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Cambridge International AS & A Level: Business 9609/32 May/June 2021

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Cambridge International AS & A Level

BUSINESS 9609/32
Paper 3 Case Study May/June 2021
MARK SCHEME
Maximum Mark: 100

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2021 series for most Cambridge
IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level components.

This document consists of 24 printed pages.

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Generic Marking Principles

These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

• 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.

GENERIC MARKING PRINCIPLE 2:

Marks awarded are always whole marks (not half marks, or other fractions).

GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

• 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
• marks are awarded when candidates clearly demonstrate what they know and can do
• marks are not deducted for errors
• marks are not deducted for omissions
• answers should only be judged on the quality of spelling, punctuation and grammar when these
features are specifically assessed by the question as indicated by the mark scheme. The
meaning, however, should be unambiguous.

GENERIC MARKING PRINCIPLE 4:

Rules must be applied consistently, e.g. in situations where candidates have not followed
instructions or in the application of generic level descriptors.

GENERIC MARKING PRINCIPLE 5:

Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).

GENERIC MARKING PRINCIPLE 6:

Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.

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Social Science-Specific Marking Principles


(for point-based marking)

1 Components using point-based marking:


• Point marking is often used to reward knowledge, understanding and application of skills. We
give credit where the candidate’s answer shows relevant knowledge, understanding and
application of skills in answering the question. We do not give credit where the answer shows
confusion.

From this it follows that we:

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 …).
d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required.
(Check for evidence it is understood and not used wrongly.)
e DO NOT credit answers which are obviously self-contradicting or trying to cover all
possibilities
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).
g DO NOT require spellings to be correct, unless this is part of the test. However spellings of
syllabus terms must allow for clear and unambiguous separation from other syllabus terms
with which they may be confused (e.g. Corrasion/Corrosion)

2 Presentation of mark scheme:


• Slashes (/) or the word ‘or’ separate alternative ways of making the same point.
• Semi colons (;) bullet points (•) or figures in brackets (1) separate different points.
• Content in the answer column in brackets is for examiner information/context to clarify the
marking but is not required to earn the mark (except Accounting syllabuses where they
indicate negative numbers).

3 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each
step, the correct answer(s) and the mark for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the
question paper and in the mark scheme. In all other instances, the correct answer to a
calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award
equivalent marks for reaching equivalent stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working,
the ‘own figure rule’ applies: full marks will be given if a correct and complete method is
used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

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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.

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PREPARATION FOR MARKING

1 Make sure that you have completed the relevant training and have access to the RM Assessor
Guide.
2 Make sure that you have read and understand the question paper, which you can download from
https://support.rm.com/ca
3 Log in to RM Assessor then mark and submit the required number of practice and standardisation
scripts. You will need to mark the standardisation scripts to the required accuracy in order to be
approved for marking live scripts. You may be asked to re-mark them, or to mark a second
sample, if you do not meet the required accuracy on your first attempt.

MARKING PROCESS

1 Mark strictly to the FINAL mark scheme, applying the criteria consistently and the general
marking principles outlined on the previous page.
2 If you are in doubt about applying the mark scheme, consult your Team Leader.
3 Mark at a steady rate through the marking period. Do not rush, and do not leave too much until
the end. If you anticipate a problem in meeting the deadline, contact your Team Leader
immediately and the Examiners’ Helpdesk.
4 Examiners will prepare a brief report on the performance of candidates to send to their Team
Leader via email by the end of the marking period. The Examiner should note strengths seen in
answers and common errors or weaknesses. Constructive comments on the question paper,
mark scheme or procedures are also appreciated.

MARKING SPECIFICS

Crossed out work

1 All of a candidate’s answers, crossed out or not, optional or not, must be marked.
2 The only response not to be marked is one that has been crossed out and replaced by another
response for that exact same question.
3 Consequently, if a candidate has crossed out their response to an optional question and gone on
to answer a different optional question then both attempts must be marked. The higher mark will
be awarded by the system according to the rubric.

0 (zero) marks or NR (no response)

1 Award NR if there is nothing at all written in answer to that question (often the case for optional
questions).
2 Award NR if there is a comment which is not an attempt at the question (e.g. ‘can’t do it’ or ‘don’t
know’.)
3 Award NR if there is a symbol which is not an attempt at the question, such as a dash or question
mark.
4 Award 0 (zero) if there is any attempt at the question which does not score marks. This includes
copying the question onto an Answer Booklet.

