Cambridge International AS & A Level
BUSINESS9609/02
Paper 2 Business Concepts 2 For examination from 2023
SPECIMEN PAPER 1 hour 30 minutes
You must answer on the enclosed answer booklet.
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You will need: Answer booklet (enclosed)
INSTRUCTIONS
● Answer all questions.
● Follow the instructions on the front cover of the answer booklet. If you need additional answer paper,
ask the invigilator for a continuation booklet.
INFORMATION
● The total mark for this paper is 60.
● The number of marks for each question or part question is shown in brackets [ ].
This document has 6 pages. Any blank pages are indicated.
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1 Barbecue House (BH)
BH is a fast food restaurant and takeaway business, which sells a range of burgers, kebabs,
pizzas and side orders. BH also has a delivery service to the local area.
BH is owned by Amir who mortgaged his home to finance the start-up of the business. Amir
operates BH as a sole trader. His son also works within the business as a chef. Amir has
been advised to change the legal structure of BH and to become a private limited company 5
to protect the business and himself.
BH is located on a busy high street. There are many other similar businesses on the high
street and in the surrounding area. Amir knows that the continued success of the business
requires him to identify a gap in the market and develop a unique selling point (USP). Amir
has carried out some market research (see Table 1.1 and Fig. 1.1). 10
Table 1.1: Market research data about competitors within 2 km of BH
Total number of competitors 8
Number of competitors who offer delivery services 4
Number of competitors who do not sell Asian food 6
Grosetto
5%
BH
Wok’s
20%
Papa Joe’s
10%
Pepe’s Mama Mia’s
10% 10%
Pizza House
5% TJ’s
Chao’s
5%
20%
Total market value = $600 000 15
Fig. 1.1: Market share data for competitors within 2 km of BH
The two market leaders are Wok’s and Chao’s. Both businesses specialise in Asian food
but neither has a delivery service. Amir would like to increase BH’s market share. He is
considering starting to sell Asian food. None of his employees have any experience cooking
or selling Asian food but Amir believes that the possible increase in income would be worth 20
any extra costs.
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(a) (i) Identify one benefit for a business of a unique selling point (USP). [1]
(ii) Explain the term ‘sole trader’ (line 4). [3]
(b) (i) Refer to Fig. 1.1. Calculate the value in dollars ($) of BH’s share of the market. [3]
(ii) Explain one reason why Amir carried out market research. [3]
(c)
Analyse one advantage and one disadvantage, to Amir, of BH becoming a private limited
company.[8]
(d)
Evaluate whether BH should sell Asian food. [12]
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2 Designer Clothing (DC)
DC is a medium sized private limited company. It has been trading for 10 years. DC makes
luxury dresses for women using job production methods. DC has an excellent reputation for
quality. A DC designer has a meeting with every customer to design a dress that satisfies
the customer’s individual needs, including choice of fabric and colour. Cost-based pricing is
used with 50% added to the average cost of each dress. 5
DC’s employees are highly skilled and paid hourly rates (a time based method). Ikram, one
of the designers, has just had a meeting with a new customer, Lydia. Lydia wants Ikram to
design and make a new dress for her. Ikram has worked out the production data shown in
Table 2.1 for the dress.
Table 2.1: Production data for the dress for Lydia 10
Production time 20 hours
Hourly rate $10
Material costs $250
Indirect cost allocation $25
Other costs such as packaging $25 15
Jenny, the Managing Director, wants to use DC’s excellent reputation and move into a new
market. Jenny wants to create a new range of DC branded trousers for women. Jenny has
developed some elements of a marketing mix for the new trousers:
• Product: quality trousers aimed at women aged 25–50
• Distribution channel: sold in large shops 20
• Promotion: branded with the DC logo
Jenny will develop a business plan when she receives the market research report, which
includes feedback from a focus group. Jenny thinks that the pricing strategy DC currently
uses will not be appropriate for the new trousers.
The new product range would use a batch production method. The Production Director, 25
Khaleal, has identified the machinery needed for the new production method. Khaleal is
worried about the problems that introducing the new production method might cause DC’s
employees.
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(a) (i) Identify one indirect cost. [1]
(ii) Explain the term ‘business plan’ (line 22). [3]
(b) (i) Refer to Table 2.1 and other information. Calculate the price of the dress for Lydia. [3]
(ii) Explain one payment method, other than time based, that DC could use to pay its
employees.[3]
(c)
Analyse two human resource problems that DC might experience from the introduction of a
new batch production method. [8]
(d)
Evaluate suitable pricing methods that DC could use for the new range of trousers. [12]
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