Mark Scheme

- Mark Scheme /
Question Answer Marks AO Element Notes Guidance
1 Identify two ways a business can 2 Only award the first two
grow. responses given.
Award 1 mark per way (max 2).

Points might include:
• Takeover
• Merger
• Develop new products
• Enter new markets
• Increasing sales (of existing
products) / open more
locations
• Franchising
Other appropriate responses should
be credited.
- Mark Scheme /
2 Identify two ways a government 2 Only award the first two

might support business start-ups. responses given.
Do not award:
Vague answers such as
Points might include: cover costs, providecash
/ money / invest /
• Offer financial support or
sponsor
examples such as grants /
/ incentives
(low-cost) loans
• Provide training
• Provide information / advice
/ support/mentors
• Provide low-cost / rent-free
property / location
• Offer lower tax rates / tax
breaks / tax relief
• Encourage universities to
make research facilities
available
• Organise business fairs.
- Mark Scheme /
3 Identify two ways a business plan 2 Only award the first two
can help a business to reduce risk. answers given.

• 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)
also be credited.
- Mark Scheme /
4 Identify two possible causes of 2 Only award the first two

business failure. responses given.
Award 1 mark for each relevant
cause (max 2).
Causes may include:
• Poor planning/lack of
objectives
• Cash flow problems / lack of
working capital
• Poor management skills / lack
experience / lack of
knowledge
• Overexpansion / business
expands too quickly
• Lack of demand/sales / (too
much) competition
• Poor marketing
• Economic influences /
changes in business
environment
Other appropriate response should
also be credited.
- Mark Scheme /
5 Identify two limitations of using 2 Only award the first two

the number of employees to responses given.
measure the size of a business.
Award 1 mark per limitation.

Points could include:
• Does not account for capital
intensive business / depends
on method of production used
• Could have many part-time

employees
• May give a different indicator
of size to other measures
used.
also be credited.
- Mark Scheme /
6 Define ‘entrepreneur’. 2 For both marks must

have idea of a person
Award 2 marks for a full definition. starting a new
Award 1 mark for a partial business,
definition. and that they take a risk
A person who takes the risk for a to do this [+1].
new business venture [2]
OR
An individual who takes the
financial risk of starting and
managing a new business [2]
Partial definition e.g. person who
starts up a business [1]
- Mark Scheme /
7 Identify four reasons why a new 4 Only award the first four
business might be at greater risk points given.
of failure than an established
business.
reason (max 4).
• Lack of / cannot get finance /
cash flow problems / lack of
liquidity
• Level of competition / lack
customer loyalty / lack of
customers / demand /sales
• Poor planning / no business
plan / lack of objectives
• Lack of (managerial/business)
experience/skills/knowledge
• Inadequate/no market research
• No reputation / low brand

awareness / no brand image

also be credited.
- Mark Scheme /
8 Do you think being a risk-taker 6 This is a general

question
is a more important characteristic so there are no marks
for
of a successful entrepreneur than application.
being creative? Justify your
answer. For evaluation to be
awarded justification will
Award up to 2 marks for usually follow on from
identification of relevant points. relevant analysis of
points.
Award up to 2 marks for relevant
development of points.
Award 2 marks for a justified
decision as to whether being a
risk-taker is a more important
characteristic of a successful
entrepreneur than being creative.
Risk-taker:
• A successful entrepreneur
must take risks otherwise there
is no business [k]
• Entrepreneurs take the risk of
investing their own money [k]
this may bring high rewards
[an] however they may fail
and lose their personal
possessions [an]
• Taking risks is a way to learn
[k] if an idea is good or not
[an]
Creative:
- Mark Scheme /
• New ideas [k] leading to

increased sales/revenue [an]
• Creativity adds value [k] so
higher prices can be charged
[an].
• Creativity alone does not
guarantee success [k] if
customers do not purchase
[an]
also be credited.
Justification might include:
Entrepreneurs take the risk of
investing their own money [k] this
may bring high rewards [an]. Being
creative maybe a more important
characteristic as making a business
different to its competitors [k] can
lead to increased sales [an]. In a
competitive market creativity is
especially important because it
helps the business stand out from
competitors. [eval] An entrepreneur
can take risks, but if customers will
not buy, they will not be successful.
[eval]
- Mark Scheme /
9 Do you think offering financial 6 This is a general question

