Cambridge IGCSE™: Business Studies 0450/13
Cambridge IGCSE™: Business Studies 0450/13
Cambridge IGCSE™: Business Studies 0450/13
Published
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
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the specific content of the mark scheme or the generic level descriptors for the question
the specific skills defined in the mark scheme or in the generic level descriptors for the question
the standard of response required by a candidate as exemplified by the standardisation scripts.
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marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond
the scope of the syllabus and mark scheme, referring to your Team Leader as appropriate
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grade descriptors in mind.
a DO credit answers which are worded differently from the mark scheme if they clearly convey the same meaning (unless the mark
scheme requires a specific term)
b DO credit alternative answers/examples which are not written in the mark scheme if they are correct
c DO credit answers where candidates give more than one correct answer in one prompt/numbered/scaffolded space where extended
writing is required rather than list-type answers. For example, questions that require n reasons (e.g. State two reasons …).
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wrongly.)
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f DO NOT give further credit for what is effectively repetition of a correct point already credited unless the language itself is being tested.
This applies equally to ‘mirror statements’ (i.e. polluted/not polluted).
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unambiguous separation from other syllabus terms with which they may be confused (e.g. Corrasion/Corrosion).
4 Annotation:
For point marking, ticks can be used to indicate correct answers and crosses can be used to indicate wrong answers. There is no direct
relationship between ticks and marks. Ticks have no defined meaning for levels of response marking.
For levels of response marking, the level awarded should be annotated on the script.
Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners
who marked that paper.
BOD Benefit of doubt Used when the benefit of the doubt is given in order to reward a response.
TV Too vague Used when parts of the answer are considered to be too vague.
NAQ Not answered Used when the answer or parts of the answer are not answering the question asked.
question
K Knowledge Indicates knowledge and understanding of the concepts and issues relating to the question.
EVAL Evaluation Indicates where the answer has demonstrated evaluation (part (e) questions only).
OFR Own figure rule If a mistake is made in a calculation, and the incorrect figure that results from the mistake is used for
subsequent calculations.
SEEN Noted but no Indicates that content has been recognised but not rewarded.
credit given
Partial definition e.g. lots of customers / lots of sales / lots of buyers [1]
X: $60 000 or 60
Y: $80 000 or 80 or (80)
1(c) Outline two reasons why managing cash flow might be important 4 To use words from the stem as application, the
for TDG. reference must be appropriate (i.e. make
sense) in relation to the point being made.
Award 1 mark for identification of each relevant reason (max 2).
The following words are likely to be appropriate
Award 1 mark for each relevant reference to this business (max 2). for this question:
Bicycles/bikes
Points might include: Retailer
To be able to pay wages [k] to its 3 employees [app] ($10 000) closing balance / cashflow
Pay suppliers/trade payables [k] for the bikes [app] problem in September
Pay expenses/heating/rent/advertising [k] to avoid cash flow problem Customer loyalty
in September [app] Mass market
Repay (short-term) debts [k] of the retailer [app] 3 employees
Predict/plan/prevent cash flow problems [k] such as the $80 000 $80 000 (cash outflow in September) –
shortfall [app] OFR
Ensure business survival/continue [k] $40 000(cash inflow in September)
Cash available for emergency [k]
Other appropriate examples can be credited.
Other appropriate responses should also be credited.
Do not award:
Invest/expand
References to profit
Know how to improve on own [tv]
Support request for loan/finance
1(d) Explain two ways TDG could overcome its short-term cash-flow 6 To use words from the stem as application, the
problem in September. reference must be appropriate (i.e. make
sense) in relation to the point being made.
Award 1 mark for identification of each relevant way (max 2).
The following words are likely to be appropriate
Award 1 mark for each relevant reference to this business (max 2). for this question:
Bicycles / bikes
Award 1 mark for each relevant explanation (max 2). Retailer
–$10 000 (closing balance)
Points might include: Customer loyalty
Delay payments to suppliers [k] for its bicycles [app] keeping cash in Mass market
the business for longer [an] 3 employees
Ask/offer discounts so customers to pay quicker / insist on cash $80 000 (cash outflow – OFR will apply)
sales [k] so business receives cash sooner [an] but may not help $40 000
maintain customer loyalty [app]
Overdraft [k] allows the business to have a negative cash balance Other appropriate examples can be credited.