Annotation
1 Every question must have at least one annotation e.g. <NAQ> if it is an NR and <X> or <seen> if
0 marks are awarded.
2 Every page of a script must have at least one annotation e.g. <BP> for a blank page.

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Paper 3 Specific Marking Guidance

• When examiners are in doubt regarding the application of the mark scheme to a candidate’s
response, the team leader must be consulted.
• Handwriting and use of English language are not to be assessed.
• A response consisting of a list should be assessed. It is unlikely that such a response will score
highly in the levels in each Assessment Objective.
• If a response does not fit in the space provided it should be assessed as if it did whether it is
shorted, or longer and a continuation sheet is used.
• The main RM Assessor annotations to be used are K (Knowledge), APP (Application), AN
(Analysis), EVAL (Evaluation).
• For each of these four annotations, the number of marks awarded must match the number of
times that annotation is on the response.
• Only award EVAL if the candidate has also demonstrated APP.
• Application marks are not awarded for repeating material from the case study. Application is
achieved by answering in the context of the case or by using the information in the case to help
answer the question.
• In Section B, candidates answer either Question 6 or Question 7. The Section B question that the
candidate does not answer must be entered as ‘no response’.

This mark scheme includes a summary of appropriate content for answering each question. It
should be emphasised, however, that this material is for illustrative purposes and is not
intended to provide a definitive guide to acceptable answers. It is quite possible that among
the scripts there will be some candidate answers that are not covered directly by the content
of this mark scheme. In such cases, professional judgement should be exercised in assessing
the merits of the answer and the senior examiners should be consulted if further guidance is
required.

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Question Answer Marks

1 Analyse the impact on Inolla of two changes in the economic 10


environment in country Q.

Level Knowledge Application Analysis


3 marks 2 marks 5 marks

2 3 marks 2 marks 4–5 marks


Knowledge of Two points Good use of theory
two changes in applied and/or reasoned
economic argument to explain
environment and impact of one or two
impact. changes in the economic
environment.

1 1–2 marks 1 mark 1–3 marks


Knowledge of One point Some use of theory
one change in applied and/or reasoned
economic argument to explain
environment and impact of one or two
/ or impact. changes in the economic
environment.

Knowledge
• Economic environment includes consideration of:
- Economic growth by changes in real GDP
- Inflation; a sustained increase in the average price level
- The unemployment rate; measures the percentage of the labour
market without work
- Interest rates; the cost of borrowing, monetary policy
- The exchange rate; measures the value of a currency against
another currency
• Impact includes consideration of costs, revenue, profit, decisions taken
in response to changes.

Application
• Unemployment is low (has decreased to 3.8%) and will impact
recruitment of labour. This could be linked to the higher labour turnover
Inolla is experiencing.
• Economic growth is forecast to be 5% next three years. Incomes rising,
link to premium product of Inolla.
• An increase in interest rates (due to threat of inflation) may impact
investment decisions as cost of borrowing is higher. This could be
linked to strategic decisions and investment in ERP.
• Cost of importing components and batteries from country P may be
affected by the rising value of the currency.
• Pricing of exports affected by appreciation.
• These changes can impact strategic plan to enter the shared
micromobility market: exports to other countries

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Question Answer Marks

1 Analysis
• Recruiting workers will be more difficult due to low unemployment. May
force Inolla to offer wages above the minimum wage to prevent high
labour turnover and to attract employees as output expands
• Expansion plans require financing. With an increase in interest rates it
will be less attractive to borrow money as costs will be higher reducing
the return on investment.
• Economic growth should lead to an increase in demand for electric
scooters as Inolla uses premium pricing. Increased demand will lead to
higher revenue and potentially higher profits.
• Appreciation will reduce cost of batteries from country P and thus
reduce costs allowing a higher profit margin. Cheaper for Inolla to
import components.
• Appreciation will make it more expensive for importers to purchase
scooters from Inolla and therefore reduce export sales.

