Mark Scheme (Results)

October 2022

Pearson Edexcel International Advanced Level

In Business (WBS13) Paper 01
Unit 3: Business decisions and strategy
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October 2022
Question Paper Log Number P72157A
Publications Code WBS13_01_2210_MS
All the material in this publication is copyright
© Pearson Education Ltd 2022
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 Using Extract D, calculate the gearing ratio for Pets at Home in Mark
March 2021. You are advised to show your working.
Answer
1(a) Knowledge 1, Application 2, Analysis 1

Quantitative skills assessed:

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

Knowledge
1 mark for knowledge and understanding of how to calculate
gearing ratio:

Non-current liabilities x 100 (1)

Capital employed

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

£433.7m (1) x 100

£433.7m + £993.7m (1)

OR
£433.7m (1) x 100
£1 427.4m (1)

Analysis
1 mark for showing correct answer:
30.38% (1)

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

• If the answer given is 30.38% award 4 marks

• If the answer given is 30.38 award 3 marks
(4)
Question Using the data in Extract E, calculate the three year moving average Mark
for the percentage of UK households who owned a pet in 2020. You
are advised to show your working.
Answer
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 and understanding of how to calculate 3 year
moving average:

3 year moving average = 3 year total (1)

3

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

(40% + 41% + 60%) = 141% (1)

3 3 (1)

Analysis
1 mark for showing correct answer:
47% (1)

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

• If the answer given is 47% award 4 marks

• If the answer given is 47 award 3 marks
(4)
Question Discuss the possible limitations of quantitative sales forecasting for
future sales at Pets at Home.
Indicative content
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.

QS8: Use and interpret quantitative and non-quantitative information in order

to make decisions

Knowledge, Application, Analysis, Evaluation – indicative content

• Quantitative sales forecasting techniques such as time-series analysis
involves making future predictions based on trends identified from past
data
• Extrapolation of past data to future sales forecasts can often be difficult
and has limitations due to the dynamic nature of the pet care market
• The increase in pet ownership in the UK in 2020/21 in Extract E does not
mean this will continue in the future and the forecast of the pet care
market growing to £7bn in Extract A may not occur
• For example, external factors might have been the main contributor to
the demand for new pets, rather than long term changes making
forecasting techniques inaccurate
• Demand for pet care products might be dependent on a wide range of
other factors such as the state of the UK economic environment and
social trends
• This demonstrates that there are many external factors that might affect
the accuracy of quantitative sales forecasting techniques
• However, numerical data such as time-series analysis is easy to interpret
and analyse for example graphs can be made and correlations identified
• Pets at Home can look at its revenues for the past three years to spot
seasonal patterns for pet accessories
• Fluctuations in data can then be smoothed out to be able to identify
trends in products such as for pet accessories
• Data can be objectively interpreted and bias is often not an issue in
comparison to qualitative techniques
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 Using Extracts A and B, assess how Pets at Home could use portfolio analysis
when deciding which products and services to sell.
Indicative content
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.

QS8: Use and interpret quantitative and non-quantitative information in order

to make decisions
QS9: Interpret, apply and analyse information in written, graphical and
numerical forms

Knowledge, Application, Analysis, Evaluation – indicative content

• Portfolio analysis involves a business considering each of its products in
the context of its market position
• By analysing its product portfolio, Pets at Home can make strategic
decisions about which of its pet products need support, which are
generating the most revenue and which need to be discontinued
• For example, Extract A states that pet accessories are set to grow and
exceed £0.9bn by 2021-2022
• Extract B shows that Pets at Home has a 45% share of the UK market for
pet accessories and it has seen a 15% increase in revenue from this
product
• This suggests that pet accessories could be considered to be a cash cow
for Pets at Home
• Knowing this, Pets at Home could use the revenue generated from pet
accessories to support its other product areas or expand its locations in
the UK
• The revenue for pet grooming has declined between 2020-2021 and Pets
at Home have a small market share, which could indicate that this is a
dog product according to the Boston Matrix
• Pets at Home could therefore divest this area of the business or look to
see if this area of the business could be improved over time
• Therefore, portfolio analysis can help Pets at Home focus its resources
into the most successful pet care products and services
• However, portfolio analysis is often considered to be too simplistic with
market share and market growth classified as either low or high when in
fact businesses can be somewhere in the middle
• High market share does not always lead to high profits because often
there are high costs also involved with high market share
• For example, Pets at Home might have to invest heavily in advertising,
R&D and product development to maintain its 45% market share of the
pet accessory market reducing profitability
• Portfolio analysis is only a snapshot of the current position at Pets at
Home and does not take into account external factors such as the
product life cycle of different pet care products
• Portfolio analysis should be used in conjunction with other strategic tools
such as SWOT or Ansoff’s Matrix to help with the strategic direction of
Pets at Home
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 Assess the benefits of succession planning for Pets at Home.
Indicative content
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.

