Article No. 138
9609 Paper-2 (Topical Past Paper with Mark Schemes) (2008-2018) Features: All Variants Mark schemes included Questions order new to old
Editor:
Maham Kabani (Green Hall)
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o Kashif Aziz Green Hall, BSS (Bahria Town), The City School, Pak Turk).
o Asif Iqbal Green Hall, BTS & MUSAB.
o Shahzad Khalid Green Hall UCL, MUSAB, Pak Turk.
o Shameel Khalid Green Hall, LGS (Paragon), LGS (1A1), LGS (JT), BSS (ALGC, ALJT), The City School, BSS, (Newlands), LGS (14C).
o Tayyab Elahi Green Hall, Garrison, KIMS.
o Waqas Hassan Green Hall, LGS Paragon.
o Ahsan Naqvi Green Hall, BSS (Bahria), SISA,NGS, GCC, ALS.
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Title
Business A-Level Paper-2 Topical (Article# 138)
Published by
Read & Write Publications.
Printed by
Read & Write Publications.
Composing Department
Sharjeel Khan, Salman Buksh, Hayat, Shahab, Waqas, M. Awais, Zulfiqar Ali, Usama Farooq
Graphics Department
Rashid Mehmood, Khalid Khursheed
Legal Advisor
Mian Tariq Ahmad (Advocate Supreme Court) Room No. 10, 11, 12 Al-Majeed Centre 1-Mozang Road, Lahore. Tel: 042-37236145, Fax: 042-37241367
Edition:
2019
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Contents UNIT 1: BUSINESS AND ITS ENVIRONMENT ................................................................................... 7 1.1: Enterprise 1.2: Business Structure 1.3: Size of Business 1.4: Business Objectives 1.5: Stakeholders in a Business
7 8 21 24 30
UNIT-2: PEOPLE IN ORGANISATIONS........................................................................................... 36 2.1: Management and leadership 2.2: Motivation 2.3: Human Resource Management
36 39 44
UNIT-3: MARKETING .................................................................................................................. 56 3.1: What is marketing? 3.2: Market Research 3.3: The marketing mix
56 61 67
UNIT-4: OPERATION AND PROJECT MANAGEMENT ..................................................................... 91 4.1: The Nature of Operation 4.2: Operations Planning 4.3: Inventory Management
91 95 102
UNIT-5: FINANCE AND ACCOUNTING ........................................................................................ 107 5.1: Sources of finance 5.2: Costs 5.3: Accounting fundamentals 5.4: Forecasting cash flows and managing working capital
107 115 135 150
DATA RESPONSE-EXTRACTS...................................................................................................... 156 O/N 08/P02/Q1 (Paperclips) O/N 08/P02/Q2 (CC Cosmetics) M/J 08/P02/Q1 (East Farm Wildlife Park) M/J 08/P02/Q2 (Ganmor Cars) O/N 09/P22/Q1 (Phonequip) O/N 09/P22/Q2 (Pedro’s Fish (PF) O/N 09/P21/Q1 (Mediquip) O/N 09/P21/Q2 (Joe’s World) M/J 09/P22/Q1 (Bob’s Band) M/J 09/P22/Q2 (Cheapo Air) M/J 09/P21/Q1 (Jane’s Book) M/J 09/P22/Q2 (Cheapo Air) O/N 10/P22/Q1 (Big Boxes) O/N 10/P22/Q2 (Newtown Hospital) O/N 10/P21/Q1 (Big Bags) O/N 10/P21/Q2 (Newton College) O/N 10/P23/Q1 (Big Bottles) O/N 10/P23/Q2 (Newtown University) M/J 10/P22/Q1 (Sassy Suits) M/J 10/P22/Q2 (Sheep Stew) M/J 10/P21/Q1 (Taylor’s Tables) M/J 10/P21/Q2 (Fruity Surprises) M/J 10/P23/Q1 (Classy Clocks) M/J 10/P23/Q2 (Vegetable Soup) O/N 11/P22/Q1 (Kidz)
156 156 157 158 159 160 160 161 162 162 163 163 164 165 165 166 166 167 168 168 169 169 170 170 171
