Edexcel GCSE Business - Presdales School

Edexcel GCSEBusiness

Mark SchemePaper 2a

Building a business

MARK SCHEME

Page 2 Edexcel GCSE Business Mark Scheme Paper 2a

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Mark schemeSection AQuestionNumber

Answer Mark

1 (a) A (1)AO1a

QuestionNumber

Answer Mark

1 (b) C (1)AO1a

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Answer Mark

1 (c) Award 1 mark for identification of an impact, plus 2 further marks for explaining this impact up to a total of 3 marks.

Productivity can be increased (1) as technology can speed up the production process (1) therefore reducing the unit cost of making an item (1).

Quality can be improved (1) because technology can ensure all products are made to the same standard with no mistakes (1) which means increased customer satisfaction (1).

Accept any other appropriate response. Answers that list more than one impact with no explanation will be awarded a maximum of 1 mark.

(3)AO1a = 1AO1b = 2

QuestionNumber

Answer Mark

1 (d) Award 1 mark for identification of an impact, plus 2 further marks for explaining this impact up to a total of 3 marks.

It may result in a business changing the raw materials used in the production of its products (1) as pressure groups may have identified they cause environmental damage (1) which could lead to the business experiencing a rise in product design costs (1).

The business may change its promotion, for example a TV advertisement (1), because it is seen as offensive to specific groups of consumers (1). This would lead to a significant increase in the business’s costs (1).


(3)AO1a = 1AO1b = 2

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Edexcel GCSE Business Mark Scheme Paper 2a Page 3

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Answer Mark

2 (a) A, B (2)AO1a

QuestionNumber

Answer Mark

2 (b) C, E (2)AO1a

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Answer Mark

2 (d) Award 1 mark for identification of an advantage, plus 2 further marks for explaining this advantage up to a total of 3 marks.

New training needs can be identified (1) such as an employee’s lack of skill when using new technology (1) which can therefore be addressed through the provision of training which would lead to an increase in employee productivity (1).

Employees will feel more motivated and valued discussing their performance (1) which means the business will likely retain staff for longer (1) meaning recruitment costs do not increase (1).

Accept any other appropriate response. Answers that list more than one advantage with no explanation will be awarded a maximum of 1 mark.

(3)AO1a = 1AO1b = 2

QuestionNumber

Answer Additional guidance Mark

2 (c) Substitution into correct formula:

Net profit margin = £24,900 x 100 (1) £450,600

Answer: 5.53% (1)

Award full marks for correct numerical answer without working.

Do not accept any other answer

(2)AO2


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QuestionNumber

Answer Mark

2 (e) Award 1 mark for identification of an impact, plus 2 further marks for explaining this impact up to a total of 3 marks.

UK businesses will experience increased competition from overseas imports (1) which means sales may be lost as these goods may be cheaper (1) leading to lower profits (1).

UK businesses will be able to locate overseas to access global markets more easily (1) which would reduce the costs of transporting products abroad (1) and therefore increase profits (1).


(3)AO1a = 1AO1b = 2

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Answer Mark

3 (a) A (1)AO1a

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Answer Mark

3 (c) Award 1 mark for identification of a reason, plus 2 further marks for explaining this reason up to a total of 3 marks.

It will enable a business to charge a higher price (1) because customers may be prepared to pay more for a product which is different to that of its competitors (1) which means profit can be increased (1).

It will enable a business to create brand loyalty with its customers (1) which means repeat business (1) resulting in increased sales (1).

Accept any other appropriate response. Answers that list more than one reason with no explanation will be awarded a maximum of 1 mark.

(3)AO1a = 1AO1b = 2

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3 (b) Substitution into correct formula:

£35,000,000 x 0.45 (1)

Answer: £15,750,000 (2)


Do not accept any other answer.

(2)AO2

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QuestionNumber

Answer Mark

3 (d) Award 1 mark for identification of a benefit, plus 2 further marks for explaining this benefit up to a total of 3 marks.

Costs of the business can be reduced (1) because there is less need for expensive office space (1) which can lead to an increase in profits (1).

It may lead to a more motivated workforce (1), because it allows staff more flexibility in their working lives to fit around other commitments (1) which may increase productivity and efficiency (1).

Accept any other appropriate response. Answers that list more than one benefit with no explanation will be awarded a maximum of 1 mark.

