Mark Scheme (Results)

January 2021

Pearson Edexcel International Advanced Level

In Business (WBS13)
Unit 3: Business Decisions and Strategy
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January 2021
Publications Code WBS13_01_2101_MS
All the material in this publication is copyright
© Pearson Education Ltd 2021
General Marking Guidance

• All candidates must receive the same

treatment. Examiners must mark the first candidate in
exactly the same way as they mark the last.
• Mark schemes should be applied positively. Candidates
must be rewarded for what they have shown they can do
rather than penalised for omissions.
• Examiners should mark according to the mark scheme
not according to their perception of where the grade
boundaries may lie.
• There is no ceiling on achievement. All marks on the mark
scheme should be used appropriately.
• All the marks on the mark scheme are designed to be
awarded. Examiners should always award full marks if
deserved, i.e. if the answer matches the mark
scheme. Examiners should also be prepared to award
zero marks if the candidate’s response is not worthy of
credit according to the mark scheme.
• Where some judgement is required, mark schemes will
provide the principles by which marks will be awarded
and exemplification may be limited.
• When examiners are in doubt regarding the application
of the mark scheme to a candidate’s response, the team
leader must be consulted.
• Crossed out work should be marked UNLESS the
candidate has replaced it with an alternative response.
Question Answer Mark
Number
1(a) Knowledge 1, Application 2, Analysis 1

Knowledge
1 mark for identifying a benefit, e.g.
• Reduces the risk of a full-scale launch (1)

Application
Up to 2 marks for contextualised answers, e.g.
• The PLT is a new product and is being launched in a small
number of outlets in Canada (1)
• McDonald’s main menu is mainly meat based (1)

Analysis
1 mark for developing the reason, e.g.
• If the PLT fails in its test outlets then significant costs may
be saved by McDonald’s (1)
(4)
Question Answer Mark
Number
1(b) Knowledge 1, Application 2, Analysis 1

Quantitative skills assessed:

QS1: calculate, use and understand ratios, averages and fractions.

Knowledge
1 mark for knowledge of the formula to calculate mark-up:

Mark up = profit per item x 100 (1)

cost per item

Application
Up to 2 marks for correct application of figures to formula:

($9.99 – $3.64) (1) x 100

$3.64 (1)

OR

$6.35 (1) x 100

$3.64 (1)

Analysis
1 mark for showing correct answer:
174.45% (1)

NB: If no working is shown, award marks as follows:

• If the answer given is 174.45% award 4 marks

• If the answer given is 174.45 award 3 marks
(4)
Question Indicative content
Number
1(c) Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

• Physical resources refer to the operational factors concerned with

premises, equipment and other resources needed to meet customer needs
• The introduction of new plant-based products might require McDonald’s to
invest in new equipment to store the new PLT burgers
• Non-meat alternative products may need separate storage and cooking
facilities to keep them separate from meat products
• McDonald’s will have to develop supply chain relationships with Beyond
Meat/Impossible Foods to ensure a constant supply of products to the 28
restaurants trialling the new meat alternatives
• McDonald’s may need to ensure that it has enough physical resources to
cope with an increase in the number of products being offered on its menu
• However, this is not the first time McDonald’s has offered non-meat
alternatives and already has experience of this market
• McDonald’s offers a range of non-meat products in Germany, Sweden and
Finland, which indicates that the business already has physical resources in
place
• McDonald’s is a huge business that will have the financial resources to fund
any physical resources needed
Level Mark Descriptor
0 No rewardable material.
Level 1 1–2 Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–5 Accurate knowledge and understanding, applied accurately to the
business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced and
unlikely to show the significance of competing arguments.
Level 3 6–8 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or
qualitative information, and shows an awareness of competing
arguments/factors.
Question Indicative content
Number
1(d) Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

