Business 9609/13 October/November 2021: question paper and mark scheme

Mark scheme

1(a) Define the term ‘marketing mix’. 2 • key decisions made – 4Ps or 4Cs (1) • to market a product (1) • elements/components of effective marketing (1) Sound definition – two of the points listed above. 2 Partial definition – one of the points listed above. 1 No creditable content. 0 1(b) Explain two ways that a business can use the place element of the 3 marketing mix. Answers could include: • allows a business to determine its distribution strategy • ensures a product is made conveniently available for the intended consumer • product is in the right place at the right time • be close to suppliers – to reduce costs • helps decision on potential intermediaries, e.g. wholesalers, retailers • choosing the right place can extend the life of a product • to avoid ethical/environmental criticism from neighbourhoods • Accept any other valid response. Sound explanation of two ways that a business can use the place element of the marketing mix. 3 Sound explanation of one or partial explanation of two ways that a business can use the place element of the marketing mix. 2 Partial explanation of one or a list of two. 1 No creditable content. 0

Mark scheme

2(a) Define the term ‘business stakeholders’. 2 • individuals or groups interested in business (1) • affected by the activities of a business (1) • stakeholders simply listed (such as managers, employees, customers, suppliers, government, etc.) without refence to their relationship to a business (1) Sound definition – two of the points listed above. 2 Partial definition – one of the points listed above. 1 No creditable content. 0 2(b) Explain two reasons why conflict might arise between different 3 stakeholders. Answers could include: • different stakeholders have different expectations/requirements, e.g. shareholders and employees • examples may be given: − impact of business growth on local community – more employment but possible environmental impact − government requires more social responsibility – shareholders may resist − business needs to reduce costs – suppliers resist pressure to reduce prices • Accept any other valid response. Sound explanation of two reasons for stakeholder conflict. 3 Sound explanation of one reason or partial explanation of two reasons for stakeholder conflict. 2 Partial explanation of one reason or a list of two. 1 No creditable content. 0

Mark scheme

3 Explain why it is important for a business to have effective human 5 resource management (HRM). Answers could include: • reference to the essential role and functions of HRM: • recruitment and selection of employees • training and development of employees • responsibility for motivational morale of employees • recognition of the potential importance of effective HRM on all other departments and the business as a whole • Accept any other valid response. Effective explanation with explicit reference to the importance of HRM. 4–5 Explanation of the role of HRM. 2–3 Understanding of HRM. 1 No creditable content. 0 • financial statements (1) • produced by limited companies (1) • issued annually (1) • sent to shareholders (1) financial position (1) Sound definition – two of the points listed above. 2 Partial definition – one of the points listed above. 1 No creditable content. 0 Answers could include: • companies may release only the absolute minimum required by the law – limited information available to stakeholders • accounts are historical • may have been badly audited • do not give an accurate picture of the health of a business • there may be ‘window dressing’ – to present accounts in a favourable light • the quantitative accounts may reveal little of important qualitative trends and developments • are not good for predicting the future • Accept any other valid response. Sound explanation of one limitation or partial explanation of two limitations Partial explanation of one limitation or a list of two limitations. 1 No creditable content. 0

