Business Studies · May / June 2023 · Paper 12 · Question 2

0450

As printed in the paper

The question as text

Gloria is a sole trader. Her business provides house-cleaning services. Gloria uses telephone calls to communicate with her 4 employees. She wants to expand the business by offering a repair 2 service. Gloria plans to carry out some market research. She has been told producing a business plan can help to reduce risk. Gloria would also like to reduce her workload and is considering taking on a business partner.

Read automatically from the paper; the printed page above is exact.

Show the answer and mark scheme

2(a)[2]
Identify two ways a business plan can help a business to reduce risk. Award 1 mark per way (max 2). Points might include:
Help secure funding/attract investors
Can show whether/when extra finance needed/help budgeting
Help set goals/objectives/provide sense of direction
Help monitor/check/track progress
Test feasibility of idea/identify demand
Help set (suitable) prices
Understand level/type of competition
Help identify skills/employees needed
Help allocate resources (appropriately) Other appropriate responses should also be credited. 2 Only award the first two answers given. Notes
2(b)[2]
Identify two possible reasons why a business might want to expand. Award 1 mark per reason (max 2). Points might include:
Increase sales/revenue
Increase profit
Widen customer base/target new markets
Increase market share
Increase reputation/more prestige/status
Increase output
Spread risk/diversify
Gain economies of scale Other appropriate responses should also be credited. 2 Only award the first two answers given. Notes
2(c)[4]
Outline one advantage and one disadvantage to Gloria of using telephone calls as a method of communication with her employees. Award 1 mark for identification of each relevant advantage/disadvantage (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include: Advantages:
Instant/quick to contact [k] her 4 employees [app]
Opportunity to get immediate feedback [k] about cleaning jobs [app]
Can talk to employees who are anywhere/elsewhere [k]
Can leave a message/voice note [k] Disadvantages:
Technical problems e.g. no internet/signal [k] so will not help reduce her workload [app]
No hard copy/nothing to refer to [k]
Receiver may not answer the phone/might be busy when call [k]
Not face to face/no body language [k]
May only be able to speak to one person at a time [k]
Cannot show data/chart over a phone [k]
Cost [k] Other appropriate responses should also be credited. 4 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate on this question:
(House) cleaning
4 employees
Sole trader
Can help share her workload Other appropriate examples can be credited. Notes
2(d)[6]
Explain two factors Gloria should consider when deciding whether to take on a business partner. Award 1 mark for identification of each relevant factor (max 2). Award 1 mark for each relevant reference to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include:
Have to share responsibilities/management/control [k] of the cleaning business [app] which could lead to conflict [an]
Offer skills (or examples of) [k] which could lead to business opportunities [an] such as the repair service [app]
May offer experience/expertise/knowledge [k] increasing efficiency [an] to help reduce the workload [app]
Access to finance/capital [k] so can grow faster/upgrade equipment [an] making it easier to expand [app]
Different objectives/ways of working [k] which could lead to slower decision-making/conflict [an]
Whether want to share decision-making/take longer to make decisions [k] but may lead to better decisions [an]
Someone to share risk/losses/costs [k]
Whether wants/have to share any profit [k] compared to staying as a sole trader [app] Other appropriate responses should also be credited. 6 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
(House) cleaning
Expand/repair service
4 employees
Effective communication is important
Reduce her workload
Sole trader
Market research Other appropriate examples can be credited. Takes time to make decisions is [k] or [an] but do not award the same point twice. Reduce workload can be [k], [app] or [an] but only award once. Conflict/argument is [an] only. Notes
2(e)[6]
Explain two methods of primary market research a business could use to find out the demand for a new product or service. Which would be the best method to use? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for a justified decision as to which is the best method of primary market research for a small business to use to find out the demand for a new product or service. (Postal) questionnaire/survey [k] – apply to either method:
Customer opinions/preferences/suggestions can be gathered [an]
Large amounts of information can be collected [an]
Detailed information can be gathered [an]
Allows many people to be asked (the same questions) [an]
Questions may be poorly worded/difficult to phrase questions properly/people interpret questions in a different way [an]
People may not tell the truth/say what they think sounds good [an]
Customers may not complete/return the questionnaires [an]
May have to pay someone with the right skills to design the questionnaire properly [an] which increases the cost [an] Online survey [k] – additional specific points
Data can be quickly presented/analysed using IT tools [an]
Fast/quicker response time (than other forms of survey) [an]
Cheaper than interviews/postal questionnaire/focus group etc. [an]
No representative needed to carry it out [an] (Postal) questionnaire/survey [k] – additional specific points
Carrying out questionnaire takes time/money [an]
Analysing results takes time [an] 6 This is a general question so there are no marks for application. Some points could be written as either advantages or disadvantages of different methods but only award once. Some points can be awarded as [k] or [an] but only award once. Notes Interview [k]
Allows for detailed information to be gathered [an]
Can explain questions [an]
Interviewer bias possible (if interviewer is not properly trained) [an]
Expensive [an]
Time consuming to carry out [an] Focus group [k]
Highly detailed responses [an]
Chance to ask follow-up questions [an]
Some group members can influence what others say [an] leading to unreliable results [an]
Can only ask a few people [an]
Expensive [an]
Time consuming [an] Observation [k]:
Seeing what people do can be more accurate than what they say [an]
More expensive (than other methods) [an]
Test marketing/product trials [k]:
Cost of any mistake is limited to a small output [an]
Takes longer for final product to reach main market [an] Other appropriate responses should also be credited. Justification might include: One method is a questionnaire [k] which allows many people to be asked the same questions [an]. Another option is a focus group [k]. This might be better because it could provide highly detailed responses [an]. Although fewer people can be asked, the ability to ask follow-up questions is important especially when offering a new product [eval] so the extra detail could allow the business to make more informed decisions increasing the chances of success [eval]. Notes

Practise this paper →

Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.