QS: QS2, QS8 and QS9

Knowledge, Application, Analysis, Evaluation – indicative content

• Extract C indicates that there are market opportunities for plant-based
products with a 29% increase since 2014 of plant-based burgers and
sandwiches in the US
• The overall number of adults wanting more non-meat fast food options is
36%
• This would seem to indicate that there is growing demand for plant-based
products and McDonald’s would therefore benefit from providing new plant-
based menu items to fulfil this customer need
• Adults aged 18-29 have the greatest demand for plant-based products and
this may benefit McDonald’s in terms of the target audience who generally
buy fast food
• There has been a growing concern both from health and environmental
reasons regarding the consumption of meat and many adults are opting for
non-meat products
• However, there are many threats to McDonald’s of entering this new market
of plant-based products
• Although there is rising demand for non-meat fast food products, only 9% of
the US classify themselves as vegetarian or vegan and this has remained
unchanged since 2012
• This seems to indicate that the majority of people in the US still prefer fast
food meat items and that McDonald’s should perhaps focus on developing
new meat products
• Extract B shows the cost of producing a non-meat burger is more expensive
than a meat burger, which could deter customers from purchasing plant-
based burgers
• The meat burger has a much higher mark-up of 276.73% compared to the
non-meat burger of 174.45%
• Extract A also indicates that rival fast food businesses such as Burger King
and KFC have already developed and launched their own non-meat products
into the market
• This may have given rivals first mover advantage over McDonald’s who are
only just trialling the PLT burger
• Overall, according to Ansoff’s matrix, product development is more risky
than market penetration but if McDonald’s can produce a non-meat product
that appeals to both vegetarian and meat eaters then this strategy will help
to widen its menu, which is currently very focused on meat products
Level Mark Descriptor
0 No rewardable material.
Level 1 1–2 Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–4 Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.
Level 3 5–8 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information though unlikely to show the significance of
competing arguments.
Level 4 9–12 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information and shows an awareness of
competing arguments/factors leading to a supported judgement.
Question Indicative content
Number
1(e) Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

• Critical path analysis identifies the precise sequence of activities that
need to be completed within a strict timeframe and shows the best way
to avoid any unnecessary delay
• McDonald’s can use CPA to schedule the redesign of drive-throughs to
help each stage to be completed in the shortest time possible
• CPA helps reduce the risk and costs of complex projects particularly
when new technology and rebuilding 8,000 drive-throughs will be
happening simultaneously
• It can help spot which activities have some slack/float and could
therefore transfer some resources to activities that are critical to the
overall completion time
• However, the quality of the critical path network will depend on the
accuracy of the data entered into the calculations
• When the project is new, such as introducing new artificial intelligence, it
might be difficult to make accurate predictions about how long each
activity will take
• Redesigning 8,000 drive-throughs might be very difficult particularly
when this is extended worldwide in 2020
• External factors such as the weather might impact on the timescale
needed to rebuild the drive-throughs, so extending the overall time
needed to complete the redesign in the US and worldwide
• It is a management tool and relies on the skills of the person
constructing the critical path network
• CPA is a management and decision-making tool that must be used in
conjunction with other decision-making tools to increase its
effectiveness
Level Mark Descriptor
0 No rewardable material.
Level 1 1–2 Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–4 Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.
Level 3 5–8 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information though unlikely to show the significance of
competing arguments.
Level 4 9–12 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information and shows an awareness of
competing arguments/factors leading to a supported judgement.
Question Indicative content
Number
2
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

QS: QS2, QS8 and QS9

Knowledge, Application, Analysis, Evaluation – indicative content

• Transformative leadership is a leadership style that aims to change the

way things are done within a business
• This is accomplished by setting an example at the executive level
through a strong sense of corporate culture, employee ownership and
independence in the workplace
• Dave Lewis could be argued to be the main reason for the
improvement at Tesco by changing the way it operated
• Dave Lewis made some drastic decisions and radically changed the
strategy of focusing on profits rather than sales
• He cut back non-core activities and updated own brand products and
in doing so has returned Tesco to profit within five years
• All of these actions could be considered to be transformative and his
leadership style had a direct impact on the profits at Tesco
• However, Extract F does show that during the period Dave Lewis was
CEO, UK retail sales were positive and increasing, particularly in 2015
• This might have accounted or contributed to the financial
improvement at Tesco rather than due to Dave’s transformative
leadership style
• At the same time, UK interest rates over the same period were at very
low levels, ranging from 0.5%-0.75%
• Low interest rates often encourage more spending as it is cheaper to
borrow money
• Low interest rates could also have contributed to an improvement in
the financial position of Tesco
• There are other key factors that can have an impact on the finances of
a business
• The organisational culture and size of the organisation will also have a
direct impact on change within a business
• It is clear that Dave Lewis has been successful in managing Tesco from
a loss to a profit but there are many factors that could have also had a
positive impact
Level Mark Descriptor
0 No rewardable material.
Level 1 1–4 Isolated elements of knowledge and understanding.
Weak or no relevant application of business examples.
An argument may be attempted, but will be generic and fail to connect
causes and/or consequences.
Level 2 5–8 Elements of knowledge and understanding, which are applied to the
business example.
Arguments and chains of reasoning are presented but connections
between causes and/or consequences are incomplete. Attempts to
address the question.
A comparison or judgement may be attempted but it will not
successfully show an awareness of the key features of business
behaviour or business situation.
Level 3 9–14 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Uses developed chains of reasoning, so that causes and/or
consequences are complete, showing an understanding of the
question.
Arguments are well developed.
Quantitative and/or qualitative information is introduced in an attempt
to support judgements, a partial awareness of the validity and/or
significance of competing arguments and may lead to a conclusion.
Level 4 15–20 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Uses well-developed and logical, coherent chains of reasoning,
showing a range of cause and/or effect(s).
Arguments are fully developed.
Quantitative and/or qualitative information is/are used well to support
judgements. A full awareness of the validity and significance of
competing arguments/factors, leading to balanced comparisons,
judgements and an effective conclusion that proposes a solution
and/or recommendations.
Question Indicative content
Number
3 Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.
QS: QS2, QS8 and QS9