O/N 11/P22/Q2 (Rex Cinema) O/N 11/P21/Q1 (Now) O/N 11/P21/Q2 (Newtown Arts Centre) O/N 11/P23/Q1 (Suave) O/N 11/P23/Q2 (The Dreambox Theatre) M/J 11/P22/Q1 (Turbo Tractors (TT) M/J 11/P22/Q2 (McQuarry (MQ) M/J 11/P21/Q1 (Loader Lorries (LL)) M/J 11/P21/Q2 (United Coal) M/J 11/P23/Q1 (Quality Coaches (QC) M/J 11/P23/Q2 (Eldorado Gold (EG)) O/N 12/P22/Q1 (BizBank (BB)) O/N 12/P22/Q2 (King Kites (KK)) O/N 12/P21/Q1 (Tiger Skateboards (TS)) O/N 12/P21/Q2 (Bestmove partnership (BM)) O/N 12/P23/Q1 (Fastship (FS)) O/N 12/P23/Q2 (Junior Games (JG)) M/J 12/P22/Q1 (Bright Air Conditioning (BAC)) M/J 12/P22/Q2 (Largetown Football Club (LFC)) M/J 12/P21/Q1 (Advanced Control Systems (ACS)) M/J 12/P21/Q2 (Eagle Golf Club (EGC)) M/J 12/P23/Q1 (Turboprop (TP)) M/J 12/P23/Q2 (Deucetown Sports Club (DSC)) O/N 13/P22/Q1 (Fizzy Drinks (FD)) O/N 13/P22/Q2 (School Sports Shops (SSS)) O/N 13/P21/Q1 (Clare’s Clothes (CC)) O/N 13/P21/Q2 (Freshly Frozen (FF)) O/N 13/P23/Q1 (Charlie’s Chocolates (CC)) O/N 13/P23/Q2 (George’s Gym (GG)) M/J 13/P22/Q1 (Regal Restaurant (RR)) M/J 13/P22/Q2 (Trendy Paints (TP)) M/J 13/P21/Q1 (The Harbour Hotel (HH)) M/J 13/P21/Q2 (Bright Glass (BG)) M/J 13/P23/Q1 (Coffee Paradise (CP)) M/J 13/P23/Q2 (Cando eCables (CeC)) O/N 14/P22/Q1 (Best Bakery (BB)) O/N 14/P22/Q2 (Helping The Children (HTC)) O/N 14/P21/Q1 (Classic Cars (CC)) O/N 14/P21/Q2 (Blooming Flowers (BF)) O/N 14/P23/Q1 (Classic Clothes (CC)) O/N 14/P23/Q2 (Fine Furniture (FF)) M/J 14/P22/Q1 (Let’s Make Music (LM)) M/J 14/P22/Q2 (Great Gifts (GG)) M/J 14/P21/Q1 (Super View (SV)) M/J 14/P21/Q2 (Top Quality Supermarkets (TQ)) M/J 14/P23/Q1 (Pippa’s Shop (PS)) M/J 14/P23/Q2 (Enterprise Energy (EE)) O/N 15/P22/Q1 (Popular Presents (PP)) O/N 15/P22/Q2 (Kitchen Quality Appliances (KQA)) O/N 15/P21/Q1 (Pet Care (PC)) O/N 15/P21/Q2 (Cooper Manufacturing (CM)) O/N 15/P23/Q1 (Classic Cushions (CC)) O/N 15/P23/Q2 (Wonderful Windows (WW)) M/J 15/P22/Q1 (Easy Television (ET)) M/J 15/P22/Q2 (Affordable Builders (AB)) M/J 15/P21/Q1 (Best Books (BB)) M/J 15/P21/Q2 (Tangerine Tablets (TT)) M/J 15/P23/Q1 (Enterprise Electricals (EE)) M/J 15/P23/Q2 (Frank’s Farm (FF)) O/N 16/P22/Q1 (Pampered Pets (PP))
172 172 173 173 174 175 176 177 178 179 180 181 182 182 183 184 185 185 186 187 187 188 189 189 190 191 191 192 193 193 194 194 195 196 196 197 198 198 199 199 200 201 201 202 202 203 204 205 206 206 207 207 208 209 210 210 211 212 213 214
O/N 16/P22/Q2 (Fire Fly Ebooks (FFE)) O/N 16/P21/Q1 (Barbeque House (BH)) O/N 16/P21/Q2 (Software Creations (SC)) O/N 16/P23/Q1 (Exam Success (ES)) O/N 16/P23/Q2 (Yondis Phones (YP)) M/J 16/P22/Q1 (Scented Candles (SC)) M/J 16/P22/Q2 (Mackintosh Shoes (MS)) M/J 16/P21/Q1 (Peterson Manufacturing (PM)) M/J 16/P21/Q2 (Prestige Jewellery (PJ)) M/J 16/P23/Q1 (Sailing Shop (SS)) M/J 16/P23/Q2 (Car Components (CC)) March 16/P22/Q1 (Lovell’s Jewellery (LJ)) March 16/P22/Q2 (Fruit Fusions (FF)) O/N 17/P22/Q1 (Occasion Cards (OC)) O/N 17/P22/Q2 (Nearly New (NN)) O/N 17/P21/Q1 (Rugged Back Packs (RBP)) O/N 17/P21/Q2 (Car Wash (CW)) O/N 17/P23/Q1 (Jones Sticky Labels (JS)) O/N 17/P23/Q2 (Perfik Plumbing (PP)) M/J 17/P22/Q1 (Perfect Pizza (PP)) M/J 17/P22/Q2 (Quality Leather (QL)) M/J 17/P21/Q1 (Magical Mirrors (MM)) M/J 17/P21/Q2 (Security Alarms (SA)) M/J 17/P23/Q1 (Designer Clothing (DC)) M/J 17/P23/Q2 (Budding Gardens (BG)) Mar 17/P22/Q1 (Gourmet Ices (GI)) Mar 17/P22/Q2 (Clean and Tidy (CT)) M/J 18/P22/Q1 (Online Travel (OT)) M/J 18/P22/Q2 (Umpire Umbrellas (UU)) M/J 18/P21/Q1 (Clifford’s Supermarkets (CS)) M/J 18/P21/Q2 (Veg Cans (VC)) M/J 18/P23/Q1 (Delivery To You (DTY)) M/J 18/P23/Q2 (Pencil Pushers (PP)) March 18/P22/Q1 (Paul’s Clothes (PC)) March 18/P22/Q2 (Luxury Carpets (LC))
