Business 9609/42 October/November 2025: question paper and mark scheme

Mark scheme

1 Evaluate the effectiveness of KK’s operations strategy between 2020 and 2024. 20 Responses may include: AO1 Knowledge and understanding of operational strategy Knowledge (max 1 mark) can be awarded for knowledge about operations strategy, can be awarded for understanding of the operations strategy up to two marks including: • Operational decisions – Influence of other functional areas – HRM, marketing and finance on operations strategy. – The changing role of IT and AI – use in planning and delivering operational strategy. • Flexibility and innovation – Need for flexibility in terms of volume, delivery and lead times and specification of products. – Process innovation in terms of changing current processes or adopting new ways of producing products. • ERP – Main features of an ERP programme, including: integration in current and new processes, automation and the use of IT and AI, analysis of data to support ERP, reporting of data, tracking of data and inventory, embedding accounting processes and financial management of ERP. – Improvements from ERP; efficiency, inventory control, costing and pricing, capacity utilisation, change management, workforce planning and flexibility and data control. • Lean production – Kaizen - a concept referring to continuous improvement of a business and involves all employees. Kaizen can be applied to all aspects of a business and looks to make incremental changes. – Quality circles- groups/teams of workers who do the same or similar work, who meet regularly to identify, analyse and solve work-related problems. – (Simultaneous engineering) - a work process where tasks can be run in parallel to one another. (Award only – no ) – Cell production – making a team or ‘cell’ of workers responsible for the production of a product. – (JIT manufacturing – just in time production,) is the opposite of producing goods and supplying customers from stock, JIT processes focus on producing exactly the amount you need at exactly the time your customer needs it. (Award only – no ) – Waste management – reducing any unnecessary steps in a manufacturing process that does not benefit the customer, therefore, the customer does not want to pay for it. The elimination of waste from a manufacturing process. – Lean production - a production method aimed primarily at reducing waste within the production system as well as response times from suppliers and to customers. 1 • Operations planning – The need for planning operations within the business – quantitative and qualitative. – (Network diagrams) (Award only – no ) and critical path analysis interpreting and understanding network diagrams, identifying the critical path, minimum project time, total and free float, change within a network diagram. – The benefits of CPA, including; improved project management, identification of critical tasks in project management, communication inside and external to a business, determination of project length to allow better planning and functional decision making, scheduling, control of costs, improved allocation of human resources, minimised downtime. Operations strategy involves lean production . Some basic knowledge about operations strategy, so only K. Operations strategy involves lean production . This could include Kaizen . 1 K for identification and 1 DEV for a point of explanation Operations strategy involves lean production . This could include Kaizen . 1 K for identification and 2 DEVs for Which is involving everyone in making continuous improvement in their jobs 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 + ) No other AO2, AO3 OR AO4 marks can be awarded without AO1. AO2 Application Application (max 2 marks) can be awarded for applying knowledge, analysis or evaluation of operations strategy to KK, including: • Primary sector business • Kelp farming has a low environmental impact. • KK has been trading for five years prior to 2020 • KK is labour intensive • KK is a social enterprise • Kelp refinery creating a pulp used in biodegradable plastic – starts in 2020 1 • 2020 – use of Appendix 1 – critical path analysis • 2021 – use of Appendix 2 – just in time • 2021 – worker representatives meet with management – poor motivation at farm • 2021 – Exterior construction is one month early • 2022 – refinery training starts six months late • 2022 – skills shortages in country W • 2022 – use of Appendix 3 – interview with MD • 2022 – sales of kelp increase by 200% • 2022 – lead time for customer orders increases from one week to one month • 2023 – new refinery opened • 2023 – kelp farm production now processed in refinery • 2023 – refinery operating at 40% capacity • 2024 – KK imports kelp for use in refinery AO3 Analysis Analysis is likely to be based on how effective elements of KK’s operations strategy has been ( and and ) , including: • Operational decisions – improve decision making within the business reducing the time needed for decision making and avoiding poor decision making, reducing costs – increasing profitability. • Flexibility and innovation – dynamic environment so the business can adapt to changes and is more likely to retain and increase customer base – increasing sales and profit. • ERP – improving efficiency and reducing costs – increased profitability. • Kaizen – the ability to make continuous changes and improvement to efficiency could lead to lower costs for KK – leading to improved profitability. • Quality circles- by working in teams, workers can become more experienced and proficient at their given tasks, which may increase productivity – decreasing costs. • Simultaneous engineering – the ability to reduce the time needed to complete a project may allow the business to complete the project quicker – able to operate sooner and make sales. • Cell production – workers can support each other and reduce the time needed to produce – increase profitability. • JIT manufacturing – reduce stock holding costs – however may increase lead times. • Waste management – reduce costs from excess time and wasted inventory – increase profitability. • Operations planning – better resource control allowing for reduced costs – increased profitability. 1 Candidates’ analysis must be business facing. They may identify an element of operations strategy and provide developed analysis to get to L2, this then needs to be counterbalanced to get to L3. If a candidate does this twice, they will gain 8 marks. AO4 Evaluation Evaluation ( and and ) .Evaluation will largely depend on the points raised in the analysis. Candidates MUST answer the question – how effective was KK’s operations strategy between 2020 and 2024. The development and support of this judgement will help them to move through L2 and L3. To award L3 the answer must be in context and draw upon the previous analysis. • A judgement over the effectiveness of each element of the operations strategy. • A judgement over the most/least effective element of KK’s operations strategy between 2020 and 2024. • A judgement over the other elements KK could have used in its operations strategy between 2020 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 overall effectiveness of the operations strategy used by KK between 2020 and 2024. 1 No credit L1 including: L2 including: (developed L3 (developed supporting (limited supporting supporting evidence) evidence with context) evidence) JIT has helped JIT has helped KK’s JIT has helped KK’s operation’s JIT has helped KK’s operation’s KK’s operations operation’s strategy as strategy as costs are lower strategy as costs are lower because strategy. costs are lower. because of the need for less of the need for less processing. This processing. will help with the overall aim of having zero waste. The operations KK’s operations have not KK’s operations have not improved KK’s operations have not improved have not improved as they are not as they are not working at full as they are not working at full improved working at full capacity. capacity. And customers are now capacity. Only 40% of the capacity waiting longer for their orders is being used. And customers are now waiting longer for their orders, increasing from a week to a month Accept all valid responses.