Knowledge, Application, Analysis, Evaluation – indicative content

• Employee ownership is when interest in a company is held by the
company's workforce.
• Richer Sounds now has 60% of the business owned by the employee
ownership trust
• Employee ownership can create incentives in the form of employee
motivation and productivity because the employees benefit financially
from their own efforts and have a stake in the business
• This may result in an increase in employee productivity as the employees
own the majority of the business and can benefit from a share of the
profits
• Due to this, owning shares in Richer Sounds might improve company
performance, result in greater levels of loyalty, engagement and individual
performance, thereby improving overall productivity and retention
• Extract G shows that in 2018 profit per employee was £19 690
demonstrating how important each employee is to Richer Sounds
• By owning shares in the company, this figure may improve as there might
be a direct impact on sales and profitability that the employees benefit
from
• By owning a share of the business, employees at Richer Sounds might be
more inclined to increase their productivity and aim to sell more electrical
equipment to improve this return on investment
• However, if the share price decreases this can have a negative impact on
the value of the shareholding for an employee and therefore reduces the
incentive to work harder and increase productivity
• ROCE over the time period has declined to 33.6% in 2018 from 52.1% in
2016
• The earning per share has decreased in 2018 compared to 2017 and this
might reduce labour productivity at Richer Sounds if employees are not
receiving a high enough financial reward for their efforts
• By owning 60% of the shares, employees at Richer Sounds will have greater
participation in decision making and might have more power than Julian
Richer
• Extract G indicates that most of the employees at Richer Sounds have
worked for the business for many years with 39 employees working for
over 20 years indicating that Richer Sounds does not have a problem with
 labour turnover/employee retention and that employees are already
happy
• There are other ways to improve productivity and retention such as
empowerment strategies and consultation, which might be more effective
and do not require ownership to be given to employees
• A combination of financial and non-financial human resource strategies
might be the best way to improve overall productivity as employees are
often motivated by different things
Level Mark Descriptor
0 No rewardable material.
Level 1 1–4 Isolated elements of knowledge and understanding.
Weak or no relevant application of business examples.
An argument may be attempted, but will be generic and fail to connect
causes and/or consequences.
Level 2 5–8 Elements of knowledge and understanding, which are applied to the
business example.
Arguments and chains of reasoning are presented but connections
between causes and/or consequences are incomplete. Attempts to
address the question.
A comparison or judgement may be attempted but it will not
successfully show an awareness of the key features of business
behaviour or business situation.
Level 3 9–14 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Uses developed chains of reasoning, so that causes and/or
consequences are complete, showing an understanding of the
question.
Arguments are well developed.
Quantitative and/or qualitative information is introduced in an attempt
to support judgements, a partial awareness of the validity and/or
significance of competing arguments and may lead to a conclusion.
Level 4 15–20 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Uses well-developed and logical, coherent chains of reasoning,
showing a range of cause and/or effect(s).
Arguments are fully developed.
Quantitative and/or qualitative information is/are used well to support
judgements. A full awareness of the validity and significance of
competing arguments/factors, leading to balanced comparisons,
judgements and an effective conclusion that proposes a solution
and/or recommendations.
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