Business Paper 1 July 2023 with MS

Start date: -
Answer all questions.
The total marks for this paper is 50 marks. The marks for each question are shown as the
max points - use this as a guide as to how much time to spend on each question.
Answer all the questions based on the Pre-Seen Case Study on CATSO e retail. This
case study is available here as an external tool (look for one of the crossed pencil and ruler icon
on the top left of your screen). A hard copy of this will also be provided to you in the exam hall.
Show your workings in all questions that require calculations.
You may use the accompanying formula sheet. This formula sheet is available here as an
external tool (look for one of the crossed pencil and ruler icon on the top left of your screen). A
hard copy of this will also be provided to you in the exam hall.
Calculators are permitted. If you don't have your own calculator, there is also a calculator that
you can access here on DigiExam (look for one of the crossed pencil and ruler icon on the top
left of your screen).

Question 1
Max points: 1

Define labour productivity

Labour productivity measures the performance of employees in terms of output per

employee produced over a period of time. It is calculated as: output per period / number
of employees at work.
A01

Question 2
Max points: 2

Identify 2 financial and 2 non-financial rewards that CATSO could use to motivate employees.

Financial - profit share, bonus, share options, commission

Non-financial rewards - job enrichment, job enlargement, job rotation, team working
AO1 & AO3

Question 3
Max points: 2

Identify 2 "SMART" business objectives for 2023 for CATSO.

1. Increase sales by 5% in the European and US market by the 31.12.23.
2. Increase market share by 5% in UK by the 31.12.23.
3. To break-even by the end of 31.12.23.
4. To increase conversion rates by 5% by 31.12.23
Or any other "SMART" objective relevant to the business
AO1 & AO3

Question 4
Max points: 4

Explain the importance of operational objectives for CATSO.

Operational objectives are key to the CATSO business model. Key areas include:-
cost reduction which impacts profits,
improved quality which leads to increased customer satisfaction,
improved speed to market as fast fashion depends on getting the right products to
consumers as quickly as possible,
flexibility in changing production to meet changing consumer demand,
dependability - ensuring consistency which leads to increased customer satisfaction,
environmental - protecting the environment
AO1, AO2 & AO3

Question 5
Max points: 6

Analyse the benefits and drawbacks of CATSO as they move from a private limited company to a
public limited company.
Benefits
Access to capital
Ability to employ specialists who are experts in their functional area
Size & power
shares can be traded publicly

Drawbacks
More complex to set up & more legal requirements than private company
Open to public scrutiny
must publish annual financial reports
must organise an AGM
could be subject to hostile take-over
AO1, AO2, AO3
Level Mark Descriptor
0 0 A completely inaccurate response.
1 1–2 Isolated elements of knowledge and understanding–
recall based. Weak or no relevant application to
business examples. Generic assertions may be
presented.
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.
3 5-6 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).

Question 6
Max points: 10

Analyse the segmentation criteria that CATSO might use to define its target market for the new
ECOFASH range. How will this help them position the new range?
Segmentation criteria:
Geographic - short term: UK, USA, Europe as primary markets with ROW longer term
( as an on-line etailer geographic regions with good IT infrastructure
Demographic - age, income, gender (20 something age range, mid income level and gender
according to range
Psycho graphic - fashion conscious, eco friendly
Behaviour - occasions
Positioned - USP eco friendly, mid quality and mid priced
AO1, AO2, AO3
Level Mark Descriptor
0 0 A completely inaccurate response
1 1 – 3 Response shows imprecise knowledge and
understanding of relevant terms, concepts, theories
and models. There is very little knowledge of relevant
theory.
2 4 – 5 Response shows elements of knowledge and
understanding of relevant concepts & theories. Ideas
are applied and related to the economic problem(s)
in context, although does not focus on the broad
elements of the question. Contains a narrow
response or a two-stage chain of reasoning only.
3 6-7 Response shows accurate knowledge and
understanding of relevant concepts and theories.
Relevant ideas are applied and related directly to the
broad elements of the question with evidence
integrated into the answer.Where appropriate,
examples and diagrams are included and applied.
The analysis is clear and logical, although it may lack
balance.
4 8 - 10 Response shows precise knowledge and understanding
of relevant concepts, theories and models. Relevant
ideas are effectively applied and directly linked to the
broad elements of the question. Where appropriate,
examples and diagrams are included and applied
effectively. The analysis is relevant and focused
with evidence fully and reliably integrated. The
response shows logical and coherent chains of
reasoning.