214 215 216 217 217 218 218 219 220 220 221 222 223 223 224 225 225 226 226 227 228 228 229 230 230 231 232 232 233 234 234 235 236 236 237
Business A-Level P-2 Topical
6 Read & Write Publications
Unit 1: Business and its Environmental
Topics 1.1 Enterprise
BUSINESS AND ITS ENVIRONMENT
A Level Business Topical Paper-2
3-C, Zahoor Elahi Road, Gulberg II, Lahore. Tel: 042-35714038 Cell: 0336-5314141 Web: www.readnwrite.org E-mail: readandwriteoffice@gmail.com
1.2 Business Structure 1.3 Size of Business 1.4 Business Objectives 1.5 Stakeholders in a Business
Business A-Level P-2 Topical
7 Read & Write Publications
Unit 1: Business and its Environmental
Unit 1: Business and its Environment 1.1:
Enterprise
1. O/N 17/P21/Q2/a(ii) Data Response - Car Wash (CW) - See Page 225 (a) (i) Briefly explain the term ‘entrepreneur’ (line 2). [3] Content Someone who takes the financial risk of starting and managing a new venture. Qualities may include in novation, self-motivation, multi-skilled, leadership, confidence, risk taking. Exemplar An entrepreneur takes the risk of starting a business and makes the decisions, An entrepreneur should be confident Someone who makes decisions about the factors of production, takes risks and comes up with creative ideas. 2. M/J 16/P23/Q1/a(ii) Data Response - Sailing Shop (SS) - See Page 220 (a) (i) Briefly explain the term 'business enterprise’ (line 13). [3] `
NB Business enterprise can be explained as an organisation OR as a skill/factor of production. Examples of both are rewardable.
3. O/N 14/P21/Q1/a(ii) Data Response - Classic Cars (CC) - See Page 198 (a) Explain the following terms: (i) Triple bottom line (line 22). [3] The TBL is concerned with the idea that a business should be concerned with making a profit (economic), being fair to its people and society (social) and to have sustainable policies (environmental). Part of a corporate social responsibility strategy. Advantages – in recruitment, in image, in productivity and in profits. 4. O/N 13/P22/Q2/a(ii) Data Response - (School Sports Shops (SSS) - See Page 190 (a) Explain the following terms: (i) Entrepreneurs. [3] Content: People who take risks to start up new businesses. They usually do so in order to take the reward from the enterprise (profit). Usually have an idea and launch it in the market place. They are good at identifying gaps/new opportunities. Example useful. 5. O/N 13/P22/Q2/c Data Response - (School Sports Shops (SSS) - See Page 190 (a) Analyse the advantages to SSS of being a social enterprise. [8] Context likely to come from: A school-based business with any profit re-invested back into the school so students/pupils will benefit (social aspect of triple bottom line) Encouraging entrepreneurship with students running their own businesses may have long term benefits if students continue being entrepreneurs after they leave education (social and economic) Will give the business more chance of success (students, teachers, parents more likely to purchase from SSS). Advantages: Increased chance of success Giving back by reinvesting in school Reputation, image may lead to more sales. Analysis from developing the issues 6. O/N 12/P22/Q1/a(i) BizBank (BB) (a) Explain the following terms: (i) Social enterprise
Data Response - For BizBank (BB) - See Page 181
[3]
Business A-Level P-2 Topical
8 Read & Write Publications
Unit 1: Business and its Environmental
Content: A business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximising returns to owners.