ARA

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Question Answer Marks

2(a)(i) Refer to Table 1. Calculate for 2020: 3

labour turnover

(Number of employees leaving / average number of employees) × 100 (1)

2020 labour turnover = 12 / 40 × 100 (2)

30% OR 30 (3)

Other answers

2019 labour turnover = 20% OR 20 (2)

2(a)(ii) labour productivity 3

Labour productivity = Annual output / Employees (1 mark if no relevant


calculation)

Annual output = 6000 × 12 = 72 000 (1)

2020 labour productivity = 72  000 / 40 (2)

= 1800 (3)

Alternatively:

Monthly labour productivity = 6000/ 40 (1)

= 150 (2)

150 × 12 = 1800 (3)

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2(b) You may refer to your answer to 2(a) and other information. Assess the 12
effectiveness of Inolla’s approach to human resource management
(HRM).

Level Knowledge Application Analysis Evaluation


2 marks 2 marks 4 marks 4 marks

2 2 marks 2 marks 3–4 marks 3–4 marks


Two relevant Two points Good use of Good
points which applied theory and/or judgement
includes reasoned shown, e.g.
knowledge of argument to well
impact of analyse supported
Inolla’s approach conclusion
approach
and/or
approaches
to HRM

1 1 mark 1 mark 1–2 marks 1–2 marks


Knowledge of One point Some use of Some
role of HRM applied theory and/or judgement
or reasoned shown, e.g.
approaches argument to one factor
to HRM or analyse very
impact of approach important
Inolla’s
approach

Knowledge
• Identification of role of HRM and objectives (1 mark max)
- Recruitment & selection
- Appraisal of employees
- Workforce planning
- Training
• Distinction between hard and soft HRM
- Hard - treating employees as a cost, autocratic leadership.
- Soft – focus on training and development, democratic style of
leadership, empowerment.
• Knowledge of Taylor, Mayo and Herzberg et al and approaches to
managing human resources.
• Knowledge of measuring effectiveness such as absenteeism rates and
labour turnover.

Application
Use of results to 2(a) / case study information. (OFR applies)
• Productivity has decreased by 200 scooters per employee.
• Labour turnover has increased from 20% to 30%
• Lack of flexibility in shift patterns.
• Weekly production targets given.
• No union allowed to negotiate on behalf of employees.
• Absenteeism has increased. Total days lost in 2020 is 320.
• Link to use of quality control inspectors and the battery fires.
• Training in one specific skill

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2(b) Analysis
Hard approach to managing employees may negatively impact Inolla:
• Alienate some employees and this may explain why labour turnover has
increased.
• Increased labour turnover may disrupt production, and this could be
why productivity has fallen.
• New employees take time to recruit and train and therefore this reduces
productivity and increases unit costs.
• Failure to recognise union could cause conflict with employees resulting
in disruption to production. This could affect customer satisfaction and
therefore sales could decrease.
• Unions could be used to drive productivity agreements and thus reduce
costs.
• Unions could provide a means of communicating effectively with
employees and this helps achieve objectives such as increasing
productivity.
• More extensive training could make employees more flexible and
therefore Inolla could be more responsive to customer demands.
• Empowering employees may increase motivation and help assure
quality, improving Inolla’s brand reputation and increasing sales.
• Training in one specific skill may impact flexibility of workforce

Benefits of hard HRM may include:


• Controls costs by only paying minimum wage which increases Inolla’s
competitiveness.
• Recognising trade union could drive up costs making the electric
scooters more expensive or reducing profit margins.
• Minimises training costs leaving more cash available for alternative
uses such as marketing.
• Some employees will respond positively to being given direct orders
and supervision increasing
• Better control of employees as more closely supervised.
• Decisions may be made more quickly making Inolla more responsive to
changes

Evaluation
• Elements that the evaluation/judgement might depend on:
- Given the economic situation employees can easily find other
employment so this would suggest that Inolla should take a softer
approach to human resource.
- Premium prices require a product that meets quality standards. Will
a hard approach ensure this cost effectively as quality inspectors
required and employees not given responsibility?
- Extent to which hard approach reduces costs and importance of
controlling costs to competitiveness.
• Other factors that might have contributed to the declining workforce
performance. Is Li-chun correct in terms of cause and effect?
- Is it Neten that is the problem rather than the hard approach
- Is labour turnover due to economic growth providing more
opportunities for workers.
ARA

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3 Evaluate whether Inolla will need to change its marketing strategy to 16


increase sales to businesses that rent out scooters in the shared
micromobility market.