(3)AO1a = 1AO1b = 2

QuestionNumber

Indicative content Mark

3 (e) h Helps to retain employees (AO1b).

h Productivity increases (AO1b).

h This prevents an increase in recruitment costs, which helps maintain profit levels (AO3a).

h This leads to increased levels of efficiency and profitability of the business due to the fixed costs of the business being spread across more units lowering unit costs (AO3a).

(6)A01b = 3A03a = 3

Level Mark Descriptor

0 No rewardable material

Level 1 1-2 h Demonstrate elements of knowledge and understanding of business concepts and issues, with limited business terminology used (AO1b).

h Attempts to deconstruct business information and/or issues, finding limited connections between points (A03a).

Level 2 3-4 h Demonstrates mostly accurate knowledge and understanding of business concepts and issues, including appropriate use of business terminology in places (AO1b).

h Deconstructs business information and/or issues, finding interconnected points with chains of reasoning, although there may be some logical inconsistencies (A03a).

Level 3 5-6 h Demonstrates accurate knowledge and understanding of business concepts and issues throughout, including appropriate use of business terminology (AO1b).

h Deconstructs business information and/or issues, finding detailed interconnected points with logical chains of reasoning (A03a).


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QuestionNumber

Answer Mark

4 (a) Award up to 2 marks for linked points outlining one suitable benefit to Hi-Tech of its choice of suppliers. Award a maximum of 1 mark if points are not linked.

By choosing the same reliable suppliers, Hi-Tech can ensure consistency in quality that its customers demand (1) therefore increasing customer satisfaction levels and repeat business (1).

The use of reliable suppliers enables Hi-Tech to guarantee on time delivery to its customers (1) which is very important when the business operates in a highly competitive market (1).

Do not accept benefits of the choice of suppliers that would not be appropriate for a manufacturer of metal panels such as Hi-Tech.

(2)AO2

Section B

QuestionNumber


4 (b) h Quality control is less expensive than quality assurance because quality is inspected at the end of the production process rather than throughout (AO2).

h Quality control ensures defective products do not get to the customer because it inspects products at the end of the production process to make sure they meet the required quality standards (AO2).

h This means the cost of managing quality is lower thus ensuring the businessremains profitable and successful which it is at this moment in time (AO3a).

h This means customers will be satisfied because they receive products of the required quality that have been checked by specialist quality control inspectors rather than employees on the production line, who may not treat quality as important as they have other tasks to complete. Hi-Tech’s customers are therefore more likely to make repeat purchases which will maintain or even increase the company’s sales and profit levels resulting in continued business success (AO3a).

(6)AO2 = 3AO3a = 3

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Level 1 1-2 h Limited application of knowledge and understanding of business concepts and issues to the business context (AO2).

h Attempts to deconstruct business information and/or issues, finding limited connections between points (AO3a).

Level 2 3-4 h Sound application of knowledge and understanding of business concepts and issues to the business context although there may be some inconsistencies (AO2).

h Deconstructs business information and/or issues, finding interconnected points with chains of reasoning, although there may be some logical inconsistencies (AO3a).

Level 3 5-6 h Detailed application of knowledge and understanding of business concepts and issues to the business context throughout (AO2).

h Deconstructs business information and/or issues, finding detailed interconnected points with logical chains of reasoning (AO3a).

QuestionNumber


5 (a) £200,000 Do not reward a mark if the correct unit (£) is not given.

(1)AO2

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5 (c) Substitution into the correct formula:£800,000 - £600,000 (1)

Answer: £200,000 (1)


(2)AO2

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Answer Mark

5 (b) Vehicle (1)AO1a


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QuestionNumber


5 (d) h Hi-Tech can achieve a competitive advantage through providing consistent levels of quality panels which will increase customer satisfaction levels (AO2).

h Customers are more likely to make a repeat purchase if they receive good customer service from Hi-Tech employees who are highly experienced (AO2).

h This means the business can beat its competitors, in what is a very competitive market, increase its sales and ultimately profit (AO3a).

h This will result in an increase in sales volume, as customers will prefer to choose Hi-Tech over one of the many competitors that exist in the market, as they will trust the advice given regarding the highly technical products the company produces. This will lead to an increase in sales revenue and ultimately profit (AO3a).