1.2:
Business Structure
1. M/J 18/P22/Q1/a(i) Data Response - Online Travel (OT) - See Page 232 (a) (i) Define the term ‘private limited company’ (line 1). [2] Content A business where shares can be sold, but not to the general public. The owners benefit from limited liability. Accounts must be produced but not necessarily published. Knowledge Exemplar A private limited company has shareholders but does not sell on the stock exchange It has limited liability and but cannot sell shares to the public 2. M/J 18/P21/Q2(a)(ii) Data Response - Veg Cans (VC) - See Page 234 (a) (i) Briefly explain the term ‘public limited company’ (line 1) [3] Content A public limited company has shareholders who can purchase shares through the stock exchange. It also has limited liability, continuity and a separate legal identify. 3. M/J 18/P23/Q1/a(i) Data Response - Delivery To You (DTY) - See Page 235 (a) (i) Define the term ‘tertiary sector’ (line 1). [2] Content Made up of businesses which sell services to consumers. 4. Mar 18/P22/Q1(d) Data Response - Paul’s Clothes (PC) - See Page 236 (a) Evaluate Paul’s decision to set up PC as a sole trader. [11] Paul gets to make his own decisions –he has been through survival and now focusing on maximizing profits/sales. Gets to decide what he wants to do with the business e.g., opened up the second shop, investing in the new stock control system Paul keeps the profits to himself and he has been pleased with the level of profit made. Rewards for his investment/entrepreneurial skills. Unlimited liability = higher risk especially if economy slowing down and considering Paul’s market, cash flow slowing down and so if the business fails Paul is liable. Unlimited liability – heightened risk as Paul financed PC with mortgage on his home Loss of income for Paul as revenue expected to slow for at least the next 6 months. This will affect his livelihood and his standard of living. More susceptible to competition/changes in the economy. 5. Mar 18/P22/Q2(a)(ii) Data Response - Luxury Carpets (LC) - See Page 237 (a) (i) Briefly explain the term ‘public limited company’ (line 1). [3] Rationale Example or some other way of showing good understanding, such as: Limited liability Continuity Separate legal identity Corporation tax must be paid (not income tax Accounts need to be published Run by a Board of Directors Dividends may be paid Legal formalities (i.e. Articles, Memorandum etc.)
Business A-Level P-2 Topical
9 Read & Write Publications
Unit 1: Business and its Environmental
6. O/N 17/P22/Q1/d Data Response - Occasion Cards (OC) - See Page 223 (a) Evaluate the owners’ decision to change the legal structure of OC to a public limited company. [11] Answers could include: Benefits OC could access more capital which may allow OC to expand further and use more traditional marketing methods OC has started to see increased noncurrent liabilities – by increasing the equity this may be reversed Owners may become wealthy from selling their shares Drawbacks OC might lose the family atmosphere, reducing the workers motivation OC will need to publish their financial information if they become a plc which may give competitors an advantage Owners may lose their control of OC Owners will need to share profits 7. O/N 17/P22/Q2/a(ii) Data Response - Nearly New (NN) - See Page 224 Nearly New (NN) (a) (i) Briefly explain the term ‘sole trader’. [3] Exemplar Owned by one person who has unlimited liability and takes of the profit for themselves. A single owner with no shareholders and accounts do not need to be published. A sole trader has unlimited liability and no continuity. It is owned by one person. 8. O/N 17/P21/Q2/a(i) Data Response - Car Wash (CW) - See Page 225 (a) (i) Define the term ‘franchise’. (line 1). [2] Exemplar A business that pays a licence fee/royalties to use the logo and trading systems of an existing business 9. O/N 17/P23/Q1/a(i) Data Response - Jones Sticky Labels (JS) - See Page 226 (a) (i) Define the term ‘industrial market’. [2] A correct definition should cover both of the following: An explanation of market(s) – sales, trade etc.. An explanation of industrial – to another business, used in the production process, purchased to change or resale When a business sells (1) to another business (1) 10. M/J 17/P22/Q1/d Data Response - (Perfect Pizza (PP) - See Page 227 (a) Evaluate whether Paul should enter into a franchise agreement with PP. [11] Context/content: Advantages less risk to Paul as he benefits from the expertise and reputation of PP brand Assistance from PP so Paul makes less mistakes in his business decisions such as the policies for diversity and equality; Access to local marketing and the PP website will help generate sales; Disadvantages Up-front costs to purchase the franchise ($40 000); The royalty fee of 5% may be a drain on his cash flow Clash of ideas as Paul will have to follow the criteria set out in his franchise agreement – this may limit his freedom to make decisions.