help, such as grants, is the best so there are no marks for
way for a government to support application.
business start-ups? Justify your
answer. For evaluation to be
awarded justification will
Award up to 2 marks for usually follow on from
identification of relevant points. relevant analysis of
points.
decision as to whether offering
financial help, such as grants, is the
best way for a government to
support business start-ups.
Financial support/grants:
• Needs funds to buy assets [k]
without which it cannot
operate [an]
• Start-up business is likely to
have access to fewer sources
of finance [k]
Other options might include:
• Information / support / advice
/ mentors [k] as a new
entrepreneur may lack
experience (of running a
business) [an] so helps
them
make better decisions /
fewer
mistakes [an]
- Mark Scheme /
• Interest free / low cost loans

[k] which will reduce cash
outflows [an]
• Lower taxes [k] so lower costs
[an]
• Free/low cost training
schemes [k]
• Low rent areas [k]
Other appropriate answers should
also be credited.
A start-up business needs to have
enough money to pay creditors [k]
as without it could lead to cash flow
problems [an]. Another way is to
provide a mentor [k] as a new
entrepreneur may not have
experience of running a business
[an]. I think financial help is better
due to the limited sources of finance
available and banks may be less
willing to take the risk of lending
money to a start-up business [eval]
and without this there is no business
[eval].
- Mark Scheme /
10 Identify two possible reasons why 2 Only award the first two
an owner might want their responses given.
business to remain small.
Award 1 mark per reason (max
2).
• Access/availability/lack of
capital (to expand)
• Personal preference / owners
choice
• Size of the market
• Type of industry / need to
maintain close employee /
customers relationships
also be credited.
- Mark Scheme /
11 Explain two ways having a 6 To use words from the

business plan could help Nancy. stem as application the
reference must be
appropriate (i.e. make
Award 1 mark for identification of
sense) in relation to the
each relevant way (max 2).
point being made.
Award 1 mark
The following words are
for each
likely to be appropriate
relevant
for this question:
reference to this
business (max
2).
Award 1 mark • Book (shop) • Market
for each research • Break-even
relevant chart/margin of safety •
explanation (Suitable) location •
(max 2). E-commerce •
New/start-up business •
Points might
include: Entrepreneur
• Help get a Other appropriate

bank examples in context can
loan/finance [k] still be credited.
for her book
shop [app] as
lender
can see that the
business is able
to
repay [an] •
Provide targets /
sense
of purpose /
direction / focus
[k] for
her new
business [app]
as can see
what she needs
to do to achieve
her
aims [an] • Help
decision-
making
[k] such as
whether to use
e-commerce
[app] so does
not
waste
time/money on
the wrong
target
market/products
[an] • Act as
a checklist/way
to monitor
progress
[k] for this
entrepreneur
[app] •
Help set
budgets [k] to
help
calculate her
margin of safety
[app]
• Help organise
resources /
labour
requirements /
marketing
strategy
[k]
- Mark Scheme /
also be credited.
12 Identify two ways a government 2 Only award the first two

can support new business responses
startups.
Award 1 mark per way.

• Offer grants • Loans for small
businesses • Low tax rates / tax
relief / tax breaks • Offer advice /
support / information / mentors •
Provide (free / low-cost) training •
Low cost / rent-free premises •
Organise business fairs
also be credited.
- Mark Scheme /
13 Do you think a successful 6 This is a general question

entrepreneur has to be a good so there are no marks for
manager? Justify your answer. application.
Award up to 2 marks for
identification of relevant points.
Award 2 marks for justified
decision as to whether a successful
entrepreneur has to be a good
manager.
Entrepreneur:
• Must be creative / innovate /
provide new / unique ideas [k] to
help gain sales / attract customers
[an] • Need to be willing to take
risks [k] to benefit from the reward
/ profit generated from the business
[an] • Perseverance / determination
[k] as will need to be prepared to
keep going when faced with
problems / issues that any new
business is likely to have [an] • Can
hire someone to manage the
business (if you don’t possess these
skills) [k] but this will cost money
[an] Manager: • Need to be able to
organise operations [k] so able to
get supplies / deliver on time to get
repeat orders [an] • Must be able to
- Mark Scheme /
plan [k] so production runs