Level Knowledge Application Analysis Evaluation


2 marks 2 marks 6 marks 6 marks

2 2 marks 2 marks 4–6 marks 4–6 marks


Two relevant Two points Good use of Good
points applied theory and/or judgement
reasoned shown
argument to
explain need
for a change
to marketing
strategy

1 1 mark 1 mark 1–3 marks 1–3 marks


One relevant One point Some use of Some
point applied theory and/or judgement
reasoned shown
argument to
explain need
for a change
to marketing
strategy

Knowledge
• Marketing strategy includes marketing objectives, budget and a
coordinated marketing mix. (max 1 mark for identifying elements)
• Understanding of different techniques within the marketing mix such as
different forms of promotion and pricing
• Difference between B2B (a business selling to other businesses) and
B2C (a business selling to consumers)
• Market research to understand the market

Application
• Selling to shared micromobility businesses is B2B.
• Scooters will need to be more durable for the B2B market than for
selling direct to consumers.
• Businesses will purchase in high volumes and price will be important.
• Some businesses produce their own scooters.
• Competition is likely to be significant – larger firms with economies of
scale exist. Comment on existing approach – viral marketing, social
media and advertising buses and trains, premium prices less likely to
appeal to business customers.
• Product changes might include offering servicing (maintenance)of
scooters.

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3 Analysis
Chains of reasoning highlighting likely elements of marketing strategy:
• Price more important and clear pricing strategy required that is
competitive and identifies not only the upfront cost but also costs of
servicing if required.
• Promotion more likely to include trade shows, email marketing, trade
(industry) press, website, production of brochures for potential
customers.
• Salespeople may be important for building trust and motivating
companies to buy.
• B2B marketers must persuade decision makers of a company therefore
information must be concise and clear.

Evaluation
• Identification of most important element of marketing strategy and
justification.
- Need for servicing of scooters?
- Businesses less likely to be influenced by persuasive advertising.
More interested in information.
- Need for market research prior to the marketing strategy as this is a
new market.
- Need to continue with existing marketing strategy as higher
demand from consumers will increase pressure on business
customers to purchase from Inolla.
- The extent to which the strategy needs to change. Some elements
may be retained others changed.
• Marketing budget may be constrained by the cash outflows associated
with increasing output if extension or new factory is built.

ARA

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4(a)(i) Refer to lines 71-74 and Table 2. Calculate the: 4

accounting rate of return (ARR)

Rationale Content Marks

Correct answer with or without 27.5% OR 28% 4


units.
Working not required 55% OR 56%
Alternative formula

Correct working without ARR = 275 000 / 1 000 000 × 3


answer 100
OR
Annual profit (units not 1.65 m / 6 = 0.275 m OR
necessary) 0.28 m
OR OFR based on error in OR 275 000
ARR calculation:
- original investment not 0.442 / 1 × 100 = 44.2% OR
deducted 0.442 / 0.5 × 100 = 88.4%

- profit not divided by 6 1.65 / 1.0 × 100 = 165% OR


1.65 / 0.5 × 100 = 330%

Profit 2.65 m – 1.0 m = 1.65 m 2


OR OFR for annual profit
- original investment not 2.65 m / 6 = 0.442 m
deducted
OR OFR based on error in 2.65 / 1.0 × 100 = 265% OR
ARR calculation: 2.65 / 0.5 × 100 = 530%
- original investment not
deducted and not divided
by 6

Total cash inflows 2.65 m 1


OR Correct formula (annual profit / capital cost) ×
100
OR
(annual profit / average
investment) × 100

No creditable content 0

OFR

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4(a)(ii) payback 4

300 000 / 450 000 × 12 (2)

= 8 months (3)

Payback = 2 years 8 months (4) or 2.67 years (4) or 2.7 years (4)
2 years 232 – 248 days (4)

2.8 (3)

Year Cash flow Cumulative cash flow

0 (1 000 000) (1 000 000)

1 300 (700 000)

2 400 (300 000)

3 450 150 000

4 500 650 000

5 500 1 150 000

6 500 1 650 000

1 mark for
Accurate cumulative cash flow for first year or more.
OR
Payback is in the 3rd year.

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4(b) You may refer to your results to 4(a) and other information. 12
Recommend whether Inolla should invest in enterprise resource
planning (ERP). Justify your recommendation.

