Pearson Edexcel GCE A Level In Business (9BS0) Business Advanced Paper 2: Business Activities, Decisions and Strategy. Question Paper and Mark Scheme

Document Content and Description Below

Read the following extracts (A to C) before answering Question 1 Write your answers in the spaces provided Extract A Tended Ltd Tended Ltd is a fast-growing technology start-up company based in Li... ncoln, UK founded by young entrepreneur Leo Scott Smith, who is the main shareholder The company has created a personal safety device called the ‘Tended Protect’ Tended Ltd aims to increase its market share of the global wearable technology market Tended Protect is a wrist-worn wearable safety device that monitors the movements of the user through artificial intelligence and has the ability to learn and detect ‘abnormalities’, such as a fall or strong impact If the user does not or cannot respond to the device’s safety check, then an alert will be sent to the user’s nominated emergency contact It gives the GPS location, health and activity information and will open the channel for live audio with the wearer Tended Ltd has gained £50 000 from Enterprise Loans*, to help further develop the Tended Protect, create new jobs and marketing for the new product, as well as fulfil its initial orders *A subsidiary of the UK government’s British Business Bank (Source: adapted from http://wwwsmewebcom/2018/07/09/ qa-leo-scott-founder-ceo-tended-protect/ and https://cityxcouk/2018/07/tended-wearablesafety-device-developed-lincolnshire/) Extract B The expansion of Tended Ltd Tended Ltd has developed at a fast rate, from one member of staff to a team of 10 in eight months It encountered difficulties such as raising finance and it ran out of cash on a few occasions Tended Ltd also faced development issues, which took months to fix However, it overcame all of these issues The staff pulled together as a team, worked into the early hours of the morning and constantly innovated and took risks, enabling the business to stay agile and continue to grow rapidly (Source: adapted from https://wwwstartupvalleynews/uk/ tended-personal-safety-wearables/) 5 10 15 5 Extract C The global technology wearables market Volume CCS CCS Insight Global wearables forecast, 2019–2020 insight Fitness, activity and sports trackers 2019 123 million $140 billion 61 15 33 17 63 38 22 410 million $342 billion 2020 102 60 114 145 Value Device sales in 2020 Eyewear 97 million Hearables 9 million Wearable cameras 24 million Watches 110 million Wristbands 164 million Tokens, clip-ons and jewellery 4 million Other 2 million Wearable cameras Virtual and augmented reality headsets Smartwatches and smartphone companions February 2019 info@ccsinsightcom 14 96 25 187 23 CCS Insight, a market research business, has updated its forecast on the future of wearable technology, indicating that 411 million smart wearable devices, worth a staggering $34 billion, will be sold in 2020 CCS Insight claims the industry will achieve sales of $14 billion in 2019, with wrist-based devices, such as smartwatches and fitness trackers, continuing to dominate Its forecast states half of all wearable technology sales over the next 12 months will be from these devices, with smartwatches making up 50% Ben Wood, Chief of Research at CCS Insight, commented: “Given the falling consumer interest for smartphones, it is little wonder so many companies are chasing the rapidly growing opportunity presented by this dynamic market” (Source: adapted from https://wwwforbescom/sites/paullamkin/2016/02/17/ wearable-tech-market-to-be-worth-34-billion-by-2020/#192e2d113cb5) 5 10 1 (a) Explain one financial reason why Leo Scott Smith decided to establish Tended Ltd as a private limited company (4) Tended Ltd has constructed the decision tree below to help it decide whether to develop a new smartwatch or launch a new marketing campaign New smartwatch £13 million (£500 000) Success Success (£360 000) Marketing campaign 06 Failure Failure 04 08 £5 million £1 million £3 million (£50 000) 02 * The net gain for the new smartwatch is £13 million (b) Using the data in the decision tree, calculate the net gain for the marketing campaign State your answer to two decimal places You are advised to show your working (4) 8 *P61845RA0828* (c) Assess the likely value of a business plan to Tended Ltd (10) (d) Assess the extent to which the problems of rapid growth may have been managed by Tended Ltd To achieve its aim of increasing