Mark scheme

2 Advise KK on the likely impact of the new government’s policies on its future business strategies. 20 AO1 Knowledge and understanding of government policies and strategic management Knowledge (max 1 mark) can be awarded for any relevant business knowledge about government policy or how it works OR knowledge of business strategy, including: • Government policies are rules and regulations that affect how businesses are run in the economy. • Government policies help the government to meets its objectives in running the economy. • (Any policy) will help to increase demand in the economy (Award only) • (Any policy) will help to increase productivity in the business (Award only) • (Grants/trade barriers) will help reduce costs to the business (Award only) • (Min Wage/University educated workforce) will increase the costs of the business. (Award only) • Definition of inflation – General rise in price. • Definition of government grant (Award only) • (Monetary policy to stabilise inflation no K mark for this see below) – the use of interest rates by a central bank to affect the money supply and aggregate demand. • Fiscal policy - the use of government revenue collection and expenditure (taxation) to influence a country's economy. If successful will change aggregate demand (AD) in the economy. • Supply side policy - attempts to increase productivity and increase efficiency in the economy. If successful, they will shift aggregate supply (AS) to the right and enable higher economic growth in the long -run. • Exchange rate policy - how a country manages its currency in respect to foreign currencies and the foreign exchange market. The exchange rate is the rate at which the domestic currency can be converted into a foreign currency. • Strategic management – the process of strategic analysis, strategic choice and strategic implementation to achieve the objectives of the business. Award for any explanation of a policy that affects a business’ strategy, up to a max of 2 marks. 2 Fiscal policy . Some basic knowledge about government policy, so only K. Fiscal policy , is collecting and using taxes in the economy. . 1 K for identification and 1 DEV for a point of explanation Fiscal policy , is collecting and using taxes in the economy , this may 1 K for identification and 2 DEVs change the level of aggregate demand in the economy. . 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 + ). Monetary policy cannot be awarded for knowledge as it is stated in the case study but knowledge of how monetary policy works can be awarded. No other AO2, AO3 OR AO4 marks can be awarded without AO1. AO2 Application Application (max 2 marks) can be awarded for applying knowledge, analysis or evaluation of a government policy and its impact on KK between 2020 and 2024. Candidates MUST apply this to KK’s business model – a lot of this will come from the appendices • Use of monetary policy to stabilise inflation • Government grants to support carbon efficient businesses • Minimum wage to be increased by 40% by 2028 • Reform of country W’s education system, including government funded university tuition • Elimination of trade barriers for primary sector businesses • Primary sector business • Kelp has a low impact on the environment • KK has been trading for five years prior to 2020 • KK is labour intensive • KK is a social enterprise • Kelp refinery creating a pulp used in biodegradable plastic – starts in 2020 2 • 2025 – new government in country W • Any element of the case study • Any element of the appendices AO3 Analysis Analysis is likely to be based on the impact of the policies on KK’s strategy ( and and ) , including: • Monetary policy – if interest rates fall then this may mean any borrowings that KK have are at a lower cost – increasing profitability. May also have an effect on customers (B2B) costs and their ability to afford KK’s prices. • Fiscal policy – government grants may decrease costs – leading to higher profitability. Alternatively increased costs from higher taxation rates may increase costs and reduce profitability. • Supply side policy – likely to reduce the skills gaps in country W – however likely to take time which may not help KK soon. • Exchange rate policy – may decrease cost of importing raw materials – reducing costs and increasing profitability. Candidates may choose to contrast two or more of these policies, but they must analyse the policy in the context of its impact on KK’s strategy, and not just be an analysis of the policy on its own. Candidates need to identify a policy and provide developed analysis to get to L2, this then needs to be counterbalanced to get to L3. If a candidate does this twice, they will gain 8 marks. AO4 Evaluation Evaluation ( and and ) including: Evaluation will largely depend on the points raised in the analysis. Candidates MUST answer the question – what is the likely impact on the KK’s strategy? The development and support of this judgement will help them to move through L2 and L3. 2 To award L3 the answer must be in context and draw upon the previous analysis. • A judgement over the impact of individual government policies on KK. • A judgement over the overall impact of the combined government policies on KK. • A judgement over the most positive/negative impacts of the government policies on KK. • What the judgement(s) may depend upon; the dynamism of the external environment, competition in the market, the international economic outlook, the reactions of customers to KK’s refined products etc. • Weighing up of the likely ability of KK to survive in light of the government policies. No credit L1 including: L2 including: (developed L3 (developed supporting evidence (limited supporting evidence) with context) supporting evidence) Supply side Supply side Supply side policies will help KK’s Supply side policies will help KK’s business policies will policies will help business as they may receive as they may receive grants from the help KK. KK’s business as grants from the government. This government. This is more likely with the new they may receive will reduce the costs and help processing factory and its new technology. grants from the increase production level unlike Therefore, costs will reduce and this helps government. increases in interest rates. increase production levels unlike increases in interest rates. Accept all valid responses.