Level Knowledge Application Analysis Evaluation


2 marks 2 marks 4 marks 4 marks

2 2 marks 2 marks 3–4 marks 3–4 marks


Two relevant Two points Good use of Good
points made applied theory and/or judgement
reasoned shown e.g.
argument well
supported
conclusion

1 1 mark 1 mark 1–2 marks 1–2 marks


Knowledge One point Some use of Some
shown of applied theory and/or judgement
ERP or factor reasoned shown
in decision argument

OFR

Knowledge
• Definition of ERP: the use of a computer application to plan the
purchase and use of resources in an organisation to improve efficiency.
Part of supply chain management.
• Benefits of ERP
- Helps with inventory control
- Reduces costs of operations
- Links information between departments
- Choosing best suppliers and most cost-effective suppliers and
supporting JIT manufacturing
- Allocating jobs to appropriate production employees
• Other factors in decision
- Cost
- Availability of finance
- Impact on employees
- ARR and Payback results

Application
• Weakness of Inolla is low inventory turnover.
• High cost of holding inventory of batteries etc
• Payback within 3 years. Relatively quick as the ERP system has a 6
year life.
• ARR is high at 27.5%
• NPV data $1.141m

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4(b) Analysis
• ERP will support introduction of JIT which will reduce costs of
stockholding.
• May enable increase to capacity as less inventory will be held. This will
facilitate meeting increasing demand for scooters.
• ERP is costly and high gearing of Inolla increases risk of further
borrowing. This may result in cash flow problems for Inolla if increased
savings take time to be realised.
• Employee training to deal with computer systems will be a cost (but
should be included in the net cost savings data).
• ERP provides more effective sharing of information between
departments which can lead to a more integrated approach to achieving
Inolla’s objectives.
• Introducing ERP may cause disruption to production in the short-term
reducing output whilst it is installed.

Evaluation
• Cost savings are estimates made by the ERP specialist. Can these
figures be trusted as specialist will wish to sell to Inolla?
• If ERP used to reduce inventory holding and costs, then success
depends in part on the reliability of battery suppliers in country P to
deliver on time.
• Other factors to consider e.g.
- NPV or IRR as this considers time value of money.
- Depends on availability of finance linked to high gearing and likely
increase in interest rates.
- How long will it take to implement the ERP system?
- Resistance to change from employees.
- Will specialist IT employees be required and how expensive is
that?
• There are other ways to increase efficiency such as Quality Circles and
Kaizen

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5 Evaluate whether Inolla should subcontract production of electric 16


scooters to solve the problem of insufficient capacity.

Level Knowledge Application Analysis Evaluation


2 marks 2 marks 6 marks 6 marks

2 2 marks 2 marks 4–6 marks 4–6 marks


Good use of Good
Two relevant Two points theory and/or judgement
points applied reasoned shown
argument

1 1 mark 1 mark 1–3 marks 1–3 marks


Some use of Some
One relevant One point theory and/or judgement
point applied reasoned shown
argument

Knowledge
• Definition of subcontracting: contracting a second business to fulfil part
or all of the output / function / service.
• Definition of capacity / capacity constraint / capacity utilisation

Understanding of possible factors to consider:


• Flexibility of using a subcontractor.
• Issues relating to control of quality when using a subcontractor.
• Short term cost savings compared to expansion.

Knowledge of other ways of increasing production such as:


• Increasing productivity of employees through training
• Extending existing factory
• Building a new factory

Application
Use of case information:
• Avoids cost of building a factory extension or going public.
• High gearing of Inolla.
• 400% increase in demand.
• Subcontractor in country P with sufficient capacity.
• Subcontractor has a good reputation for quality and already supplies a
competitor.
• Subcontractor had recent negative publicity for poor working conditions
in the factory.
• Use of ERP to increase capacity.

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5 Analysis
• Subcontracting can be flexible as Inolla can increase/decrease orders
according to demand.
• Loss of control over quality could result in reputation damage if scooters
do not meet quality standards thus reducing sales
• Subcontractor may benefit from economies of scale and therefore have
lower prices thus enabling Inolla to make greater profit
• Subcontractor has to make a profit. This could result in a higher price
per unit to Inolla.
• Subcontracting will be quicker than building a factory in country P
enabling Inolla to increase output and meet customer demands in a
shorter time frame.
• Factory would retain more control over output and quality which is
important to their brand image.
• Factory would require conversion to plc and this would reduce the
control that Li-chun has over the business.