its market share of the global wearable technology market, Tended Ltd could produce a new smartwatch or launch a marketing campaign for ‘Tended Protect’ (e) Evaluate these two options and recommend which one is most suitable for Tended Ltd to achieve its aim of increasing its market share SECTION B Read the following extracts (D to G) before answering Question 2 Write your answers in the spaces provided Extract D Sports Direct rescues House of Fraser for £90 million Sports Direct, the British sportswear retailer controlled by Mike Ashley, has bought House of Fraser for £90 million Billionaire Ashley said his ambition was to transform House of Fraser “into the Harrods of the High Street”, a reference to the luxury department store in London “This is a massive step forward and further enhances our strategy,” he added Ashley’s stated desire is to make Sports Direct the “Selfridges of Sport”, matching the status of the department store on London’s Oxford Street Buying significant shareholdings in other businesses forms part of Ashley’s strategy Investments have been made in retailers such as Debenhams and French Connection, however this strategy has not always been successful Last month Sports Direct reported a loss of £85 million resulting from its investment in Debenhams (Source: adapted from https://ukreuterscom/article/uk-house-of-fraser-administration/ sports-direct-rescues-house-of-fraser-for-90-million-pounds-idUKKBN1KV0IL) Extract E Extract from Sports Direct plc* Annual Report 2018 £million Revenue 3 3595 Cost of sales 2 0244 Selling, distribution and administrative expenses 1 1561 *Sports Direct plc includes House of Fraser (Source: adapted from http://wwwsportsdirectplccom/~/media/Files/S/ Sports-Direct/annual-report/annual-report-2018pdf) 5 Extract F UK retail trends Online purchases now account for almost 20% of retail sales, growing at 10 times the rate of physical store sales in the first half of 2018 During this period, 4,400 stores closed across the UK high street, up from 103 in 2017 Years of rising costs, technological disruption and changing consumer behaviour have forced the UK high street to undergo considerable structural change There will be fewer shops in the future but this does not mean the store is dead, it just means that the role of the store is changing There are numerous examples of innovation happening within stores, such as cashless supermarkets and retailers investing in better customer service (Source: adapted from https://www2deloittecom/uk/en/pages/ consumer-business/articles/retail-trendshtml) Extract G Sports Direct’s corporate culture Over the past two years investigations by the Guardian newspaper and the BBC found that working conditions at Sports Direct’s Shirebrook warehouse in Derbyshire were similar to a ‘modern-day Victorian workhouse’ Allegations of workers being paid below the minimum wage, fearing their bosses, experiencing security checks, and workers feeling forced to attend work despite being ill were all uncovered The Unite union reported that: “People are scared because they are working under a system where they know they could lose their employment at any moment” Employees were deducted 15 minutes’ pay if they were one minute late for their shift, and lost their jobs altogether if they fell foul of the firm’s ‘six strikes’ system – with one strike including anything from spending too long in the toilet to taking a day off sick Sports Direct admitted it had made some mistakes and was reviewing its Human Resource strategies (Source: adapted from https://wwwmanagersorguk/insights/news/2016/ june/5-things-we-learned-about-management-at-sports-direct) 5 10 5 10 2 (a) Explain one benefit Sports Direct could gain from conducting a SWOT analysis (4) 18 *P61845RA01828* (b) Using the information in Extract E, calculate the operating profit margin for Sports Direct in 2018 State your answer to two decimal places You are advised to show your working (c) Assess the usefulness of a sales forecast for Sports Direct (d) Assess the likely consequences for Sports Direct of its corporate culture Sports Direct aims to reduce the labour turnover of its workforce To achieve this, it could introduce an employee share ownership scheme or implement an empowerment strategy (e) Evaluate these two options and recommend which one is most suitable for Sports Direct to achieve its aim of reducing labour turnover (20) [Show More]

Last updated: 1 year ago

Preview 1 out of 50 pages