[an] to cover the – $10 000 [app]
Bank loan [k] to increase cash inflow [an] above $40 000 [app] Analysis must show impact on cash flow.
Delay/not purchase / buy cheaper equipment [k] which prevents cash
outflows [an] Do not award:
Sell (non-current) assets [k] generates cash inflows [an] Long-term solutions such as 'introduce
more capital / sell shares', retained profit
Other appropriate examples in context can be credited. Decrease price / advertise on own
References to raw materials / production
1(e) Explain two methods a retailer could use to maintain customer 6 This is a general question so there are no
loyalty. Which would be the best method to use? Justify your marks for application.
answer.
For evaluation to be awarded justification will
Award up to 2 marks for identification of relevant points. usually follow on from relevant analysis of
points.
Award up to 2 marks for relevant development of points.
Analysis can be awarded for:
Award up to 2 marks for justified decision as to which is the best method Explaining how method works
for a retailer to use to maintain customer loyalty. Negatives of each method
Award 2 marks for a full definition. Award 1 mark for a partial definition. Do not award:
Reasons why quality control is carried out.
Checking of goods at the end of the production process (whether it is the Vague comments such as ensuring quality is
production of the product or a service) [2] good / whether product good enough, meeting
OR customers expectation/standards.
Checking the standard of goods through inspection [2]
2(b) Identify two ways a pressure group might try to influence business 2 Only award the first two responses given.
decisions.
Do not award:
Award 1 mark per way (max 2). Change laws
Spread awareness on own – need how.
Points might include:
Create negative publicity / publish information about business / write
to newspaper
Organise customer boycotts
Organise demonstrations / protests / rally opposition
Lobby/petition / send letters to government
Demand interview with company
Take legal action
2(c) State four benefits to a business of increasing efficiency. 4 Only award the first two responses given.
Award 1 mark for each relevant benefit (max 4). Do not award:
Lower labour turnover/less absenteeism
Points might include: More revenue/sales/profit.
Reduce average/unit costs
Fewer mistakes/errors
Less waste
Fewer materials needed
Increase output
Quicker/faster production
Reduced inputs needed for the same level of output
2(d) Explain one external cost and one external benefit that may be 6 To use words from the stem as application, the
created by KCL’s business. reference must be appropriate (i.e. make
sense) in relation to the point being made.
Award 1 mark for identification of each relevant external cost/benefit
(max 2). The following words are likely to be appropriate
for this question:
Award 1 mark for each relevant reference to this business (max 2). Paper/newspapers/books
Wood (or other appropriate examples of
Award 1 mark for each relevant explanation (max 2). raw materials)
Factory
Points might include: Increase efficiency
(Raw materials from) local suppliers
External cost: Pressure groups
Pollution/smoke/fumes created [k] from making paper [app] could High level of inventory
damage health of people in the community [an]
Congestion [k] caused by deliveries to the factory [app] so longer to Other appropriate examples in context can still
move about / slow down deliveries to other businesses [an] be credited.
Use up natural resources [k] to obtain the wood [app] meaning fewer
resources available for other uses/future generations [an] Some points can be [k] or [an] but only award
Destruction/spoil landscape [k] reducing tourism [an] once.
2(e) Explain two factors a manufacturing business should consider 6 This is a general question so there are no
when deciding how much inventory to hold. Which factor is likely to marks for application.
be the most important? Justify your answer.
For evaluation to be awarded justification will
Award up to 2 marks for identification of relevant points. usually follow on from relevant analysis of
points.
Award up to 2 marks for relevant development of points.
Some points can be [k] or [an] but only award
Award up to 2 marks for justified decision as to which is the most once.
important factor for a manufacturing business to consider when deciding
how much inventory to hold. Watch for repetition e.g. high demand, low
demand so high/low inventory.
Points might include:
Whether product is perishable or not / shelf life [k] to reduce the
amount of wastage [an]
Level of demand / sales [k] as if high demand needs to hold high
inventory [an]
Seasons / celebrations/festivals/predictability of demand [k]
Storage space available [k] could increase storage costs [an]
Cost of holding inventory [k] as high levels could increase cash
outflows [an]
Method of production / level of output [k] as flow production may
require high levels of inventory [an]
Amount of finance available (to buy inventory) [k] as this could cause
cash flow problems / cannot afford to hold large amount [an]
Delivery / lead time / where products come from / reliability of
supplier [k] so production can continue / meet orders on time [an]
Award 2 marks for a full definition. Award 1 mark for a partial definition.