Evaluation
• Subcontracting would reduce risk as there is no guarantee that their
move into the shared micromobility market will be successful.
• Attitude of Li-chun to taking Inolla public. Risk to her control of the
business and possibility of a hostile takeover.
• Depends on the terms of the contract as to how flexible subcontracting
is to Inolla.
• How important is the negative publicity regarding the poor working
conditions with the subcontractor. Price may be more important to
business customers.
• Significance of the subcontractor supplying their competitor.
• Reliability of the subcontractor
• If subcontractor has sufficient capacity to meet Inolla’s order does this
suggest that the business has a problem? Inolla may be able to achieve
a lower contract price.
• Factory may be cheaper in the long term
• Most important factor with justification

ARA

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Questions 6 and 7 use this marking grid:

Level Knowledge 3 Application Analysis Evaluation


marks 3 marks 4 marks 10 marks

3 7–10 marks
Good judgement shown throughout with
well supported conclusion/
recommendation, focused on the
business in the case

2 3 marks 3 marks 3–4 marks 4–6 marks


Good Good Good use of Some judgement shown in the main body
understanding application reasoned of the answer and an attempt to support
shown to the case argument or conclusion/ recommendation, focused on
use of the business in the case
theory to OR
explain effective and well supported conclusion/
points made recommendation, focused on the
business in the case

1 1–2 marks 1–2 marks 1–2 marks 1–3 marks


Some Some Limited use Limited attempt to show judgement either
understanding application of reasoned within the answer
shown to the case argument or OR
use of a weakly supported conclusion/
theory to recommendation with some focus on the
support business in the case
points made

0 No creditable content

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9609/32 Cambridge International AS & A Level – Mark Scheme May/June 2021
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6 Evaluate the usefulness of strategic analysis techniques in identifying 20


future growth strategies for Inolla.

Knowledge
• Definition: the process of conducting research into the business
environment within which an organisation operates, and into the
organisation itself, to help form future strategies.
• Explanation of strategic analysis and its techniques – SWOT, PEST,
Boston Matrix, Porter’s 5 Forces, core competencies.
• Place of strategic techniques in strategic management
• Identification of weaknesses / strengths of the techniques
• Need to understand the external environment – requiring a detailed
PEST analysis

Application
Application requires more than repeating the information from Tables 3 and
4. Candidates must actively use the information in developing their answer.
• SWOT was completed in 2018 – 3 years ago. It is out of date.
• Use of information from Table 3 linked to future growth.
• Use of information from Table 4 linked to future growth.
- Information covers the shared micromobility market
• Accuracy of 2018 SWOT in relation to current situation e.g. issue of
quality control and battery fires
• Link between SA and introduction of ERP
• Core competencies – design

Analysis
• Analysis of how changes identified might guide strategic decisions
- Focus on strengths will reduce risk to the business
- Identification of weaknesses that need to be addressed when
making decisions or alternatives sought e.g. financing
- Anticipating changes to the external environment will enable Inolla
to take decisions to reduce risk and take advantage of opportunities
• SA will help reduce the risk of decisions taken by Inolla as it will help
Inolla build on their core competencies and strengths and highlight
weaknesses that need to be resolved.
• SA takes time to do in terms of management focus, reducing time
available for other tasks.
• Boston Matrix as part of product portfolio analysis could help identify
cash cows and dogs. This information can be useful in ensuring that
Inolla maintains a balanced product portfolio and identify products for
divestment.
• Porter’s Five Forces: Power of buyers, suppliers, threat of substitutes,
barriers to entry and competitive rivalry helps Inolla make decisions
about markets to enter and reduces risk by considering factors that
affect success.