efficiently [an] • Ability to control
employees [k] so they are all on
task [an] • Help motivate employees
[k] to maintain efficiency / reduce
absenteeism / ensure retain
employees [an] •Activities must be
coordinated [k] so time is not
wasted [an] • An ineffective
manager can make the wrong
decisions [k] which will cost money
/ damage reputation [an]
also be credited.
An entrepreneur is someone willing
to take risks [k] to benefit from the
profit made by the business. [an]
Being a good manager is important
as planning is needed [k] so that
production runs efficiently [an].
However, I think a successful
entrepreneur does not have to be a
good manager because they can
always recruit someone if they
cannot do this role [eval], and
without taking the initial risk there
is no business to manage. [eval]
- Mark Scheme /
14 2 Only award the first

Identifytworeasonswhyagovernmentmightsupportbusin two responses given.
ess
activity.
Award 1 mark per reason. Points
might include:
• Create jobs
• Increase competition / develop
a market
• Increase output / economic
growth/GDP
• Benefitsociety(smal)businessescangrowintolarge/important
ones in the future
• Generate new ideas
• Can produce (a future
source of) tax revenue
Otherappropriateresponsesshouldalsobecredited.
- Mark Scheme /
15 Do you think the number of 6 This is a general question

employees is the best way to so there are no marks for
measure the size of a tertiary application.
sector business? Justify your
answer. Do not award profit as a
measure of size.
identification of relevant points.
decision as to whether the number
of employees is the best way to
measure the size of a tertiary sector
business.
Employees:
• Some businesses make use of a
lot of technology/equipment [k]
so
it does not need as many
workers
[an] • Some businesses may
have a
lot of part-time workers [k]
which
can be difficult to compare
businesses [an] • Simple/easy to
calculate [k]
Other points might include:
• Value of sales / revenue / output
[k] as high value can suggest many
customers [an] resulting in higher
revenue [an] • Capital employed [k]
but some types of business may
- Mark Scheme /
have a high level of non-current

assets / technology / shops whereas
others do not [an] • Number of
outlets/branches [k] but could be
(in area of) low demand [an] •
Market share [k] • Number of
customers/services [k]
also be credited.
Using employees may not be a good
measure as some businesses make
use of a lot of technology [k] so it
does not need as many workers.
[an] A better way is value of sales
[k] which can suggest a business
has many customers [an]. I think
value of sales is the better measure,
as all businesses will have sales
revenue [eval] whereas the number
of employees can depend on the
type of tertiary sector business.
[eval]
- Mark Scheme /
16 Define ‘ business plan ‘.

2 For one mark must have
idea of outlinesbusiness
Award 2 marks for a full definition.
objectives/goals. The
second markcan outline
why it is used,
Award 1 mark for a partial
definition. information itcontains or
other relevant
A document containing the business development.
aims/objectives and important
detailsabout the operations, finance
and owners of a business [2]
OR A detailed written document
outlining the purpose and aim of a
businesswhich is often used to
persuade lenders or investors to
finance a businessproposal [2]
OR States aims and/or objectives
and shows how business plans to
achievethem [
2]Partial definition e.g. A document
stating the aims of the business
[1]
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17 Identify two ways of measuring 2 Only award the first two

the size of a business. responses given.
Award 1 mark per way [max 2].
Points might include
• (Value of) capital employed
• Market share
• Value of output / value of sales /
revenue
• Number of employees
• Value of business
• Number of customers / volumes
of output / number of services
also be credited.
- Mark Scheme /
18 Do you think a takeover of a 6 This is a general question