(6)AO2=3 AO3a=3









QuestionNumber

Answer Mark

6(a) Award 1 mark for stating one barrier to communication which Hi-Tech might face.

Technical language, due to the specialist nature of Hi-Tech’s products, may cause confusion (1).

Too many e-mails making it hard for employees to prioritise workload (1).

Accept any other appropriate response. Do not accept reasons that would not be appropriate for Hi-Tech.

(1)AO2

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QuestionNumber

Answer Mark

6(b) Award up to 2 marks for linked points outlining a benefit to Hi-Tech from using job rotation. Award a maximum of 1 mark if points are not linked.

Job rotation can improve employee productivity (1) as working on just one area of the production line may be monotonous and boring due to the amount of technology being used in the production process (1).

This would lead to an increase in motivation levels amongst the workforce (1) resulting in fewer mistakes and higher standards of quality, which is important as Hi-Tech’s customers demand the very best in manufactured products (1).

Accept any other appropriate response. Do not accept benefits that would not be appropriate for a manufacturer such as Hi-Tech.

(2)AO2

QuestionNumber


6(c) h Expanding by finding new markets overseas will be easier to manage and control than a takeover for Hi-Tech (AO2).

h A takeover will enable Hi-Tech to meet its growth objectives more quickly because the overseas business is established and already has a market and customers for its products (AO2).

h This is because internal expansion would be slow and steady, and be paid for largely from the firm’s profits. This would lower the risk of expansion and enable Hi-Tech to continue to trade successfully and profitably which would satisfy the objectives of the shareholders (AO3a).

h This means that Hi-Tech’s expansion is more likely to be successful as the overseas business has established customers and understands the culture and language of the country that Hi-Tech is expanding into resulting in less risk compared to the company going alone (AO3a).

h This most appropriate option for Hi-Tech might be expanding overseas because slower organic growth is easier to manage. There are only 30 employees working at Hi-Tech at present and therefore despite being successful and profitable, the business is still small in terms of the number of staff employed. As a result, Hi-Tech would need to be careful that it did not grow too quickly and become inefficient. Organic growth would allow expansion at the company’s own pace which would therefore increase the chances of it being successful (AO3b).

h Although a takeover might be a more expensive option, it may be the most appropriate option given that Hi-Tech is a profitable business and therefore could potentially fund the takeover using this internal source of finance, particularly as the business that is under review is a small overseas manufacturer. A takeover would enable Hi-Tech to grow quickly and easily and enable the business to achieve its growth objective whilst reducing the risk associated with expanding overseas, particularly as Hi-Tech has no experience of trading outside of the UK at present and therefore may need the expertise of the takeover business to succeed with expansion abroad (AO3b).

(9)AO2=3AO3a=3AO3b=3


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h Makes a judgement, providing a simple justification based on limited evaluation of business information and issues relevant to the choice made (AO3b).



h Makes a judgement, providing a justification based on sound evaluation of business information and issues relevant to the choice made (AO3b).


h Deconstructs business information and/or issues finding detailed interconnected points with logical chains of reasoning (AO3a).

h Makes a judgement, providing a clear justification based on a thorough evaluation of business information and issues relevant to the choice made (AO3b).

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QuestionNumber

Answer Mark

7 (a) Award 1 mark for a correct definition of public limited company.

A type of business ownership where shares are traded on a recognised stock exchange (1).

(1)AO1a

Section C

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Answer Mark

7 (b) 69,800,000 passengers (1)AO2

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Answer Mark

7 (c) Award up to 2 marks for linked points outlining one reason why easyJet use e-commerce to sell tickets to customers. Award a maximum of 1 mark if points are not linked.

It is more convenient for customers to choose flights from the comfort of their own home and discuss flight details with family and friends (1). This means easyJet will experience an increase in sales (1).

E-commerce enables easyJet to be price competitive (1) as travel agents will not be involved in the sales process who would need to make a profit as well as easyJet (1).

Do not accept reasons that would not be appropriate for an airline such as easyJet.

(2)AO2

QuestionNumber


7 (d) h Targeting customers with higher incomes will mean easyJet can charge higher prices for its flights (AO2).

h Flying to more destinations will increase the number of seats for sale resulting in an increase in demand and therefore sales revenue (AO2).

h This is because customers with higher incomes will be able to pay higher prices which will increase the sales revenue per flight sold (AO3a)

h This is because flying to more destinations will give customers more choice and opportunity to fly with easyJet which will help the company compete with rivals such as Ryanair to increase sales (AO3a).