Partial definition e.g. whom you are responsible for [1] OR who reports to
one manager [1]
3(b) Identify two leadership styles. 2 Only award the first two responses.
3(c) Outline two benefits to PCY of encouraging its managers to use 4 To use words from the stem as application, the
delegation. reference must be appropriate (i.e. make
sense) in relation to the point being made.
Award 1 mark for each relevant benefit (max 2).
The following words are likely to be appropriate
Award 1 mark for each relevant reference to this business (max 2). for this question:
(4) offices
Points might include: 500 (employees)
Reduce managers’ workload / managers have time to focus on other Insurance (services)
(important) tasks [k] such as how the business is Business customers / farms / factories
organised/managed [app] Leadership style
Quality of managers’ work improves / managers likely to make fewer Being ethical
mistakes [k] in the 4 offices [app] Communication barriers
Increase employee motivation [k] of its 500 employees [app] Span of control
Builds trust / better working relationship between managers and Planning to change how business is
employees [k] which could influence its leadership style [app] managed / organised
Way to develop employee skills / increase employee flexibility /
employees may have better knowledge of issue [k] at the insurance Other appropriate examples can be credited.
business [app] To access [k] – must indicate who the point
refers to e.g. reduce workload of manager.
Other appropriate responses should also be credited. Communication barriers is [app] only.
Do not award:
Benefits to employees e.g. feel trusted.
3(d) Explain two possible reasons why being ethical is important to PCY. 6 To use words from the stem as application, the
reference must be appropriate (i.e. make
Award 1 mark for identification of each relevant reason (max 2). sense) in relation to the point being made.
Award 1 mark for each relevant reference to this business (max 2). The following words are likely to be appropriate
for this question:
Award 1 mark for each relevant explanation (max 2). 4 offices
500 employees
Points might include: Insurance (services)
Increased/retain sales / demand / customers [k] from farms / Business customers / farms / factories
factories [app] leading to higher revenue [an] Leadership style
Build / better reputation / brand image [k] leading to better customer Communication barriers
loyalty / sales / competitive advantage [an] for its insurance [app] Span of control
Help attract / motivate / retain employees [k] improving efficiency / Delegation
better quality of service / less labour turnover [an] from its 500
employees [an] Other appropriate examples can be credited.
Investors may be more likely / willing to invest [k] increasing the
amount of capital / funds [an] Some points can be [k] or [an] but only once
e.g. customer loyalty
Other appropriate responses should also be credited.
Do not award:
Comply with laws/less risk of legal as being
ethical is different to legal.
Examples of being unethical
Ways to be ethical.
3(e) Do you think lack of feedback is the main barrier to effective 6 This is a general question so there are no
communication in a business? Justify your answer. marks for application.
For evaluation to be awarded justification will
Award up to 2 marks for identification of relevant points. usually follow on from relevant analysis of
Award up to 2 marks for relevant development of points. points.
Award up to 2 marks for justified decision as to whether the lack of
feedback is the main barrier to effective communication in a business. Knowledge can be awarded for:
Problems caused by lack of feedback e.g.
Points might include: mistakes, lower efficiency
Identify other communication barriers.
Lack of feedback:
Do not know whether message has been understood [k] which could Analysis is for:
lead to errors / wrong actions taken [an] Development / impact of barrier on the
Do not know whether recipient has received [k] which can lead to business.
delays [an]
Points can be written as either advantages /
Other barriers could include: disadvantages of different barrier but only
Technical problems e.g. no signal/equipment breakdown [k] so award once e.g. not understood.
message cannot be sent / received [an]
Too much information sent in message [k] which can lead to Some points can be [k] or [an] but only award
mistakes / slow down decision-making [an] once e.g. Understood, mistakes
Jargon used / language [k] so receiver cannot understand [an] Lower quality is [an] only.
Noise / distractions [k] so not able to hear the message [an]
(Wrong) communication method used [k] so people are unable to Do not award:
access / read message [an] Reasons why communicate.
General issues of poor communication e.g. not
Message has to pass through too many levels / employees [k] so
know what to do / what doing.
message gets distorted / lost [an]
Focus on why feedback is important or
Send wrong message / send message to the wrong person [k] so the
problems of giving feedback e.g. demotivated.
actual message is never sent / received [an]
Problems with receiver or examples e.g. receiver may not listen [k]
4(a) Identify two ways a government might support business start-ups. 2 Only award the first two responses given.