competitor is the best way for a so there are no marks for
large business to grow? Justify application.
your answer.
Candidates can discuss
Award up to two marks for other ways a business can
identification of relevant points. grow but evaluation must
focus on the question set.
Award up to two marks for relevant
For both evaluation
Award up to two marks for justified
marks judgement must
decision as to whether the takeover clearly relate to a large
of a competitor is the best way for
business.
a large business to grow.
Do not award mirror
answers.
• Possible economies of scale [k]
leading to lower average costs [an]
• Reduced / less competition /

increase market share [k] so able to
increase prices / revenue [an]
• Access to new skills / expertise
[k] • (Bad reputation as) may need
to make some workers redundant /
negative impact on employee
motivation / job insecurity [k]
lowering productivity [an]
• High cost [k] which the business
might not have / be able to afford
[an]
• Possible clash of management
styles / different objectives [k]
- Mark Scheme /
• Diseconomies of scale e.g.

communication problems [k]
leading to higher average costs [an]
Other ways to grow can also be
discussed such as:
• Expand product range [k] which
can help better control / manage
speed of change [an]
• Merger [k]
• Joint venture [k]
also be credited.
19 Define ‘entrepreneur’. 2 Do not award answers

such as managing a
Award 2 marks for a full definition.
business or identifies
Award 1 mark for a partial
skills of an entrepreneur
definition.
on its own as this does
A person who organises, operates not define the term.
and takes the risk for a new
For both marks, need
business venture [2]
idea of starting a business
An individual who takes the and takes (financial) risks
financial risk of starting and to do so.
managing a new business [2]
Partial definition e.g. a person who
starts/sets up a business [1]
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20 Outline one 4 Note: To use

advantage and words from
one the stem as
disadvantage application,
to KTF of the reference
taking must be
over the other appropriate (i.e.
business. make
sense) in
Award 1 mark
relation to the
for each
point being
advantage/
made.
disadvantage.
Award 1 mark
for each
relevant
for this question:
reference to this
business.
Points might
include:
Advantages: • Building
materials/cement and
• Reduces competition/increased bricks • $25bn • Started
market share [k] as this is one of its 60years ago • Main
main competitors [app] • Possible competitors • Combined
economies of scale [k] reducing the sales of $40bn/raise of
unit costs of bricks [app] • Possible $15bn • Business cycle •
cost savings [k] which could be one Interest rates • Legal
of its objectives [app] • Buying an controls • Protecting the
existing brand can be cheaper than environment •
internal growth [k] • Access to new Stakeholder groups
skills or expertise [k].
Other appropriate
Disadvantages:
examples in context can
still be credited.
• Clash of culture and leadership
styles/objectives [k] for a business
started 60 years ago [app] •
Possible
legal action (as gain too much
market power) [k] so could face
the
risk of new legal controls to
protect
environment [app] • Possible
diseconomies of scale or examples
e.g. control/ communication
problems [k] • Over reliant on one
market [k] especially when enter
- Mark Scheme /
different stages of business cycle

[app] • Pressure groups could
oppose [k] • Cost of redundancies
[k] • Expensive to buy the firm [k].

also be credited.
- Mark Scheme /
21 Do you think being creative is the 6

most important characteristic of
being a successful entrepreneur?
Justify your answer.
identification of relevant issues.
decision as to whether being
creative is the most important
characteristic of being a successful
entrepreneur.
Creative:
• New/unique ideas [k] to help gain
sales/attract customers/maintain
customer loyalty [an] • Can open
up new opportunities [k] •
Customers may not like the
products [k]
Other characteristics include:
• Risk taker [k] as needs to be able
to make decisions that might fail
[an] otherwise will not know
whether an idea is good or not [an]
• Perseverance/determination [k] as
will need to be prepared to keep
going when faced with
problems/issues that any new
- Mark Scheme /
business is likely to have [an] •