Question 7
Max points: 10

Using the financial data and formula sheet, compare and analyse the financial position of CATSO in
2021 and 2022.
Financial measures
Gross profit
Net profit
ROCE
ROSF
Stock turnover
Debtor turnover
Creditor turnover
Gearing
Current ratio
Analysis of operating expenses and % of total operating costs
KPI analysis per region.

Level Mark Descriptor

0 0 A completely inaccurate response
1 1 – 3 Response shows imprecise knowledge and
understanding of relevant terms, concepts, theories
and models. There is very little knowledge of relevant
theory.
2 4 – 5 Response shows elements of knowledge and
understanding of relevant concepts & theories. Ideas
are applied and related to the economic problem(s)
in context, although does not focus on the broad
elements of the question. Contains a narrow
response or a two-stage chain of reasoning only.
3 6-7 Response shows accurate knowledge and
understanding of relevant concepts and theories.
Relevant ideas are applied and related directly to the
broad elements of the question with evidence
integrated into the answer.Where appropriate,
examples and diagrams are included and applied.
The analysis is clear and logical, although it may lack
balance.
4 8 - 10 Response shows precise knowledge and understanding
of relevant concepts, theories and models. Relevant
ideas are effectively applied and directly linked to the
broad elements of the question. Where appropriate,
examples and diagrams are included and applied
effectively. The analysis is relevant and focused
with evidence fully and reliably integrated. The
response shows logical and coherent chains of
reasoning.

Question 8
Max points: 15

Evaluate the internal and external impacts on CATSO and the impacts of these on the corporate
objectives going into 2023.
Using Ansoff's matrix, what recommendations would you make to help strengthen CATSO's position?
Internal impacts
Corporate objectives of growth , market share, increase in revenue streams, profitability.
operating capacity, IT, HR, marketing
External
PESTLE & Competition
difficult geo-political environment
supply chain issues
environmental pressures
competition
customer perception / acceptance of new brand & fast fashion generally
Recommendations
mergers & acquisitions to achieve growth goals
Partnership agreements / co-branding with fashion brands
new markets

Level Mark Descriptor

0 0 A completely inaccurate response
1 1 – 3 Response shows imprecise knowledge and
understanding of relevant terms, concepts, theories
and models.
2 4 – 5 Response shows elements of knowledge and
understanding of relevant concepts and theories.
Relevant ideas are applied and related to the
problem(s) in context, although does not focus
on the broad elements of the question. Contains a
narrow response or a two-stage chain of reasoning
only.
3 6-7 Response shows accurate knowledge and
understanding of relevant concepts and theories.
Relevant ideas are applied and related directly to
the broad elements of the question with evidence
integrated into the answer. The analysis is clear and
logical, although it may lack balance.
4 8-9 Response shows precise knowledge and understanding
of relevant concepts, theories and models. Relevant
ideas are effectively applied and directly linked to the
broad elements of the question. The analysis is relevant
and focused with evidence fully and reliably integrated.
The response shows logical and coherent chains of
reasoning.
Evaluation
Level Mark Descriptor
0 0 No evaluative comment
1 1 – 2 Response shows a generic evaluative comment
without supporting evidence to context.
Response shows no evidence of logical chain of
reasoning.
2 3 – 4 Response shows evidence of evaluation of alternative
approaches/methods which is unbalanced leading to
unsubstantiated judgements. Evaluative comment
provided, but with partially developed chain of
 reasoning
3 5–6 Response shows evidence of evaluation supported by
relevant reasoning and appropriate reference to
context. Evaluation is balanced and considers the
broad elements of the question, leading to a
substantiated judgement.