4(b) Identify two ways a market can be segmented. 2 Only award the first two responses given.
4(c) Outline two characteristics Meena will need to become a successful 4 To use words from the stem as application, the
entrepreneur. reference must be appropriate (i.e. make
sense) in relation to the point being made.
Award 1 mark for each relevant characteristic (max 2).
Award 1 mark for each relevant reference to this business (max 2). The following words are likely to be appropriate
for this question:
Points might include: Handmade
Risk-taking [k] as leaving her job [app] Jewellery
Self-motivated / determination / resilience / perseverance [k] for her Leaving her job /teacher
start-up [app] Start-up/new business
Hard-working [k] especially if she decides to be a sole trader [app] Brother
Creative [k] as products will be handmade [app] Sole trader
Effective communicator [k] as may need to discuss matter with Partner
partner [app] Government support
Self-confident [k] Market research
Optimistic/positive [k] Market segment
Independent [k]
Innovator [k] Other appropriate examples can be credited.
4(d) Explain one advantage and one disadvantage to Meena of operating 6 To use words from the stem as application, the
as a sole trader rather than being in a partnership. reference must be appropriate (i.e. make
sense) in relation to the point being made.
Award 1 mark for identification of each relevant advantage/disadvantage
(max 2). The following words are likely to be appropriate
Award 1 mark for each relevant reference to this business (max 2). for this question:
Award 1 mark for each relevant explanation (max 2). Handmade
Jewellery
Points might include: Leaving her job /teacher
Entrepreneur
Advantages: Government support
Keep all the profit [k] from the new business [app] so she has an Market research
incentive to work harder / so she can decide how to invest it [an] Market segment
Can make all/quick decision-making [k] even if it's her brother [app] Brother
so may be more responsive to changes in demand [an] Business start-up / new business
Complete control / own boss [k] less chance for disagreement / no
need to consult anyone before making decisions [an] Other appropriate examples can be credited.
Has freedom to choose own holidays/work hours [k] to gain a better
work/life balance [an] Conflict/disagreements is [an] only.
Disadvantages: Do not award:
No one to share workload/responsibility/control with [k] so less time Features of unincorporated businesses
to specialise on certain activities [an] such as making jewellery [app] such as unlimited liability, no continuity.
Access to less finance / partner may provide extra finance [k] so as
need to borrow more/less money [an] or may need more government
support [app]
Fewer ideas/ less knowledge/experience [k] so less able to compete
[an]
No one to share any risks / potential loss / costs with [k]
4(e) Do you think accessing government sources, such as statistics, is 6 This is a general question so there are no
the best method of market research for a start-up business to use? marks for application.
Justify your answer.
For evaluation to be awarded justification will
Award up to 2 marks for identification of relevant points. Award up to 2 usually follow on from relevant analysis of
marks for relevant development of points. points.
Award up to 2 marks for justified decision as to whether accessing
government sources, such as statistics, is the best method of market Some points can be written as either
research for a start-up business to use. advantage/disadvantage of different methods
but only award once.
Points might include: For other methods, must identify it, and
Government sources: not simply describe it.
Free/cheap to collect [k] which can help keep fixed cost low [an] Out of date ONLY valid for govt. sources.
Readily available [k] so can make decisions more quickly [an]
Provides data on a range of topics/shows trends across whole Do not award:
country/market [k] so can make more informed decisions [an] General comparisons between primary
May be out-of-date [k] so information may not be relevant to what the and secondary market research e.g. up-to-
business needs to know now [an] date
Data may not be relevant /not specific to the business [k] leading to Reasons for carrying out market research
wrong decisions [an] e.g. find out demand/customer needs and
wants.
Other methods might include: Vague references to more/less accurate.
Reports from market research agencies [k] but will have to pay for
information [an]
Questionnaires/surveys [k] as large amounts of information can be
collected [an]
Focus groups [k] as can provide highly detailed responses [an]
Interviews [k] but time consuming to carry out [an]
Online survey [k]
Observation [k]
Government statistics are cheap to collect [k] which can help keep fixed
cost low [an]. Another option is questionnaires [k] which would allow the
business to collect large amounts of information [an]. However,
government statistics are better because a new business may not be
able to afford the cost of having the questionnaire designed properly
[eval] so it may be better to use government statistics are likely to be
accurate enough so can still prove helpful [eval].