Effective communicator [k] as will
need to convince to supplies/finance
providers/customers to provide
supplies/finance/buy goods
otherwise business will not succeed
[an] • Good
decision-maker/management skills
[k] as increases in costs/or
reduction prices charged by rivals
will require a response from the
business [an] otherwise sales/profits
may fall [an] • Hard-working [k]
as
must be ready to do everything
themselves [an] • Optimistic [k] •
Self-confident [k] • Independent
[k]
also be credited.
Being creative can result in ideas
that make a business stand out
from
its competitors [k] leading to
increased sales [an]. But it is also
important to be a risk taker [k] as
they need to be willing to make
decisions that might fail [an].
Creativity is important but not the
most important characteristic. A
creative but risk averse
entrepreneur
may miss the opportunity to be
first
to market [eval] so losing the
chance to gain a competitive
- Mark Scheme /
advantage so reducing their chances

of success. [eval]
- Mark Scheme /
22 Do you think entering a growing 6

market where there is a lot of
competition is the best way for a
business to expand? Justify your
answer.
identification of relevant issues.
decision as to whether entering a
market where there is a lot of
competition is the best way for a
business to expand.
• Shows high potential
demand/many potential customers
[k] could lead to an increase in
revenue [an] • Have to do
something different to make your
product ‘stand out’/ customers
may
be brand loyal to other
businesses/
more choice [k] leading to
higher/lower sales [an] leading to
higher/lower revenue [an] •
Allow
the business to spread risk [k] •
Difficult to charge high
prices/may
have to set lower prices (than
competitors) [k] lowering the
profit
margin/so difficult to break-even
[an] • (Additional) costs of
promotion/market research [k]
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leading to higher expenses [an] •

Makes the business be more
efficient [k] to reduce average costs
[an]
Other options might include:
• Develop new products [k] •
Expand in existing market [k] •
Find new market with low/no
competition [k] provides chance for
monopoly (as no competition) [an]
• Take over a competitor [k] so gain
their market share [an]
also be credited.
A growing market shows high
potential demand [k] so possible to
earn enough revenue to recover
costs [an]. However, if there is a
lot
of competition then it might be
difficult to charge high prices [k]
and this might lower the profit
margin [an] which could make it
difficult to recover the cost of
developing new products [an]. It
will depend on how good its
product is because if customers are
interested in what the business is
offering, they may be prepared to
buy it despite the competition so in
this situation it is worth the risk as
they would be able to gain market
- Mark Scheme /
share to justify the costs of

expansion.[eval] [eval]
23 Identify two reasons why a 2 Only award the first two

business might want to expand. responses given.
Award 1 mark per reason. Points

might include:
• Increase sales/sales revenue •
Increase profit • Return to
shareholders • Spread risk •
Increase reputation/brand
image/prestige • Increase customer
base/target new markets • Increase
market share • Economies of scale

also be credited.
- Mark Scheme /
24 Explain how two external 6 Note: To use words from

stakeholder groups might be the stem as application,
affected by the takeover. the reference must be
appropriate (i.e. make
sense) in relation to the
stakeholder group.
point being made.
reference to this business.
Award 1 mark for each relevant for this question:
explanation. • Building
Points might include: materials/cement and
bricks • manufacturing •
• Banks [k] may have increased $25bn • Started 60years
demand for loans [an] to pay for ago • Main competitors •
taking over its main competitor Combined sales of $40bn
[app] • Government [k] as may • Business cycle • Interest
receive more tax revenue [an] if rates • Legal controls •
KTF can increase its $40bn sales Protecting the
[app] • [Local] community [k] may environment
be concerned about possible job
losses [an] • Suppliers [k] could Other appropriate
lead to fewer / increased orders [an] examples in context
can
for building materials [app] • still be credited.
Pressure groups [k] • Consumers Do not award answers
[k] as may lead to less choice [an]
which refer to internal
• Competitors [k] as they will be stakeholders such as:
concerned about possible price owners (shareholders),
drops due to the economies of scale
employees.
gained [an]
also be credited.
- Mark Scheme /
25 Outline two reasons why a bank 4

might want Kara to produce a
business plan before agreeing to
give a loan.
reason.
reference to this business.
• Supports request for
finance/shows ability to repay [k]
increasing chance of getting
finance
for her candle business [app] •
Shows planning/thought seriously
about issues [k] such as
recognising
that cash-flow is a problem [app]
•
Provide (important) information
about business [k] such as
demand
is increasing [app] • Shows what
security/assets the business has
which can be used to support any
loan [k]
also be credited.
Note: The focus of the question is
from the viewpoint of the bank and
not the business.
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26 Identify two reasons why a 2

government might support
business startups.
Award 1 mark per reason.