(9)AO2=3AO3a=3


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QuestionNumber


7 (d)Cont.

h The most appropriate strategy for easyJet is to fly to more destinations. This is because if the company offers a wider choice of places to travel to it will spread the risk of flying to a smaller number of destinations which may reduce in popularity over time particularly if a country becomes unstable or dangerous to travel to for example Turkey has experienced problems in the past. This will give the company the best chance of increasing its revenue as the more choice given to customers the more demand the business should experience resulting in higher sales (AO3b).

h Targeting customers with higher incomes will be difficult for easyJet given that the company has an image of being a budget airline. This is because passengers with higher incomes may not want to fly with a discount airline which charges for extras such as food and leg room which means sales revenue is unlikely to increase (AO3b).

AO3b=3





h Makes a judgement, providing a simple justification based on limited evaluation of business information and issues relevant to the choice made (AO3b).

Level 2 4-6 h Sound application of knowledge and understanding of business concepts and issues related to the business context although there may be some inconsistencies (AO2).

h Deconstructs business information and/or issues finding interconnected points with chains of reasoning, although there may be some logical inconsistencies (AO3a).

h Makes a judgement, providing a justification based on sound evaluation of business information and issues relevant to the choice made (AO3b).



h Makes a judgement, providing a clear justification based on a thorough evaluation of business information and issues relevant to the choice made (AO3b).

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QuestionNumber


7 (e) h Environmental considerations can increase the costs of a business (AO1b).

h Environmental considerations can actually improve the image of the business (AO1b).

h This is because easyJet need to continually update its aircraft so that they are modern and fuel efficient thus reducing the company’s environmental impact (AO2).

h This is because consumers will see that the airline is concerned about the environment and sustainability, which can enhance their image and provide a source of competitive advantage, particularly as people today are increasingly aware of environmental issues and how their individual actions can affect the environment (AO2).

h The increase in costs will reduce the profit made per customer unless easyJet decided to raise its prices in order to overcome this increase. Raising its prices however could result in a loss of customers choosing to fly with easyJet, due to customer expectations that cheap prices should be charged by a budget airline. This would therefore lead to a reduction in sales revenue and also a fall in profit (AO3a).

h This means consumers may be more likely to choose easyJet over rivals such as Ryanair which would benefit the company as demand would increase for seats on easyJet’s flights, increasing sales and profits (AO3a).

h EasyJet operate in a very competitive market and have to compete with budget airlines such as Ryanair. Therefore, anything that increases easyJet’s costs is unlikely to benefit the company as it limits its ability to compete, which means sales and profits could actually fall (AO3b).

h However, given easyJet operate in the budget airline markets, which is based on offering low prices, it is unlikely that consumers would choose easyJet over rivals simply because of its environmental considerations and objectives. This means the company is less likely to benefit from these considerations compared to charging lower prices than rivals for example (AO3b).

(12)AO1b=3AO2=3AO3a=3AO3b=3



Level 1 1-4 h Demonstrates elements of knowledge and understanding of business concepts and issues, with limited business terminology used (AO1b).

h Limited application of knowledge and understanding of business concepts and issues related to the business context (AO2).

h Attempts to deconstruct business information and/or issues finding limited connections between the points (AO3a).

h Draws a conclusion, supported by generic assertions from limited evaluation of business information and issues (AO3b).


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Level 2 5-8 h Demonstrates mostly accurate knowledge and understanding of business concepts and issues, including appropriate use of business terminology in places (AO1b).

h Sound application of knowledge and understanding of business concepts and issues to the business context although there may be some inconsistencies (AO2).


h Draws a conclusion based on sound evaluation of business information and issues (AO3b).

Level 3 9-12 h Demonstrates accurate knowledge and understanding of business concepts and issues throughout, including appropriate use of business terminology (AO1b).

h Detailed application of knowledge and understanding of business concepts and issues to the business context throughout (AO2).


h Draws a valid and well-reasoned conclusion based on a thorough evaluation of business information and issues (AO3b).

Documents

Edexcel GCSE Business - Presdales School