Mark scheme

5(a) Analyse the advantages for a business of a Just in Time (JIT) system 8 of inventory management. Level 4 – Good analysis of the advantages of a Just in Time (JIT) system of inventory management. 7–8 Level 3 – Some analysis of the advantages of a Just in Time (JIT) system of inventory management. 5–6 Level 2 – Some explanation/application of the advantages of a Just in Time (JIT) system of inventory management. 3–4 Level 1 – Understanding of JIT. 1–2 Level 0 – No creditable content. 0 Answers could include: Knowledge and understanding • Clear understanding of JIT Application • Reference to a relevant business context, e.g. business use of JIT Analysis • JIT – avoids holding high levels of inventory – requires supplies to arrive just as needed • Manufacturing likely to require significant amount of supplies and flow production very dependent on regular and timely supplies • JIT system, if effective, will reduce capital investment in stock – opportunity for alternative capital investment • Cost of storage reduced – warehouses reduced/eliminated • JIT adds value by increasing efficiency – costs are lowered by intelligent working that eliminates waste • A JIT model allows a manufacturer a better level of control over the entire manufacturing process • Workers can focus on primary tasks – manufacturing rather than stocking material • JIT makes the entire workflow of a manufacturing company more efficient • Accept any other valid response. 5(b) Discuss the importance of operational flexibility and innovation to a 12 multinational car manufacturer. Level 4 – Effective evaluation of the importance of operational flexibility and innovation to a multinational car manufacturer. 9–12 Level 3 – Limited evaluation of the importance of operational flexibility/ innovation to a multinational car manufacturer. 7–8 Level 2 – Application and analysis of the importance of operational flexibility/innovation to a business. 3–6 Level 1 – Knowledge and understanding of operational flexibility/ innovation/multinational car manufacturer. 1–2 Level 0 – No creditable content. 0 Answers could include: Knowledge and understanding • Clear understanding of operational flexibility • Clear understanding of innovation • Clear understanding of multinational car manufacturer Application • Reference to the relevant business context of a multinational car manufacturer Analysis Operational flexibility is the ability of a manufacturer to vary the level of production and range of products in response to consumer demands. • Flexibility may be required on the production line in respect of the volume and delivery time of specific models of cars • The different demands of different countries/cultures require a flexible and informed management and workers • The research and development and design processes prior to car production must also be flexible and innovative • Process innovation might well be the result of a flexible, learning, operational system • An efficient inventory control system requires significant flexibility in workflow/patterns of working Operational innovation is the use of new or improved production processes – a learning environment. • Innovative/creative thinking in the R&D section of a manufacturing company can lead to the use of more cost-effective/sustainable components • Car manufacturing is a very competitive business – flexible and innovative working in all aspects of manufacturing may well create a USP, competitive advantage and/or a distinctive brand image • Without flexibility and innovation, a car manufacturer may become separated from the dynamism of market demands and become unresponsive 5(b) Evaluation A candidate may make a judgement/conclusion as to the importance of operational flexibility and innovation to a multinational car manufacturer. These judgements/conclusions may be made at any point in the essay as well as in a concluding section. • A judgement may be made that flexibility and innovation are important for a car manufacturer in order for it to survive in a very competitive market • A conclusion could be that the importance depends upon the country in which the car manufacturer is operating • A judgement might be made that cars now contain so many innovative functions that the opportunity for innovation is very limited as everyone is doing it • Flexibility and innovation are not confined to the production process – how important is it in relation to other business functions such as marketing and finance? • Accept any other valid response.

Mark scheme

6 ‘The economic man theory used by Taylor is the best way to motivate 20 the employees of a customer service call centre business.’ Discuss the extent to which you agree with this view. Level 5 – Effective evaluation of the extent to which the candidate agrees with the view that the economic man theory used by Taylor is the best way to motivate the employees of a customer service call centre business. 17–20 Level 4 – Limited evaluation and good analysis of the extent to which the candidate agrees with the view that the economic man theory used by Taylor is the best way to motivate the employees of a customer service call centre business. 13–16 Level 3 – Analysis of the view that the economic man theory used by Taylor is the best way to motivate the employees of a customer service call centre business. 11–12 Level 2 – Limited analysis, with application, of the extent to which the candidate agrees with the view that the economic man theory used by Taylor is the best way to motivate the employees of a business. 5–10 Level 1 – Knowledge and understanding of Taylor’s economic man theory/employee motivation/customer service/call centre business. 1–4 Level 0 – No creditable content. 0 6 Answers could include: Knowledge and understanding • Clear understanding of Taylor’s economic man theory • Clear understanding of employee motivation • Clear understanding of customer service • Clear understanding of call centre business Application • Reference to the relevant business context – a customer service call centre business Analysis • Description and analysis of Taylor’s economic man theory – pay works on the basis of results – workers are motivated by money alone – extra money is the motivator • Implied select right staff, observe and record performance, devise best methods of work and establish piecework payment systems • Analysis of this theory and various methods that may be used to motivate employees • Analysis of alternative notions of motivation such as Mayo, Maslow, Herzberg, McClelland, Vroom, etc. • Application of Taylor’s and/or alternative motivation theories to the context of a customer care call centre business – pressure to retain, sell and gain business Evaluation A candidate may make a judgement/conclusion as to the extent to which they agree with the view that the economic man theory used by Taylor is the best way to motivate the employees of a customer service call centre business. These judgements/conclusions may be made at any point in the essay as well as in a concluding section. • Evaluative comments about the weight of evidence supporting the proposition in the question • Evaluation of the appropriateness of Taylor’s theory in context – a sole motivator – or a combination with other theories, e.g. Maslow, Herzberg – importance of, for example, hygiene factors • Do workers have a range of needs of which money is only one? • An attempt to make a judgement in relation to Taylor’s economic man being the best way to motivate employees in a customer service call centre • Accept any other valid response.