• reduce unemployment • increase
competition • increase output •
benefit society • small businesses
can grow Other appropriate
responses should also be credited.
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27 Explain four reasons why a 8

person may set up their own
business.
Award one mark for each relevant
reason (maximum of four).
Relevant reasons might include:
• Made redundant – need to provide
an income as lost job
• To be own boss – independence
from instructions from
others/employer
• Able to decide how to spend time
– flexible working hours/choose
when to take time off
• To make a profit – as may receive
a higher income than working for
another business
• Gap in the market identified/able
to put own ideas into practice/can
make use of personal skills and
interests/be creative/ethical
principles
• To gain recognition and status –
to become well known and
respected
Award a maximum of one
additional mark for each
explanation. For example:
Redundancy means loss of job (1)
so setting up a business replaces the
- Mark Scheme /
income which was lost (1).

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28 Identify and explain two

factors 6
Application marks may
Samira should consider before
be awarded for
starting a delivery service.
appropriate use of the
following:
Knowledge [2 × 1] – award 1
mark
for each relevant factor
• franchise
Application [2 × 1] – award 1 • takeaway
mark
for each relevant reference made • (fried) food
to
this business
• 2 OR part time workers
Analysis [2 × 1] – award 1 mark
for
each relevant explanation
• increased competition
Relevant points might include:
• Cost OR finance OR examples,
e.g. have to buy/hire vehicle for • revenue fell
deliveries [k] of takeaways [app] as • successful business
may not be able to afford it [an]
• lower prices
• Labour issues, e.g. access to
workers [k] as she only has 2 part • market research OR
secondary research OR
time employees [app] would they
focus group
be willing or able to do the extra
work [an] • correct use of data from
table, e.g. 200 OR 300
• Demand issues, e.g. as are there
customers
enough customers interested in the
service [k] from her market Note: can accept two
research [app] otherwise may not different costs if they are
generate sufficient extra revenue clearly different and
[an]
explained
• Does she have
capacity/space/equipment to
provide for the new service [k]
• Actions of competitors, e.g. how
- Mark Scheme /
many competitors offer this service

[k] as already facing increased
competition from the franchise
[app]
29 Identify and explain two possible 4 Application marks may

reasons why VXH has grown be awarded for
quickly. appropriate use of the
following:
Knowledge [2 × 1] – award 1 mark
for each reason identified • fruit or related words
e.g. flavours
Application [2 × 1] – award 1 mark
for each explanation in context • soft drinks
Points might include: • batch production
• Closure / takeover of competitor • specialisation
[k] so fewer businesses making soft
• factory
drinks [app]
• 40 OR 80
• Changes in customer tastes /
(workers)/motivation
fashion [k]
problems
• Spotted a new opportunity in the
market [k] • job rotation or financial
bonus
• Change in legal controls / rules
[k] • 2 years
• Span of control
• Introduction of new technology
(increased)
[k] so able to take advantage of
specialisation [app]
• Increase in productivity [k]
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30 Identify two possible reasons why 2 (TV) State of economy

Ben’s business has remained
small.
Award 1 mark per possible reason

• personal wishes / owners
objectives • size of market / niche
• lack of finance • avoid
diseconomies of scale /
communication issues /
co-ordination issues
- Mark Scheme /
31 Recommend the most suitable 6 Application marks may