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9609/32 Cambridge International AS & A Level – Mark Scheme May/June 2021
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6 Evaluation
Clear judgements as to the importance of strategic analysis and/or
techniques including:
• Importance of understanding where the business is now in order to
generate ideas and/or support for expansion.
• Judgement/evaluation about usefulness of strategic analysis techniques
supported by argument.
• Elements that the evaluation/judgement might depend on such as:
- Strategic analysis needs to be reviewed regularly. It appears that
Inolla has been slow to use the analysis originally completed
- Inolla operates in a dynamic environment so analysis may quickly
become outdated.
- Subjective nature of SWOT analysis.
- An assessment of the importance of timing and a timescale in
carrying out analysis.
- Subjective interpretation of the models – one manager’s opinion of
SWOT may be very different to another’s.
- Critical comments on the techniques.
• Evaluation of other factors that influence options such as:
- Comments that strategic analysis on its own is not enough to fully
support a decision.
- Attitude of directors
- Attitude to risk
• Justification of most useful technique(s) with supporting argument.
- Ranking the usefulness of the techniques in relation to expansion
plans.
- Weighing up importance of other stages in strategic management
especially objectives and choice techniques in relation to strategic
analysis.

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9609/32 Cambridge International AS & A Level – Mark Scheme May/June 2021
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7 Evaluate the significance of corporate planning in reducing risk as 20


Inolla continues to grow.

Knowledge
• Business Plan: A written document that describes a business, its
objectives and its strategies, the market it is in and its financial
forecasts.
• Corporate Plan: This is a methodical plan containing details of the
organisation’s central objectives and the strategies to be followed to
achieve them.
• A business / corporate plan:
- Gives direction to the business. The plan provides Inolla directors
with a clear focus for what the company should be trying to achieve
in the medium term.
- Helps motivate staff. It provides a sense of purpose.
- Enables planning at different levels of the business and ensures all
staff are working towards the same goals.
- Acts as a means for control and review. Actual outcomes can be
compared with the objectives set and the performance of Inolla can
be assessed.
- Helps ensure that resources are used effectively and that all
departments are working together.
• The planning process itself is useful. It encourages directors and
managers to consider the current situation of the firm and to set
objectives accordingly.
• Corporate plans will include techniques of strategic analysis such as
SWOT and Porter’s Five Forces
• How dynamic markets may undermine plans
• Potential link between profitability and having clear business plans
• Provides clear focus to senior managers.
• Enables control and review process.
• Of interest to potential investors and staff.
• Corporate plan provides clear objectives to then use in setting
objectives at departmental and individual level through MBO

Application
• Li-chun’s research into solutions to problems faced in commuting before
setting up Inolla as part of business planning to identify a gap in the
market.
• Market research into shared micromobility market as part of business
planning
• Operations close to capacity; planning necessary for subcontracting or
expansion.
• Lack of a contingency plan for the battery fires?
• Planning for introducing ERP
• Evidence of some strategic analysis as part of planning process in
choosing growth strategies – SWOT 2018 and Porter’s Five Forces
analysis.
• Cost to Inolla of commissioning the Porter’s Five Forces analysis
• Need for a plan if Inolla goes public to generate investor interest.
• Business planning and the competitive nature of the micromobility
market
• Need for planning including marketing strategy for entry into
micromobiliity market.

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9609/32 Cambridge International AS & A Level – Mark Scheme May/June 2021
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7 Analysis
• Contingency planning could have helped minimise the damage to Inolla
of battery fires.
• Planning necessary to deal with the problem of insufficient capacity.
This needs to be done in advance to meet the increasing demand for
Inolla’s scooters and avoid negative publicity / dissatisfied customers.
• Planning helps reduce risk by anticipating changes in the market and
preparing the business for the future. Without a plan Inolla will lack
direction and objectives to target.
• Planning helps control expenditure and therefore reduces risk of
cashflow problems.
• Strategic decisions affect all parts of the organisation, so planning is
important to coordinate activities.
• Planning is time-consuming and can be expensive, the more detail the
greater the time and cost.
• SWOT analysis / Porter’s Five Forces and links to effective decision-
making regarding expansion. Analysis will reduce risk to Inolla in its
decision making and thus help to ensure profitability.

Evaluation
• The business environment is dynamic and there can be unexpected
internal and external events. Thus, business planning cannot eliminate
risk only reduce it.
• Contingency planning necessary to deal with the unexpected but can be
expensive.
• Reliability of information – how much is spent on market research/data
gathering and how relevant is it? Interpretation of information used in
planning can be influenced by skills and training of leadership.
• Monitoring and review essential to ensure costs are not increasing in
this rapidly changing market.

© UCLES 2021 Page 24 of 24

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