Mark scheme

7(a) Analyse how break-even analysis might help an entrepreneur to make 8 decisions about starting a new business. Level 4 – Good analysis of how break-even analysis might help an entrepreneur to make decisions about starting a new business. 7–8 Level 3 – Some analysis of how break-even analysis might help an entrepreneur to make decisions about starting a new business. 5–6 Level 2 – Some application of how break-even analysis might help an entrepreneur to make decisions about starting a new business. 3–4 Level 1 – Knowledge and understanding of break-even analysis/ entrepreneur/new business. 1–2 Level 0 – No creditable content. 0 Answers could include: Knowledge and understanding • Clear understanding of break-even analysis • Clear understanding of an entrepreneur • Clear understanding of a new business Application • Reference to a relevant business context: an entrepreneur starting a new business Analysis • Entrepreneurs strive to establish businesses through innovation and risk • In order to succeed, entrepreneurs must minimise risk of failure through effective planning and research before launching a business • Break-even analysis (formula) helps an entrepreneur determine the sales quantity (volume) of a product that must be sold to generate enough revenue to pay costs over a given period of time – this information will allow an entrepreneur to avoid incurring losses • It allows an entrepreneur to estimate how much profit can be earned at different sales levels – this helps to set sales targets that will achieve desired profit levels • Setting the right price for a product is a major decision to be made – setting different price levels and evaluating break-even analysis allows an entrepreneur to review the effect of that price on the profitability of the business – will allow an entrepreneur to study the effect of each price level in relation to other factors such as price competition and consumer affordability • After studying break-even analysis, an entrepreneur can set inventory management levels – prepare initial inventory stock and plan a schedule of re-stocking based on cash flow • Break-even analysis and information can better inform an entrepreneur of the need to reduce costs, such as fixed costs, in order to achieve a lower break-even point for quicker profitability • Accept any other valid response. 7(b) Discuss the possible challenges for an entrepreneur in starting a new 12 business selling only vegetarian food products. Level 4 – Effective evaluation of the possible challenges for an entrepreneur in starting a new business selling only vegetarian food products. 9–12 Level 3 – Limited evaluation of the possible challenges for an entrepreneur in starting a new business selling only vegetarian food products. 7–8 Level 2 – Application and analysis of the possible challenges for an entrepreneur in starting a new business selling only vegetarian food products. 3–6 Level 1 – Knowledge and understanding of entrepreneur/new business/ vegetarian food products. 1–2 Level 0 – No creditable content. 0 7(b) Answers could include: Knowledge and understanding • Clear understanding of entrepreneur • Clear understanding of new business • Clear understanding of vegetarian food products Application • Reference to the relevant business context: an entrepreneur starting a business selling vegetarian food products Analysis • Vegetarian lifestyles offer a growing market for entrepreneurs – vegetarian demand has increased at a significant rate • ‘It is one of the biggest health trends of our time’ – endless opportunities – major food producers are changing recipes • For many consumers, it is now a diet of choice • There may be long-term risks in focusing on food products that may be part of a current trend • Medical effects of eating only vegetarian food products yet to be fully explored – may mean less nutrition, more fat and lower protein – high risk products • Economies of scale not yet enjoyed • High (higher) price of vegetarian foods may limit the market/growth potential • Challenge of targeting the market as a new business in the market • If the market continues to grow and is sustained, then competition will likely enter and depress specific businesses Evaluation A candidate may make a judgement/conclusion as to the possible challenges for an entrepreneur in starting a new business selling only vegetarian food products. These judgements/conclusions may be made at any point in the essay as well as in a concluding section. • Attempt to make a judgement as to the significance of the challenges faced in this entrepreneurial business context – short/long-term issues • Evaluative comment and weighing of potential advantages and disadvantages of this entrepreneurial business context • Significant entrepreneurial opportunities, but risks are relatively high – selling products subject to inadequate medical research and evidence could lead to factors outside the control of entrepreneurs; short-term – opportunities, long-term – uncertainty • How might the challenges facing an entrepreneur vary in different cultures and countries/regions/areas? • Accept any other valid response.