way for GDC to expand its be awarded for
business to another country. appropriate use of the
Justify your answer. following:
Knowledge [1] competitive market,
– award 1 mark correct use of numbers,
for business customers, good
identification of reputation, delivery,
relevant points parcels, many levels of
(s) hierarchy, long chain of
command, delivery
vehicles, economies of
Application [1]
– award 1 mark scale, logistics
for
relevant
reference made
to this
business
Analysis [2] –
award up to 2
marks
for relevant
development of
point(s)
Note: Do not award
Evaluation [2] award up to two marketing methods e.g.
marks for justified decision regards e-commerce or hiring an
to the most suitable way for GDC agent.
to expand.
Relevant points might include:
• Joint venture [k] with a local
delivery business [app] you share
the risks of expansion [an]
• Merger/takeover [k] they will
benefit from local expertise [an]
• Franchise [k] they will receive a
license fee [an]
• Set up own operations [k] they
will keep control [an] however this
is an expensive way [an]
- Mark Scheme /
32 What is meant by ‘business 2 Do not award answers

plan’? that explain why it is
used e.g. support loan
Clear understanding [2] e.g. a
applications
document containing the business
aims/objectives and important
details about the operations, finance
and owners of a business
OR states aim and/or objectives
and shows how business aims to
achieve them
Some understanding [1] states one
element of plan e.g. shows
marketing strategy OR production
costs
- Mark Scheme /
33 Identify and explain two ways the 4 Application marks may

Government might help HGH be awarded for
become more competitive. appropriate use of the
Knowledge [2 × 1] – award 1 mark following:
for each relevant way [max 2] • correct use of data from
Application [2 × 1] – award 1 mark the table
for each explanation in context • trade union membership
• labour productivity
Reasons might include:
• rent
• Import quotas [k] to limit number
• engines
of engines [app]
• quality assurance
• Import tariffs [k] as it is facing
• (high) energy costs
increased competition from imports
• 30% decrease in profit
[app]
• factory
• Reduce rent OR rates [k] so easier
• increased competition
to pay high energy costs [app]
OR competition from
• Change legal controls OR
imports
examples such as lower minimum
wage or quality standards [k] so
rivals have to think about quality
assurance [app]
• Offer grants OR subsidies OR
cheap finance OR loans [k] so can
update machinery OR operations in
its factories [app]
• Offer advice [k]
• Provide training [k]
• Lower tax [k]
• Provide infrastructure e.g. build
more roads [k]
- Mark Scheme /
34 Identify two ways to measure the 2

size of a business.
Knowledge [2 × 1]: award 1 mark
per measure.
Points might include: • Value of
sales OR value of output OR
revenue • Market share • Number
of employees • Value of capital
employed OR value of balance
sheet Do not accept profit or
answers that refer to number of
sales/ output, outlets
35 Identify two possible reasons why 2 Accept any reasonable

the owners of a business might answer
want it to expand.
Knowledge [2 × 1] award 1 mark
per reason
Points might include • Spread risk
• Increase sales revenue • Increase
profits • Increase customer base •
Increase market share • Prestige/
reputation • Personal goal •
Economies of scale
- Mark Scheme /
36(a) Identify two parts (other than 2 Note: Accept any piece
marketing) of a business plan. of information that would
be included in a business
Knowledge [2 ×1] award one mark
plan that is NOT
per part
marketing.
Points might include: cash flow
forecast, location, human resources
plan, production details, business
aims
- Mark Scheme /
37(a) Identify and explain two ways in 4 Application: recession,

which the size of the business may overdraft $6 m, large /
benefit Dowson. big, electrical goods,
shops, larger range of
Knowledge [2 × 1] – award 1 mark
goods. Use of figures
for each relevant advantage
from table.
Application [2 × 1] – award 1 mark
for each relevant explanation in Accept: Economies of
context of Dowson scale [K] if no specific
Relevant points might include: examples given.
• Able to attract better employees
[k] so have the expertise to survive
the recession [app]
• Access to finance [k] as seen as
lower risk of failing [app]
• Discounts for bulk buying [k] so
able to charge lower prices for
electrical goods [app]
• Marketing economies or bigger
marketing budget [k] as able to
justify national advertising [app]
• Spread risk [k] as can afford to
stock a wide range of products
[app]
• Able to dominate the market /
large market share [k] so difficult
for small retailers to compete
[app]
- Mark Scheme /

size of a business.
Knowledge [2 × 1] award one mark
per way
Points might include: • Sales
value
OR value of output OR revenue, •
Market share • Capital
employed/value of balance sheet •
Number of employees

