • Place – currently retail stores, which is a common distribution channel for smart speakers and technology. Shared shelf space with competitors may make product differentiation difficult. QA could use their own website, which may reduce the cost of intermediaries and allow for lower prices and/or higher profit margin. However, no data as to the best distribution strategy – may need to be combined with research. 2 AO4 Evaluation Evaluation ( and and ) including: Evaluation will largely depend on the points raised in the analysis. • A judgement over the likely success of the chosen marketing strategy. • A judgement over the likely coordination of the chosen marketing strategy. • A judgement over the best marketing strategy. • What the judgement(s) may depend upon; the reactions of competitors, the dynamism of the external environment, the likely development of smart speaker technology beyond 2025, the reactions of customers to the failed launch of the QA2 etc. • Weighing up of the likely success of the marketing strategy for the future success of the QA2. Accept all valid responses. No credit L1 including: L2 including: (developed L3 including: (developed (limited supporting evidence) supporting evidence with supporting context) evidence) QA have to QA have to change QA have to change their promotion QA have to change their promotion change their their promotion to to succeed because of the to succeed because of the promotion to succeed because of complaints. Promotion is the best complaints with 18% of faulty succeed. the complaints. way to change the public products. Promotion is the best way perception and encourage sales. to change the public perception and encourage sales. I advise QA to I advise QA to I advise QA to change its price I advise QA to change its price change its price. change its price because it is the first thing because it is one of the main because it is the customers look at, so that they can complaints from 65% of customers, first thing customers compare competitors’ products so that they can compare look at. with QA and this is likely to be the competitors’ products with QA and main factor affecting QA’s this is likely to be the main factor success. affecting QA’s success.