Business Studies · Oct / Nov 2023 · Paper 22 · Question 1
0450
As printed in the paper
Show the answer and mark scheme
1(a)[8]
Explain two advantages of using specialisation when producing SSE’s products. Award 1 mark for each relevant advantage (max 2). Award a maximum of 3 additional marks for each explanation of the advantage of using specialisation when producing SSE’s products – one of which must be applied to this context. Relevant advantages might include:
Increases efficiency/productivity – it allows the use of more machinery and technology in the production process – increases output per production employeeTime is saved during the production process – as workers do not need to move around between tasks on the production line – improves the use of space in the factory so can fit in more production lines into the limited spaceHelps keep (unit) costs low – only performing one task makes workers quicker – allowing lower prices to be chargedCheaper to train each employee – as production employees are trained in only one taskIncreased total output produced – potentially increasing sales and revenueLess waste – as keep repeating the same task which may lead to fewer mistakes being madeHigher quality – as workers become more skilled at one particular task For example: Increases efficiency (1)as it allows the increased use of machinery and technology in the production process (1)
so the output of safety helmets can be increased (app). This increases output per production employee (1). Application might include: sport helmets;
bicycle riding;
cricket;
skateboarding;
flow production;
operated successfully for 30 years;
one large factory;
production workers are specialised in one task;
sports safety industry;
different sports.
1(b)[12]
Consider the advantages and disadvantages of the following two methods of market research SSE could use when entering new markets in other countries. Which method of market research should SSE use? Justify your answer.
Primary market researchSecondary market research Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of both methods. Well-justified recommendation. Candidates discussing both methods in detail, in context and with a well-justified recommendation, including why the alternative method was rejected, should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one method. Judgement with some justification / some evaluation of choice made. Candidates discussing at least one method in detail and applying it to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss the methods with little/no explanation. Simple judgement with limited justification / limited evaluation of choice made. Candidates outlining both methods in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Advantages Disadvantages Primary market researchIt is up to date about the different sports that may be popular in other countries – for example cricket helmets may need to be adapted to local stylesAware of current specific customer needs in different countries – it is planned and carried out to gather specific information relevant to sports helmets – will gather the opinions of potential customers and more likely to meet their needsIt will be focused on the specific trends in sports played in these countriesIt will not be available to competitorsMay be biased – particularly if interviewers are not objective when carrying out the interviews – could ask leading questions that influence the answers givenIt can be expensive – especially if using focus groups or interviews – as specialist market research staff will need to be employed to carry out the researchIt may take time to carry out as questionnaires amongst bicycle riders will take time to give out as they may be spread out across a country – the results will need to be gathered and then the results analysed Advantages Disadvantages Secondary market researchOften much cheaper than primary research – because the data on people riding bicycles in that country is already collectedCan be used to help assess the total size of the market for cricket helmets in a country – and would not be available using primary research – so SSE could estimate the likely total demand for their helmets across the new markets in another countrySecondary sources such as newspapers could help SSE assess the economic state of the potential new markets – to see if demand is likely to grow or be static – whether it is worth entering the new market if the economy is not growingIt is usually quicker to gather than primary researchThe data collected on skateboarding may be out of date – therefore it will be of little use to SSE when entering a new market as the data is likely to have changedThe data is available to competitors – so SSE will not gain any advantage over existing competitors in the new marketsThe data will have been gathered for another purpose – it may not fit the needs of SSE research – so it will be of less use and not answer their research needs about the new markets Recommendation Justification could include:SSE should use primary market research as the data gathered will be specific to the new sports helmets in the different countries so SSE will have more accurate data on the potential for sales in the new market and whether it is worth entering that market. Secondary market research is likely to provide data that is out of date and hence will be of little use to SSE in deciding if there is a sufficiently high demand for its products to be worth entering this market.SSE should use secondary market research as it cheaper than primary market research. SSE are considering entering several new markets selling cricket helmets in other countries so the expense of the research in each country will need to be kept low. Secondary market research will provide data much quicker for SSE to decide if the market is worth entering.
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