size of a business.
Knowledge [2 × 1] award one mark
per way
Points might include: • Sales
value
OR value of output OR revenue, •
Market share • Capital
employed/value of balance sheet •
Number of employees
- Mark Scheme /
40 Do you think that customers will 6 For decision, either

benefit from the takeover? Justify viewpoint is acceptable.
your answer. Application marks may
be awarded for
Knowledge [1] – award 1 mark for
appropriate use of the
identification of relevant issue(s)
following: use of
[max 1].
numbers, market share,
Application [1] – award 1 mark if references to holidays
relevant reference made to this and associated words
business. such as activities, skiing,
specialist, mass market.
Analysis [2] – award up to 2 marks
for relevant development of
point(s).
Evaluation [2] – justified decision
made as to whether customers will
benefit from the takeover. Relevant
points might include:
• Impact on prices e.g. Lower prices
[k] due to cost savings [app] so able
to afford to take/have more holidays
[an] OR so might see prices remain
the same/rise [k] as fewer
alternatives to pick from [an] •
More variety [k] as now offers
activity holidays as well [app] so
easier to find exactly what they
want [an] • Close shops [k] so have
to spend more time/travel further
[an] for specialist advice [app] •
Impact on service e.g. Loss of
personal service [k] as business
looks to cut costs [app].
- Mark Scheme /
[Total: 146]

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- Mark Scheme /

Question Answer Marks AO Element Notes Guidance

Award 1 mark per way (max 2).

Question Answer Marks AO Element Notes Guidance

2 Identify two ways a government 2 Only award the ﬁrst two

Question Answer Marks AO Element Notes Guidance

Award 1 mark per way (max 2).

Question Answer Marks AO Element Notes Guidance

4 Identify two possible causes of 2 Only award the ﬁrst two

Question Answer Marks AO Element Notes Guidance

5 Identify two limitations of using 2 Only award the ﬁrst two

Award 1 mark per limitation.

• Could have many part-time

Question Answer Marks AO Element Notes Guidance

6 Deﬁne ‘entrepreneur’. 2 For both marks must

Question Answer Marks AO Element Notes Guidance

• Inadequate/no market research

• No reputation / low brand

Other appropriate responses should

Question Answer Marks AO Element Notes Guidance

8 Do you think being a risk-taker 6 This is a general

Question Answer Marks AO Element Notes Guidance

• New ideas [k] leading to

Question Answer Marks AO Element Notes Guidance

9 Do you think offering ﬁnancial 6 This is a general question

Question Answer Marks AO Element Notes Guidance

• Interest free / low cost loans

Question Answer Marks AO Element Notes Guidance

Question Answer Marks AO Element Notes Guidance

11 Explain two ways having a 6 To use words from the

• Help get a Other appropriate

Question Answer Marks AO Element Notes Guidance

12 Identify two ways a government 2 Only award the ﬁrst two

Award 1 mark per way.

Question Answer Marks AO Element Notes Guidance

13 Do you think a successful 6 This is a general question

Question Answer Marks AO Element Notes Guidance

plan [k] so production runs

Question Answer Marks AO Element Notes Guidance

14 2 Only award the ﬁrst

Question Answer Marks AO Element Notes Guidance

15 Do you think the number of 6 This is a general question

Question Answer Marks AO Element Notes Guidance

have a high level of non-current

Question Answer Marks AO Element Notes Guidance

16 Deﬁne ‘ business plan ‘.

Question Answer Marks AO Element Notes Guidance

17 Identify two ways of measuring 2 Only award the ﬁrst two

Question Answer Marks AO Element Notes Guidance

18 Do you think a takeover of a 6 This is a general question

• Reduced / less competition /

Question Answer Marks AO Element Notes Guidance

• Diseconomies of scale e.g.

19 Deﬁne ‘entrepreneur’. 2 Do not award answers

Question Answer Marks AO Element Notes Guidance

20 Outline one 4 Note: To use

Question Answer Marks AO Element Notes Guidance

different stages of business cycle

Other appropriate responses should