QS9: Interpret, apply and analyse information in written, graphical and

numerical forms

Knowledge, Application, Analysis, Evaluation – indicative content

• Succession planning is a process for identifying and developing new
leaders, from existing employees who can replace existing leaders
when they leave, retire or die
• In 2021 Pets at Home made succession planning a priority for the
business
• It is important for Pets at Home to carry out succession planning
because it can help it maintain its brand identity
• This is because identifying and preparing an internal successor, Pets at
Home might be able to be led by someone who shares its values and
understands the company’s brand, its customers and its employees
because they are familiar with the Pets at Home culture
• Often leaders developed from within a business tend to be more
successful than those brought in because they have benefited from in-
house leadership programmes
• In the face of skills shortages, succession planning could be a quicker
way to replace senior positions at Pets at Home without the need for
expensive external recruitment
• However, succession planning relies on there being a suitable
candidate in the first place at Pets at Home
• An internal employee might already be familiar with the culture of Pets
at Home but this does not guarantee that there will be smooth
transition or that the business will not face any risks
• There are other factors which might be more important than
succession planning for Pets at Home
• Spending time on areas such as strategic decision making might be
currently more important for Pets at Home to maintain its position in
the pet care market
• There are a number of important areas that the Board at Pets at Home
should consider and succession planning might be more relevant
when senior managers on the Board are nearing retirement
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 Evaluate the benefits of a task culture for a business such as Zappos.com.
Indicative content
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.

Knowledge, Application, Analysis, Evaluation – indicative content

• Company culture types can be classified as power, role, task and

person. A task culture is when a business allows teams to focus on a
particular task within the broad remit of the overall aim of the
business
• Zappos.com has implemented a system called Holacracy to help to
try and combat the increase in bureaucracy
• This allows all employees to identify areas of opportunity and to
propose solutions without them having to be approved by a
manager or chain of managers above them
• Therefore, individual employees have a large degree of control over
their work
• This type of culture could therefore result in high levels of motivation
for employees working at Zappos.com as they have the responsibility
to pursue their ideas
• By allowing employees to voice their views in meetings, Zappos.com
might be able to deliver its customer service promise and improve its
relationships with its suppliers, retailers and investors
• Adopting a task culture often works well in dynamic markets such as
online retailing as teams can be assigned to meet new challenges or
solve problems when they occur
• This task culture is further supported by Zappos.com view that work
should be fun which is very different to many business cultures
• However, control using a task culture can often be difficult to
manage in a large organisation such as Zappos.com
• Zappos.com senior managers may exert little day-to-day control over
methods of working or procedures, without damaging the norms of
the culture established by the Holacracy system
• Overall control will still need to be retained by senior Zappos.com
managers when allocating projects, people and resources
• Allowing employees to make decisions without having to pass up the
hierarchy relies on individual employees at Zappos.com having the
necessary skills and expertise to make those important decisions
• Employees may not have these, so this necessitates the introduction
of rules and procedures, the use of position or the control of
resources by managers to get the work done
• Task culture has a tendency to change to a role or power culture
when resources are limited or when the whole organisation is
unsuccessful
• This could result in frustration on the part of the employee if
decisions are overruled by senior managers at Zappos.com
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 Evaluate the benefits of being ethical for a business such as Volvo Cars.
Indicative content
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.

QS9: Interpret, apply and analyse information in written, graphical and

numerical forms

Knowledge, Application, Analysis, Evaluation – indicative content

• Business ethics involve moral principles that determine how business

decisions are made and may include providing good working conditions,
fair pay and assessment of environmental impacts
• Volvo Cars adopts ethical practices such as using technology to trace the
cobalt used in its electric batteries
• It works with a not-for-profit organisation in DRC to ensure mine
workers are fully protected which helps to support Volvo Cars’ promise
of safety not only to drivers but to miners and the environment
• This could result in more customers purchasing an electric vehicle from
Volvo Cars rather than another car manufacturer that does not have the
same ethical standards
• Volvo Cars may gain a competitive advantage by following an ethical
policy which can enhance reputation and desirability in the eyes of the
consumer
• There has been a significant increase in the number of consumers who
are concerned with environmental and ethical issues
• The average amount spent on ethical products in the UK has increased
from £202 in 1999 to £1278 in 2018
• In particular the amount spent on ethical transport has increased from
£10 to £214 in this period
• This demonstrates that it is of great strategic benefit to Volvo Cars to
adopt ethical behaviours to gain market share in a very competitive
industry
• Often consumers are willing to pay more for sustainable products or for
products that can have their supply chain traced
• This could result in higher profit margins for Volvo Cars from being
ethical
• However, often being ethical or having ethical supply chains can result in
a negative trade-off between ethical behaviour and profitability
• Tracing cobalt and ensuring raw materials are from legal sources might
result in higher costs of production for Volvo Cars which may negatively
affect profitability in the short-term
• If higher costs translate into higher prices for electric vehicles then its
competitiveness and sales may suffer
• Many consumers may not care about environmental claims and may be
more concerned with the final selling price an electric vehicle
• Much depends on the additional costs involved in the implementation of
their values and checking of the supply chains
• In the short-term it may be costly to ensure these standards are being
kept but in the longer-term, Volvo Cars may see its sales increase
• The overall impact may depend upon how socially and ethically aware its
core customers are
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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